Family businesses need to go public

MANAMA: Family businesses in Bahrain need to go public in the coming years to survive the market and economic fluctuations, said a top businessman.

Yusuf Bin Ahmed Kanoo Group (YBA Kanoo Group) director and Kanoo Travel president Nabeel Kanoo told the GDN that business models were quickly changing and owners ought to take right decisions.

“The survival of any family business is to go public,” said Mr Kanoo.

“If you don’t go public, you end up disappearing.”

YBA Kanoo Group underwent a major restructuring process against the backdrop of volatile economic situation in the region and low oil prices.

Its future plan now is to become initial public offering (IPO) ready in three to five years.

“We have a long way to go before we go public, but if the family is ready and wants to go that road, it will take four to five years because we are a big company spread in three countries.

“If you look at most of the organisations and companies in North America or Europe, the bulk is family businesses that went public to safeguard the company.”

“When you go public, you are opening up for accountability and proper corporate governance system.”

He said organisations that do not change will face family issues in the future.

“There is extra money coming in when you go public and also extra liability and responsibility.

“For example, before it was my cousin and I, but now we have shareholders and have to follow a code of conduct.”

Mr Kanoo was speaking on the sidelines of a media ghabga the company organised at the Gulf Hotel Bahrain Convention and Spa.

He explained how the group under the chairmanship of Khalid Kanoo restructured the business model and launched a series of measures that would enable family members within the family business to play an active role in the business.

Working family members receive a salary and bonuses which are linked to the performance of the business in which they are working.

“The business dynamics are changing and now everyone has to prove themselves and deliver including family members.

“ There is no such thing as a free lunch anymore and the family is growing, while the profits are not the same as the past.”

Mr Kanoo said family businesses should “ fix their house” with changing times.

“ I hope what we are doing internally within our organisation will be a model for other family businesses to adopt.”

Meanwhile, commenting on Bahrain’s economic status in the region, Mr Kanoo said the country will “ always have an edge” over others.

“We have the edge but need to focus on that edge now.”

“It’s time we should know how to be more proactive or specialised in certain field to attract investment.

“Bahrain has an educated workforce, open business environment and expats can live or work freely.”

He said that with low oil prices and regional downturn, austerity measures should be adopted in a right manner.

“The government should not be an obstacle for the private sector.

“We need to encourage entrepreneurs and cannot rely on government to keep spending.”

Source: http://www.gdnonline.com/Details/541147