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About SEDCO> New at SEDCO> Current statements
Interview with Mr. Shuaib Ahmed, CEO
Shuaib Ahmed, the Chief Executive Officer of SEDCO group of companies, is a 38-year veteran of Citibank/Citigroup. He spent 14 years as a member of Citibank’s/Citicorp’s Credit Policy Committee, the highest level of credit decision making authority in the Bank, and retired in March 2004 as a Managing Director of Global Risk. He is a Sloan Fellow of the Sloan School of Management at the Massachusetts Institute of Technology and holds a master’s degree in management science from that university. In July 2005, Mr. Ahmed completed his first year as the CEO of SEDCO group of companies. Here is a transcript of an interview on his first anniversary.
- You were with Citibank/ Citigroup for 38 years. Please tell us of your experience with that organization.
I joined Citibank in Pakistan as an executive trainee in October 1965 and worked there for eight years. In January 1974, was transferred to Saudi Arabia as the general manager of Citibank in Riyadh. The next 30 years were spent with Citibank, working around the world in every continent except South America. Citi was a great place to work. One of the most international of the multinational corporations, it was hard driving, pushing you to the limit to excel and produce results, but was also quick to give recognition in terms of higher responsibility, career progression and financial reward. Everything I learned as a professional in the past 38 years, I owe that to Citi and to a large group of people -- my seniors, my peers, my juniors -- who helped me along the way, whether I was posted to Karachi, Lahore, Manila, Riyadh, Nairobi, Athens, New York, London or Singapore.
- On the anniversary of your appointment as CEO of the SEDCO group, can you reflect on your experience so far?
When I started with the SEDCO group, I had a number of advantages going for me. First, I was not new to Saudi Arabia, having been here with Citibank from 1974 to 1977 and a member of the Board of SAMBA in the late 1980s. Second, I had been associated with the SEDCO group since January 2000 as a member of its board. So both the country and the Company were not new to me. As a result, adjustment was not an issue, and I was functional from day one. The time I have spent here so far has been a fascinating experience. I have been very impressed with the informality of the working environment and the frequency of personal contacts with people throughout the Company. People accomplish things by talking to each other rather than resorting to long memos and e-mails. There is very little bureaucracy and decisions get made quickly.
- Please give us an overview of the SEDCO group and what business is it in?
SEDCO is a major, innovative, private wealth management organization that oversees a wide and diversified spectrum of financial, real estate and direct investments in Saudi Arabia and around the world. The organization combines modern money management techniques with Islamic investment guidelines. It is a leader in pioneering Islamic investment products and subsequently broadening the Shariah-compliant investment opportunities for Muslims.
- Is the SEDCO group a family business in the true sense of the word?
The definition of a family business as one that is owned by members of the same family is true for the SEDCO group, which is 100 percent owned by the sons and daughters of the late Sheikh Salem Bin Mahfouz.
- How serious is the SEDCO group about adhering to Islamic investment guidelines?
Compliance with Shariah guidelines is one of the basic requirements that have to be met in any investment or business before we consider it. Investments that do not comply with Shariah are of no interest to the SEDCO group and we will not get involved.
- At what stage of their development do family businesses appoint professional managers to lead their companies?
I do not believe there is a precise stage of development when a family business should appoint a professional manager to lead it. There are many highly successful companies around the world, including many multinationals that have been managed successfully by even third or fourth generation family members. Professionals should be brought in when family members either prefer not to be involved in management or do not have the necessary experience or skill to guide the Company in this rapidly changing world. In a professionally managed company, the merit of the individual and his contribution to the Company should be the ultimate criteria in career advancement, not whether someone is a member of the family or not.
- How would you categorize the SEDCO group? Is it an organization managed by family members of the owners or by outside professionals?
The SEDCO group of companies was established as a real estate and commercial organization and since 1996 it has expanded its scope to become a pioneering wealth management organization. Over the years, it has taken several steps toward becoming a lasting professional organization. Corporate governance issues have been addressed; the SEDCO group of companies has an active board of directors with eight members. There are four family members -- Sheikh Mohammed Salem Bin Mahfouz, Sheikh Saleh Salem Bin Mahfouz, Sheikh Abdelelah Salem Bin Mahfouz and Sheikh Ahmed Salem Bin Mahfouz -- and four non-family members: Sheikh Saleh Alturki, Dr. Hani Findakly, Dr. Arifin Siregar, and myself.
For the past several years the Company has been having its results and processes audited by one of the top accounting firms. The board has an Audit Committee headed by a non-family board member, and an Executive Committee, where the decisions are made by majority vote and a majority of the members are non-shareholder executives of the Company. I am the first CEO who is not a family member. Of the three managing directors, one is a non-family member executive who has been with the group for eight years, and four out of the six senior vice presidents are non-family members. The shareholders want the Company to be managed professionally and they look for the best qualified individual resources possible. If those resources are not available within the family, they have no qualms about going outside. Because the SEDCO group is a private organization, the shareholders were under no obligation to have non-family members on the board, on the Audit Committee or as CEO. But they have done each of these things to ensure that the Company is professionally managed.
- Would you recommend this experience to other family businesses in Saudi Arabia?
Yes, absolutely, provided the owners are prepared to give the non-family CEO and the other members of the top management the totally unqualified support they need to succeed.
- What governance pre-requisites do family businesses have to put in place for this experience to succeed?
Corporate governance matters -- such as board constitution and authority, internal and external audit procedures, limits on authority, clear strategic direction, and clearly defined policies and procedures -- are important. Also family governance matters -- such as family council, vision and mission, and investment and employment strategies -- are equally important. Family members have to feel satisfied with the business and see it as successful in order to support the management team.
- What support does the professional manager need from shareholders in order to succeed?
The shareholders must select a person for the top slot who has their absolute trust and support, but they should remain available to give advice and should continue to be involved in strategic issues. All in all, it is an organic dynamic relationship that needs proactive nurturing from both the shareholders and the professional manager.
- Your role in SEDCO organization is not limited to CEO; you are also a member of the board as well as the head of Strategy Committee. Do these roles clash?
My relationship with the SEDCO group started as a board member in January 2000. The Chairman of the Board, Sheikh Mohammed Bin Mahfouz, asked me in March 2003 to head the board’s Strategy Committee, which is responsible for formulating the strategic direction of the Company. This gave me a deeper insight and an intimate familiarity with the operations of the Company. It was only later in June 2004 that the Board asked me to become the first non-family CEO. I still execute the three roles. It is natural and quite common for the CEO to be a member of the board. In fact, I am not aware of any well-managed, well-regarded global company where the CEO is not a member of the board.
- You have many Saudi executives reporting to you in the SEDCO group. How do you assess their abilities?
Having international experience usually makes a person better able to compare and contrast the ability and competence of people in different countries. At SEDCO, there are several Saudi executives who can hold their own in any setting locally and internationally. They successfully interact with business partners from almost all parts of the world and get superior results. But I was well aware of the abilities of Saudi executives even before I joined SEDCO, having recruited a good number of fresh Saudi graduates for Citibank in Saudi Arabia almost 30 years ago, most of whom later assumed leadership roles in SAMBA and other Saudi companies.
- One of your priorities has been to recruit Saudis. What success have you achieved so far?
We have been very successful. In the past 18 months, we have recruited more than 30 fresh Saudi graduates to train with the SEDCO group and become part of our professional team. These youngsters have been carefully selected. Aside from the trainees, in the area of recruitment in general, we have concentrated on recruiting qualified Saudis and here also we have been successful. Over the same 18 months, more than 75% of recruitment has been of Saudis. Ambitious, diligent, energetic young Saudis have a good future in the SEDCO organization awaiting them.
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