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Empowering Women in Family Businesses: A Catalyst for Economic Growth and Social Cohesion

Empowering Women in Family Businesses: A Catalyst for Economic Growth and Social Cohesion

 

Family enterprises are pivotal drivers of economic development and fortification within a nation. To ensure their sustainability and continued prosperity, the state has enacted legislation to govern family companies, safeguarding their longevity and fostering an environment conducive to their growth. Concurrently, this framework reinforces familial bonds, solidifying the fabric of society.

 

The Evolving Role of Women in an Era of Economic Progress

In tandem with economic advancements, women have assumed a vital role in family enterprises, transcending their traditional nurturing responsibilities to actively engage in commercial endeavors managed through the family company.

On a global scale, aligned with international efforts championing gender equality, women have ascended to leadership positions within family companies, assuming directorial roles, participating in decision-making processes, and voicing their perspectives. Their perseverance in ensuring the prosperity and development of the company, which they may inherit from their fathers or deceased husbands, is a testament to their true commitment.

 

The UAE’s Support for Businesswomen

The UAE has taken a proactive stance in advocating for the empowerment of women in family businesses, establishing businesswomen’s councils across the nation. These councils aim to raise awareness and educate women, enabling them to contribute substantively to economic development.

Through the provision of training and qualification programs, workshops, consultations, and the facilitation of experience-sharing among businesswomen, the UAE empowers and encourages women, bestowing upon them opportunities to participate as effective members with leadership acumen in the realm of entrepreneurship.

This holistic approach equips women with the requisite skills to become competent and influential members of the family company, contributing to decision-making processes and proposing ideas that foster growth and development.

 

A Shining Example: Raja Al Gurg’s Success Story

One of the most notable examples of women who have successfully developed the family business is the Emirati businesswoman Raja Al Gurg, who assumed the role of Chairman of the Board of Directors at the Easa Saleh Al Gurg Group, succeeding her father. Her ability to grow the company she headed, increasing its investments, led to its resounding success, expanded operations, and flourishing business. Her achievements have inspired Emirati women to pursue leadership positions and seek education in this domain.

 

Challenges Confronting Women in Family Businesses

Despite their accomplishments, women face challenges in their involvement with family businesses. As potential heirs to the company, they may lack the requisite experience, posing an obstacle in decision-making, crisis management, and overall company administration.

Furthermore, some women may prioritize their roles as nurturers and caregivers over entrepreneurial aspirations. In this context, the family’s role in cultivating a business mindset becomes paramount, fostering generational transmission of knowledge and instilling a culture conducive to the sustainability of the family enterprise.

 

The Importance of Gender Balance and Cooperative Family Dynamics

Gender balance in terms of company membership is crucial in encouraging women’s success within the company’s operations. This success hinges upon the extent of cooperation among family members in creating opportunities for women, empowering them with decision-making authority, and enabling them to gain the experience necessary to develop their skills, ultimately assuming influential positions within the company. Underpinning these efforts is the cultural and societal awareness of family members.

The Impact of the Family Business Law

Federal Decree Law No. (37) of 2022 regarding family companies has regulated this type of enterprise, aiming to facilitate intergenerational transfer and ensure continuity.

The law provides mechanisms tailored to family companies for resolving disputes, acknowledging their unique nature as entities that contribute to both societal and economic prosperity simultaneously.

To achieve the decree law’s objective of preserving the continuity of the family company, it stipulates that the family may establish a charter encompassing rules concerning ownership, goals, values, mechanisms for evaluating shares, and methods for distributing profits.

Moreover, the law outlines methods for qualifying and educating family members to work in the family company and its subsidiaries, as well as mechanisms for examining family disputes related to them. The Family Business Dispute Resolution Committee has been designated to consider such disputes.

In order to safeguard the family company’s assets and ensure their investment among family members, the law grants priority to partners in the family company to purchase the bankrupt or insolvent partner’s share in the family company, at the price and period determined by the court overseeing the bankruptcy or insolvency proceedings.

Furthermore, the law grants the heir the right to remain in the family company to the extent of their inherited share or to dispose of it, taking into account that if one of the partners wishes to dispose of their share, they must first offer it to the remaining family partners. However, as an exception, they may assign their share, with or without compensation, to their spouse or any of their relatives up to the first degree, without offering it to the remaining partners, unless the charter or articles of association stipulate otherwise.

 

Conclusion

Women are fundamental pillars in the formation of a family. Their participation in family businesses and enterprises plays a pivotal role in their economic development and the strengthening of familial ties from a social standpoint. Additionally, their involvement serves as an incentive for future generations of women who may manage family businesses.

This empowerment is facilitated by legislation that safeguards women’s rights in this sphere and contributes to enabling their engagement, complemented by the state’s initiatives to activate and empower women in family companies, ensuring their continuity and inheritance across generations.

As educators, business leaders, and exemplars for subsequent generations, women are encouraged to contribute to preserving the existence of family businesses, recognized as essential drivers of the state’s economy.


 

The authors of this insight are Ibtisam Al-Raisi and Meera Al Ali.

Ibtisam is a qualified Emirati advocate with full rights of audience before all levels of the UAE Courts. She successfully represents clients in a wide range of complex matters including disputes, real estate, commercial, and employment matters.

Meera is a dedicated trainee advocate in the Dubai office. With a strong focus on UAE disputes, she possesses valuable expertise in navigating the intricacies of the UAE Court System.

For more information, contact them at:

Ibtisam Al-Raisi

Advocate

ibtsam.jaffar@galadarilaw.com

Meera Al Ali

Trainee Advocate

meera.al-ali@galadarilaw.com