Governance of family businesses in Saudi Arabia and women's empowerment 2025

Recent data reveals a critical situation in Saudi Arabia's family business sector, requiring serious attention. Statistics show that only 27% of family businesses have clear, written policies to facilitate the participation of female owners within their administrative and supervisory structures. This figure points to a regulatory gap that could negatively impact the efficiency of governance and the sustainability of this vital sector, particularly in light of the major economic transformations underway in the Kingdom.

This announcement came during the Women in Family Businesses Council event, organized by the National Center for Family Businesses in partnership with the Tharaa Association in the Eastern Province, and under the patronage of Her Royal Highness Princess Abeer bint Faisal bin Turki. The council, themed “Investment, Finance, and Strategic Decision-Making,” focused on the need to transform women’s ownership from mere numbers on stock exchanges into an active force in decision-making.

The economic context and the importance of family businesses

This issue is of paramount importance given the significant economic weight of family businesses in the Kingdom and the Gulf region. They form the backbone of the non-oil private sector, contributing substantially to the GDP and employing the national workforce. With the launch of Vision 2030, which prioritizes women's empowerment and increased economic participation as a key pillar, these family-owned businesses must align their internal systems with national objectives to ensure their sustainability and competitiveness.

The sustainability and smooth transition of family businesses across generations faces a historic challenge: how to integrate all qualified family members, both men and women, into the business. Global studies confirm that diversity on boards of directors fosters innovation and reduces risk, making the inclusion of women in leadership positions a strategic imperative, not merely a supplementary option.

The gap between ownership and practice

Discussions during the council meeting revealed a clear discrepancy between women's legal and religious rights as owners of assets through inheritance and their practical reality within the company. While Islamic law and Saudi regulations guarantee women's full right to ownership, nearly half of family businesses lack any regulatory framework defining their role, making their participation subject to personal interpretations and family relationships rather than competence and institutional merit.

The review indicated that less than a third of businesses have publicly stated policies, while a significant proportion implement only partial policies. This lack of institutional organization could open the door to future conflicts that threaten the cohesion of both the family and the company, particularly during the transition of leadership from the founding generation to the next generation.

Diversity of roles and the impact of women's leadership

Experts and specialists, including Dr. Aaidh Al-Mubarak, CEO of the National Center for Family Businesses, emphasized that empowerment does not necessarily mean day-to-day executive work. There are multiple avenues for women's contribution, ranging from financial literacy and understanding financial statements to active membership on boards of directors and their subcommittees.

Reports have shown that the presence of women in leadership positions adds qualitative dimensions to institutional performance, including:

• Enhancing oversight and compliance: Female leaders often tend to adopt a thoughtful approach to risk management.
• Emotional intelligence: which contributes to bringing viewpoints closer and resolving internal family conflicts.
• Strategic dimension: A deeper understanding of consumer market trends and the needs of the family and society.

A promising future for women's investment

This awareness campaign coincides with an unprecedented surge in women's entrepreneurship in the Kingdom. Ministry of Commerce data indicates that women now hold a significant share of new commercial registrations, with a strong presence in key sectors such as industry, construction, and technology. This transformation confirms that Saudi women have become genuine partners in development, and the onus is now on family businesses to develop their charters in a way that ensures the utilization of these latent capabilities for sustainability and future growth.