• According to a KPMG survey, 82% of working women believe that communicating and interacting with female leaders will help them develop their career path
• 25% of female employees in Saudi Arabia consider the presence of inspiring female leadership models important to motivate them to advance
Family businesses make up more than 90% of the private sector in the Gulf region, but given that only 5% of them continue to be profitable when they reach the third generation of the family, one of the most important priorities for families, business and the economy as a whole is to understand the causes of this phenomenon. From this standpoint, Saudi Vision 2030, which seeks to improve women's contribution to the country's economy, focuses on enabling family businesses to formulate effective strategies for career advancement, supporting women in their career advancement, and improving economic flexibility.
The changing role of women in family businesses
Family businesses have always been by nature an inclusive environment that offers women opportunities for growth and advancement and enables them to balance their family responsibilities and fulfill their role in the workplace.
With the goals and legislation set by the government to support women, women's participation in the workplace has increased dramatically in the past few years in Saudi Arabia. However, many women still face obstacles in performing their leadership roles, including the lack of available opportunities, societal expectations, the inability to obtain care for their children, low salaries and compensation, and the lack of sufficient successful models of inspiring women in leadership positions.
In general, women all over the world are expected to be able to balance the responsibility of taking care of their children and managing the home on the one hand, and fulfilling their job responsibilities in the workplace on the other hand, which poses a huge challenge and a major obstacle to their progress. One of the possible solutions to this problem, which is already being explored by many companies in the region at present, is to provide flexibility in working for women and allow them to work remotely or even reduce working hours, and 38% of working women in Saudi Arabia reported that this solution was pivotal in enabling them to work progress in their work.
Similarly, childcare initiatives have played a major role in helping women enter the workforce, as research conducted by Harvard University in 2018 reported that 65% of women were unable to find jobs because they focused primarily on caring for their families or were unable to find jobs. affordable care for their children. Therefore, government initiatives had a very important role in solving the problem of providing care, especially the Qurrah program, which is a development fund that provides assistance to cover the costs of childcare and thus enable Saudi women to achieve job stability.
Societal expectations have always severely affected women's ability to work, keeping many young women out of the labor market to prevent family members from working for them. However, over the past ten years, women no longer needed approval to work in various fields such as retail, which opened up broad career prospects for them and encouraged them to pursue their ambitions.
The importance of highlighting successful models of inspiring female leaders in family businesses
One of the most important components of career ambition is having successful role models who inspire the next generation of women in family businesses and encourage them to take on leadership positions. 25% of women indicated that they have successful leadership models that inspire their ambition to succeed and advance in their careers. Mentoring, mentoring, and communication are essential drivers for success, but unfortunately, they are not available to all women in the world to the same extent. A study conducted by KPMG in 2019 on women in leadership positions also found that 67% of women acquire knowledge and information in the field of leadership from other women, and 82% of women believe that benefiting from the experiences of others may support their career advancement. And with the entry of more women into the work sector, there is an urgent need to support distinguished women who have the potential to succeed in order to become inspiring mentors to others.
Kholoud Mousa, a partner at KPMG in Saudi Arabia, and the first Saudi female partner in one of the four major companies in the country, commented: “With more women assuming leadership positions in family businesses, we will get used to seeing women in high positions, and this trend will extend to non-companies.” family and allows other women to assume leadership positions.
Proactive, forward-thinking family businesses lead the way in embracing a culture of diversity and inclusion in which male leaders support female co-workers with nurturing. Leading family businesses, such as the privately owned Nesma Saudi Company with a strong multi-sector portfolio, consider diversity an essential part of their corporate governance framework and benefit from the implications and outcomes of this approach. Noura Al-Turki, Vice President of Nesma, says in this regard: “Integrating diversity into the framework of corporate governance leads to achieving independence, and diversity in thought, opinion and expertise across the entire board of directors improves business results, and we in our company are now embarking on this exciting journey and reaping its wonderful fruits and results.” ».
Sustainability and succession planning
The presence of an element of diversity in the family business, which is usually passed on to the eldest son, helps in succession planning based on competence and merit. With the current strong focus in private sector companies on improving long-term sustainability, companies need to seize this unique opportunity and support and engage their talented female employees in leading the sustainability efforts of their companies. Data from Ernst & Young and Kennesaw State University suggest that preparing more women for leadership positions will lead to higher growth outcomes and help achieve long-term sustainability.
Companies benefit from having a diverse and inclusive work environment in it in many ways, from increasing profitability to stimulating innovation and achieving long-term success. The advancement of women in the Saudi workforce will have a significant impact on business performance, as it improves the long-term results of family businesses, the economy and society as a whole.
At the present time, we are witnessing appreciable government efforts that pave the way to enhance women's participation in the work sector in line with Vision 2030, such as the Saudi Institutions Law and relevant initiatives such as the Women's Support Fund of the Ministry of Human Resources and Social Development. In this context, the Pearl Initiative, a non-profit organization focused on enhancing corporate governance, accountability and transparency in the Gulf region, seeks to raise the standards of family businesses by providing educational programs that highlight the importance of governance and its methodologies that can achieve sustainable changes that provide women with opportunities for growth and advancement in family businesses.
Corporate governance is a priority
Rania Saadawi, Executive Director of the Pearl Initiative, says, “Governance is a worthwhile investment, if it is applied properly, and we reap good fruits. Diversity in leadership is very important to solving the problems we face, and the pace of change we are witnessing is accelerating, and the amount of data available to us changes every day.
Successful family businesses possess valuable characteristics, the most important of which are diversity at all levels, solid corporate governance and transparency. These characteristics provide employees with an incubating environment conducive to progress and allow talents to grow, and enable their leaders – male and female – to develop. With the wise vision and unwavering support of the Saudi government, Saudi family businesses will be able to embrace a culture of diversity in which succession plans are based on merit and competence, which will lead them to implement more sustainable businesses and thus achieve a more competitive global economy.
Based on the Pearl Initiative's keenness to improve corporate accountability and transparency in the Gulf region, the organization supports family businesses and helps them adopt a work culture based on corporate governance to ensure long-term profitability and continuity.
The Family Business Governance Program implemented by the Pearl Initiative brings together stakeholders and provides them with an open platform to speak transparently about the challenges and opportunities facing family businesses. The program includes information, discussions, dialogues, and practical workshops to support families in finding successful governance solutions.
To learn more about the Family Business Governance program, please contact the Pearl Initiative at [email protected]
Okaz (Jeddah)