Why Gulf family enterprises are turning to non-family CEOs

Nicolas Manset, head of Middle East at Russell Reynolds Associates/Image: Supplied

Family-owned conglomerates remain the backbone of Gulf economies, but the leadership equation inside these businesses is undergoing its most profound shift in decades. According to Nicolas Manset, head of Middle East at Russell Reynolds Associates, the region is now at a pivotal moment: increasing numbers of family enterprises are considering non-family CEOs for the first time. Economic transformation, global competition and emerging governance expectations are accelerating this transition — bringing the GCC closer to global family business trends while presenting distinct regional challenges.

In this interview, Manset shares what is driving the shift, the barriers families face when welcoming external leaders, and the governance frameworks required to ensure long-term success.

You’ve observed that more Gulf family businesses are considering non-family CEOs for the first time. What’s driving this shift, and how significant is it compared to previous decades of family-led management?

“We’re witnessing a significant shift: Gulf family businesses are considering non-family CEOs for the first time.

The driver is clear – the Gulf has become a leading global market attracting foreign businesses and investors. Homegrown enterprises now compete against the best of the best, not just regional rivals. Success at this level demands global mindsets, international benchmarks, and increasingly, global leadership experience.

This is particularly significant for family businesses, which represent an immense financial force in the Gulf states. While the trend is still emerging, we see it driven by three forces: trade uncertainty, intensifying global competition, and technological transformation. These pressures are pushing family enterprises to reconsider leadership structures that served them well for decades.”

How does this emerging trend in the region compare to what you’re seeing globally when it comes to professionalising family business leadership?

“Family businesses worldwide face significant succession hurdles – and the GCC is no exception.

What’s distinctive is timing. The Gulf’s sustained wealth surge over the past half-century insulated the region against external pressures. But that protection is eroding. Business leaders are now starting conversations about transformation, aligning with a rising global sense of urgency.

The numbers tell the story: According to our survey of more than 1,000 global executives, 73 per cent believe their organisation risks going out of business in the next 10 years without changes to their core business model, revenue model, product offerings, or markets. And 78 per cent view transformation as critical to long-term growth and stability.

This urgency has reached the Gulf. When the Abu Dhabi Chamber of Commerce and Industry launched the Abu Dhabi Family Businesses Council in December 2024, it defined the council’s first role as assisting in succession planning. That choice of priority speaks volumes.”

What are the biggest barriers family enterprises in the Gulf face when introducing external leadership — and how do they typically overcome the cultural and trust challenges involved?

“As family businesses in the GCC transition from second- to third-generation ownership, the biggest barriers to external leadership are emotional and cultural – not technical.

Regional cultural sensitivities around challenging elders and discussing retirement can hinder the entire succession process. The transition often stirs deep emotions within family enterprises. This journey requires delicate navigation, blending pragmatism with respect for the profound emotional investment the founding family has made over generations.

Throughout a family enterprise’s lifecycle, pivotal moments emerge when professional management becomes valuable: expansion into new markets, increased operational complexity, or when the next generation isn’t ideally suited for succession.

The path forward involves identifying which aspects of the business represent the heart of the family’s connection—perhaps the foundational purpose, core values, or long-term strategic vision. By deliberately maintaining family oversight in these crucial areas while delegating day-to-day execution, external leaders can create space for their professional expertise alongside the family’s essential influence. This balance is critical to successful transitions.”

Your latest CEO Turnover Index shows average global CEO tenure near a record low. What lessons can regional boards draw from this volatility when planning long-term succession strategies?

“Our latest CEO Turnover Index shows that for leaders across 13 global stock markets, turnover remains elevated, with average CEO tenure near a record low.

What’s driving this? Growing expectations on CEOs, broader responsibilities, and constant pressure to reinvent organisations amid an accelerating business environment. For Gulf family businesses considering external leadership for the first time, these dynamics are particularly relevant—they’re not just hiring a CEO, they’re hiring into a more volatile leadership landscape.

The critical lesson for regional boards: you cannot simply appoint external leadership and assume success. Directors must be able to trust the systems in place to support new CEOs through these pressures.

This explains the growing demand we see for CEO assessment and development services – including CEO readiness evaluations, CEO potential assessments, leadership assessments, and structured development support throughout each stage of the transition. Boards that invest in these support structures position their external leaders to succeed despite the broader volatility we’re seeing globally.”

Many family businesses are strengthening governance structures to prepare for external leadership. What best practices are emerging in board composition, accountability, and succession frameworks?

“Global attention on this region is raising the governance bar – and homegrown businesses have recognised that governance isn’t merely about compliance. It’s about building trusted, resilient, and sustainable brands through best practices.

Before undertaking significant transitions like succession, senior leaders must establish the governance architecture to support their evolving enterprise. Several structures are proving essential:

• Thoughtfully designed family councils create forums for family voices

• Boards with independent directors bring valuable external perspective

These complementary structures provide necessary balance – one preserving family input, the other ensuring objective oversight.

As business challenges grow in number and complexity, pressure on board agendas and members increases. Boards continue to grapple with altering their composition to oversee their entities effectively, with many seeking more specialised experience to match their strategic needs.

The emerging pattern: governance structures must evolve before leadership transitions, not during them. Families that build robust boards and clear governance frameworks first are better positioned to integrate external leadership successfully.”

With geopolitical uncertainty and technological disruption accelerating, what leadership qualities are most in demand among Gulf companies today?

“With geopolitical uncertainty and technological disruption accelerating, three leadership qualities are proving crucial for CEOs across the Gulf states: patience, agility, and respect.

Patience: The shift from informal decision-making to structured reporting relationships represents a significant adjustment. What once happened through casual conversations over family dinners now requires formalised channels. This evolution demands patience from all parties as new habits form and relationships recalibrate.

Agility: Many Gulf family businesses are conglomerates with incredibly diverse portfolios. Running an entire group of very different businesses, each demanding completely unique knowledge and skills, is a highly demanding exercise in agility. Leaders must be able to shift contexts rapidly while maintaining strategic coherence across the portfolio.

Respect: Effective professional managers understand their role isn’t to erase the family business’s history but to build upon it. They approach a company’s heritage with genuine respect, seeking to understand its deeper significance, then introduce changes that complement rather than contradict foundational elements.

Together, these qualities enable external leaders to drive transformation while honouring the family enterprise’s legacy – a balance essential to success in the Gulf market.”