Family businesses are a pillar of the Saudi economy, and their biggest challenge is usually the transition between generations. As the family grows and roles multiply, new questions appear: who manages? How are family members hired? How are profits distributed? And what happens if an heir wants to sell?
A family charter answers these questions before they become disputes. It typically covers:
- Separating family ownership from company management.
- Criteria for employing family members and assessing their performance.
- The family council and its role in major decisions.
- Dividend and reinvestment policy.
- Rules for transferring and disposing of shares.
- Preventive dispute-resolution mechanisms before anything reaches court.
A charter does not work on its own: it has to be reflected in the memorandum and articles of association to become binding. At Batat we draft the charter and tie it to the company's legal structure, so the business and the family stay together.
