The Palestine Exchange PEX Forum on family business Concludes with a call for more governance and institutionalization prior to listing on the Exchange Monday, 16 January 2012
Ramallah- 24 November 2011: Mr. Ahmad Aweidah, the Palestine Exchange (PEX) Chief Executive Officer, announced the concluding recommendations of the 5th Annual Palestinian Capital Market Forum, held in Ramallah, Palestine on 21 November 2011.
With family owned business constituting 85% of business entities in Palestine, the forum debated ways to graduate such companies to publicly held entities on the Palestine exchange by virtue of focusing on governance, institutionalization and professionalism as necessary steps for the transition in order to grow and sustain the business operations in an incredibly globalized economy.
The following are key recommendations of the Forum:
- Relevant parties should encourage good corporate governance practices among family businesses and issue a code of corporate governance of family owned businesses.
- Enhance awareness amongst owners of family businesses about future options for these companies. In-depth and objective debate should take place within family businesses to address challenges and risks facing these companies, inter-generational transition, conflict resolution, institutionalization, adopting good corporate governance practices, restructuring, investing in human capital, as well as the benefits of listing on the exchange.
- Family businesses should pay attention to HR development to professionally pave the way for the intergenerational transition of authority.
- Family businesses should do all necessary preparation before the legal transformation into public shareholding companies. Understanding the perspective of being a public shareholding company is more important than the transformation itself.
- The public sector including line ministries should provide needed support and guidance for family businesses s by offering certain incentives for family-owned companies. The public sector should also develop a needed database on these companies.
- Adopting the principal of gradual transformation from a family-owned business into a public shareholding company according to specific conditions. This should give enough time to owners to adapt to the new concept of sharing responsibility and decentralization and will allow regulatory bodies to review the financial and operational aspects of these companies so that once listed shareholders interests and market interest are protected.
The Forum was held under the patronage of Prime Minister HE Dr. Salam Fayyad, and with the participation of representatives of both the private and the public sectors from Palestine and abroad. The Forum was sponsored by PADICO Holding – Diamond Sponsor; the Palestine Investment Fund (PIF) – Silver Sponsor; Ernst and Young – Silver Sponsor; and a joint exclusive media sponsorship from Ellam Tam for Communications and Public Relations and PR Newswire.
For further information on the 5th Annual Palestinian Capital Market Forum, presentation and the final recommendations, please visit: www.pex.ps/forum