Tharawat Family Business Governance Checklist 2012

Family Business

Governance CHECKLIST 2012

Concept and Family Governance by Farida F. El Agamy Corporate Governance by Noor Sweid

www.tharawat.org

01

Your Governance Checklist Dear Reader Family and Corporate Governance is an ever-present topic for each and every family-run or –owned company.

This short Checklist gives you the opportunity to go over your current family governance and corporate governance structures and reflect about where you stand and what you want to achieve.

Ask yourself: What are the family’s and the business’ goals and visions?

Do you have structures in place to allow you to achieve your goals?

How is your family organized?

How is your business organized?

Is there harmony between the organization of your family and your business?

What do you need to develop or update existing structures?

The Checklist consists of 4 parts: A | My role B | The Family Governance C | The Corporate Governance D | Comments The Checklist can develop much effect if some of its results are shared amongst the family members or discussed with a third party present. The resulting dialogue can be a step towards the development or improvement of a mutually agreeable and sustainable governance system.

Should you have any questions relating to the Family Business Governance Checklist or want to know more about Family Business Governance in general, please do not hesitate to contact info@tharawat.org Yours truly, Dr. Hischam El Agamy Executive Director Tharawat Family Business Forum

02 An Overview 1. How to fill in the checklist: To answer the below questions you will be given the option to either answer “yes” or “no” Yes

No

to comment on a question r grade your position as follows o 0 (non-existent) to 5 (fully developed and implemented) 0

1

2

3

4

5

2. What to do with the Checklist? you can keep it or share it with your family for discussion and reflection. you can send it to Tharawat (anonymously if required) for a short analysis. you can send it to Tharawat and ask for an in-depth analysis and assessment of your governance system.

03 A | My role in Family and Business A.1. In the family business, I am a shareholder. a future shareholder. not a shareholder.

Yes

No

A.2. I am employed in the family business. aiming to be employed in the family business in the future. not employed in the family business.

Yes

No

A.3. I feel that I can have an impact on the family and the business.

I can have an impact on the family.

I can have an impact on the business.

I cannot influence the family.

I cannot influence the business.

1

2

3

4

5

A.4. My contribution in the business is mainly to Stimulate growth.

Improve existing structures.

Enable flexibility.

Increase efficiency.

Promote openness.

Embed innovation.

1

2

3

4

5

A.5. I am taking this survey because: I want to understand more about our governance system.

I want to look at my role in the family business.

I want to see how I can support my family and our business.

I want to analyze the relationship of my family with our business.

I want to benchmark our system.

1

2

3

1: Not at all

4

5

2: Very Little

3: Average

4: Very Much

5: Always

04 B | The Family Governance B.1. Overview Do we have a

0

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2

3

4

Family vision Family mission Family plan for the development over the next years Chart of family members involved and not involved in the business 5

B.2. Family Constitution Do we have a Family constitution 0 1 2 3 4 5 (or Family Protocol, or any other framework document organizing the family, its interests, and its involvement in the business) The following elements may or may not be part of a family constitution‌ Do we have a Code of conduct for family members Shareholder agreement Employment conditions and regulations for family businesses Succession policies Emergency succession plan Education policies for family members Family benefits policy Dividend policy Nomination procedures for board members 0

1

2

3

4

5

B.3. Family Institutions Do we have a Family assembly (gathering all family members) Family council (small group of family members, representing the family and shaping policies) Youth council or committee Shareholder assembly Conflict resolution mechanism 0

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2

3

4

5

B.4. Other structures Involvement of passive family members in decision-making Focused talent development for family members Structure for charitable activities 0

1

2

3

4

5

0: Non-existent 1: Exists in our minds 2: Exists on paper but few people have ever seen it

3: Exists on paper and we have shared it/ communicated it with the family 4: Exists and the family strongly believes in it/ implements it 5: E xists and the whole family believes in it and it has been part of the system for a good while

05 C | Corporate Governance: C.1. High level matters We have a Company vision Company mission Corporate strategy Corporate organizational structure (Eg. holding‌) 0

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2

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4

5

C.2. Board of Directors We have Board composition rules Board meeting frequency Subject matters the board regularly votes on Board voting rights/quorum requirements Board independent members Reporting structures (management to board) Roles of chairman and CEO Continuous education of the board members 0

1

2

3

4

5

C.3. Corporate Governance Committees We have a Audit committee Remuneration committee Nomination committee Risk management committee 0

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3

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5

C.4. Company Organization We have a Organizational chart Succession plan HR: Grading structure HR: Career pathing HR: Appraisal scheme for executive level employees HR: Strategy and employee remuneration plan 0

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2

3

4

5

0: Non-existent 1: Exists in our minds 2: Exists on paper but few people have ever seen it 3: Exists on paper and we have shared it/communicated it with the company 4: Exists and the management strongly believes in it/implements it 5: Exists and the whole company believes in it/knows it

06 D | Comments Which element in your family governance is currently the most efficient?

Which element in your corporate governance is currently the most efficient?

Do you think that your family governance system needs improvement? Why and where?

Do you think your corporate governance system needs improvement? Why and where?

What is the most urgent issue to be addressed?

Do you think your family would want the help of a third party or would it be better to do everything within the family?

Submit to | T harawat Family Business Forum Tel: +971 (0)4 452 6578 | Fax: +971 (0)4 452 4873 info@tharawat.org

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