MIDDLE EAST FAMILY CONGLOMERATE
DUE TO THE RECENT AND RAPID CHANGE IN ECONOMIC CLIMATE ACROSS THE GCC, A FAMILY CONGLOMERATE IN THE REGION RECOGNISES THE NEED TO RESTRUCTURE ITS GOVERNANCE.
The recent drop in oil prices has impacted the top line revenues of a large Family Conglomerate in the GCC. The drop-in revenue has been further exasperated by the Group’s historical operational inefficiencies and the arrival of international competition, due to the recent drop in both legal and cultural barriers to entry. The Family now realises that a “do nothing” approach will only degrade the situation further.
Governance Creed has supported the Family in developing a clear objective, concise road map and a restructuring approach to the Group’s Governance requirements so as to survive the new market pressures. The Road Map has highlighted the core businesses for retention and strengthening and has identified all loss leaders for swift closure. The creation of a Family Holding Structure (so as to resolve inheritance challenges) and a Family Holding Board (so as to develop investment strategies and oversee performance) have help resolve most Family Governance questions. The creation of industry and sector specific Boards of Directors, staffed with industry experienced, independent and professional Board Members has led to the development of new strategies for the Groups business sectors. The recruitment of non-family and industry experienced Chief Executives to each of the major business sectors has allowed clear KPIs to be established.
The buy-in of all Family members to the restructuring approach and a clear road map forward has allowed the alignment of individual Family members and a common objective and approach to be adopted. The implementation of the new experienced Boards has led to the development of new Strategies. Other benefits are ongoing or in development at this time.