Family businesses in the UAE are strong according to corporate governance standards, as most of these companies witness the passage of the first generation (the founders) and the second generation (the children), which are crucial life stages for these companies.

 Some UAE companies are still under the control of the founders, while the second generation is taking over.

  Awareness of governance standards for family businesses in the UAE is significantly higher compared to family businesses in the entire Gulf region. Many of these Emirati companies have resorted to applying advanced governance standards, such as transparency, smooth management transition, financial monitoring and auditing, with the aim of avoiding problems that may arise due to generational change.

  Studies in this context indicate that family businesses may overcome the challenges related to the transition to the fourth generation, as the percentage of companies that reach this level is only 5% of the total family companies in the region.

  Governance systems are characterized by the separation of the company from the family, leaving the company as an independent entity free from family conflicts and inheritance issues, which are often common in the third and fourth generations. Separating ownership from management leads to the stability of the company and avoids the problems resulting from these issues. The UAE is one of the leading countries in adopting governance standards, given its prominent role as a global financial center, as the country has taken important steps in this direction since 2006.

The role of the CEO in the family business:

The CEO reports directly to the Board of Directors, although they have two separate roles. The role of the Board of Directors is considered to be oversight of business results without interfering in operational tasks, mechanisms, steps and procedures.

The duties of the Executive Director are:

  • Presenting the company’s work plan and annual budget to the Board of Directors for approval and approval.

  • Transforming the company’s strategic objectives, which were set by the Board of Directors, into operational objectives, and communicating with the executive departments (marketing, human resources, financial management, etc.) in setting operational mechanisms without the Board of Directors interfering in the method of implementation.

• Signing checks issued by the Financial Department to other beneficiaries.

  • Motivating executives and proposing their rewards.

  • Follow up on the company’s marketing and promotional programs.

  • Review and approve employee performance reports.

  • Approving the company’s various expenses.

  Family company registration:

After obtaining initial approvals, the investor is required to pay registration fees and license fees. Fees depend on the type of license required.

Documents required for registration:

1. Application for registration with all data.

  2. The Board of Directors’ decision to appoint a director of the company/management member (officially authenticated by a notary and authenticated).

  3. A legal agency through which the director/management member is authorized (officially authenticated by a notary and authenticated).

  4. The company’s articles of incorporation and articles of association (officially authenticated by a notary and authenticated).

  5. Director/management member signature form (officially notarized and authenticated by a notary).

  6. A personal photo of the director/management member with a white background.

  7. Information about the contributed capital.