From Building Wealth to Establishing an Enduring Legacy
Saudi Arabia and the broader Gulf region is in the midst of a great transformation. New economic opportunities are expanding industries and driving new investments. The next generation of family members and business leaders are increasingly engaged with global trends and developing greater business sophistication, bringing new perspectives that are reshaping families and their enterprises. Families are taking steps to formalize governance, set up family offices and external investment councils, and engage spouses and adult children in advisory board positions or philanthropic initiatives.
Saudi families have built wealth in the region and beyond—now they are looking to build their legacy. In addition to sound investment strategies, a holistic wealth plan that includes effective governance practices can help families preserve their financial capital and achieve multigenerational success and harmony.
What is family governance?
Family governance is the values, processes, and structures that guide the interaction between the family and its business(es). It is characterized by trust-building, effective communication, and strategic planning for both financial and non-financial assets.
Family governance can be an important aspect of wealth planning because it’s an integral part of managing risks and optimizing performance. For example, governance practices can help families establish a succession plan early, so they can make thoughtful decisions, give upcoming leaders time to develop skills, and foster family trust and unity.
Why governance is important for Saudi families
Saudi families have considerations similar to those of families around the world. Many are faced with the complex challenge of strategically and thoughtfully managing wealth, business operations, and family relationships across generations.
Families in the Kingdom also face unique circumstances that can impact their long-term success:
- Decision-making is often centralized around a single senior family leader or a few family members.
- Large families may increase the complexity of governance and estate planning.
- Succession planning may be reactive. 95% of businesses in the Kingdom are family-owned, yet 59% of families do not have a succession plan in place.
- Ongoing changes in Saudi Arabia’s tax, legal, and regulatory environment are affecting both local and offshore wealth planning strategies. For example, the Kingdom’s new Companies Law allows family constitutions to become legally binding by incorporating them into a company’s articles of association or bylaws.
“Many of Saudi Arabia’s leading family businesses were built during the oil boom era and are now approaching a pivotal generational transition,” says Ismael Hajjar, partner at the International Private Wealth and Family Office at PWC Middle East. “A significant number still lack formal succession plans or family charters. Without structured planning, leadership transitions can become a source of uncertainty. Addressing succession proactively while founders are still actively engaged creates clarity, preserves values, and strengthens family cohesion.”
How can Saudi families implement effective governance?
Families can implement practices that help them create and adhere to structures and processes for decision-making. Some strategies include:
- Drafting and formalizing governance documents, such as family charters or succession plans
- Educating and engaging family members on governance processes to create alignment on roles, responsibilities, and decision-making
- Scheduling regular family meetings specifically to discuss business and legacy topics, and to adapt the framework to changes like marriage, birth of children, bringing new family members into the business, and selling the business
- Implementing an external council who can help the family follow through on processes, decisions, and manage risks and challenges
7 key themes for legacy planning
Governance is just one part of legacy planning. The framework below can help families in the Kingdom answer important questions around seven key legacy considerations and help establish a plan that works for them for generations.
1. Goals & Purpose |
What is the purpose of your wealth? What are the motivations behind your financial decisions? |
2. Family Ecosystem |
How are you managing all areas of your interconnected family ecosystem (for example, the business, family office, and co-owned real estate holdings)? |
3. Governance |
How does your family make important decisions today? Is decision-making designated to one person or multiple family members? What could improve your decision-making quality? |
4. Succession |
Who will lead the business and/or manage the family wealth in the future? Does everyone know and agree on the policies of this plan? |
5. Next Generation |
How does your next generation fit in your long-term stewardship plan? What are you doing now to achieve that plan? |
6. Philanthropy |
In addition to your giving strategy in accordance with Sharia, which causes matter most to your family? What would improve your philanthropic strategy and impact? |
7. Execution |
How can you best support your long-term goals with informal and/or formal structures and policies? |
A holistic legacy plan that includes effective family governance practices can help empower families to strategically navigate challenges and opportunities—helping them preserve financial capital and values for generations. Every family is unique, and their approaches to legacy planning may vary. Your advisor can help customize and adapt governance and legacy frameworks to your family’s values, customs, and goals.
If you’d like to learn more about how Goldman Sachs is uniquely positioned to serve you and your family in Saudi Arabia, please reach out to your representative.
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