Family legacy: How to manage risk and avoid disputes

INTRODUCTION: FAMILY LEGACY

Families are central to the Saudi economy and to the region’s prosperity. Mourant, in collaboration with the National Center for Family Businesses (NCFB), Quinn Emanuel, Burford Capital and PwC, hosted a seminar entitled “Family Legacy: How to Manage Risks and Avoid Disputes”.

Dr Ayth Al Mubarak, Chief Executive of the NCFB, emphasised continuity, education and transparency as the foundations of durable family ownership. This is part one of two white papers intended to distil the practical guidance shared by the panel across both sessions, so that families can reduce risk, preserve relationships and protect enterprise value for generations to come.

Disputes in family businesses rarely arrive without warning.

They tend to arise through small governance gaps, unequal access to information, unclear exits and a gradual breakdown in communication. Prevention rests on three pillars.

First, a legal architecture tailored to the family rather than a generic template. That means shareholder agreements that specify valuation methods for exits, practical reserved matters with sensible thresholds, structured information rights and clear conflict disclosures.

Second, ownership and corporate structures that reduce friction over time, including appropriate holding vehicles and, where it suits the family’s strategy, the use of trusts or a staged listing to impose regular reporting and external discipline.

Third, family governance is lived and breathed daily supported by continuing education, so that all owners can read the numbers, understand distributions and participate as informed stewards rather than passive recipients.

We would like to thank the valuable contributions by Dr Ayth Al Mubarak (NCFB), Dr Nasser Alrubayyi (Quinn Emanuel), Dr Abdulaziz Alrashid (NCFB), Kassem Younes (PwC), Joe Durkin (Burford Capital), and Stephen Alexander (Mourant) who together shared their knowledge, expertise and experience.