Interview: Ghassan Nuqul on governance and growth


Ask Ghassan Nuqul what is his greatest business achievement, and he’ll straight away mention his efforts to implement good governance in his family conglomerate. “The biggest decision I’ve made in my career is to separate ownership and management,” says the second generation vice chairman of the Jordanian Nuqul Group. “And the second biggest decision is to ensure our company adheres to the highest levels of governance one can possibly have as a family business.”

Ghassan emphasis on good governance places Nuqul on a pedestal in the Middle East, where many family firms are very autocratic when it comes to decision making. “Businesses in the region are dominated by the patriarch and in most cases you cannot challenge his authority,” says Ghassan. With at least 90% of the private sector in the region dominated by family-controlled businesses, the patriarch model of business is very powerful. 

But not at Nuqul. Ghassan’s father and founder of the business Elia didn’t follow tradition. “When I came into the business my father said ‘you’re my partner, not my son – and I want you to challenge the status quo’”, says Ghassan. “If it wasn’t because of my father’s progressiveness in this respect I wouldn’t have been able to achieve what I have done.” 

The Nuqul family has certainly achieved a lot since the company was founded in 1952. Employing more than 5,000 people, today the group comprises more than 30 companies spread across the Middle East and further. The core business – FINE Hygienic Holdings – makes and distributes paper and hygiene products. In fact, FINE is the biggest maker of facial and toilet tissue paper in the Middle East.

Another part of the business oversees Nuqul’s holdings in banks, insurance companies, car dealerships and real estate. The Amman headquartered business has operations in more than 10 countries, including the US, Egypt, Saudi Arabia and the United Arab Emirates. 

Ghassan, 52, joined the business in 1985 after earning degrees, including an MBA, in the US. His father is still chairman, but today the business is effectively run by Ghassan and non-family chief executive Salim Karadsheh. Marwan, Ghassan’s brother, sits on the board, and he has  two sisters are not directly involved in the business.

The family aspect of the business is central to Ghassan’s thinking on running the company. “When you run a family business you have a lot at stake – family well-being and of course corporate well-being,” he says. “So you have this motivation and drive as a result. But you also have considerable family business baggage around emotional issues.” 

Ghassan says that you can try to mitigate these emotional issues by setting up a family constitution and charter – Nuqul drafted a constitution in 2004 – but there are no guarantees that difficult family issues won’t come to the surface and affect the running of the business. “So you really have to manage and manoeuvre on a very tight rope,” he adds. 

The family have been accustomed to doing that not just from a family perspective, but also from an external one. With the capture of the West Bank by Israel in 1967, Nuqul’s markets in Jordan were severely affect, which led to a drive to develop markets further afield. And in 1970 Nuqul was forced to relocate to Lebanon for a year because of instability in Jordan. The Nuqul family were originally  Palestinians – Elia was born in Ramallah – and Ghassan reckons that this heritage helps to explain the success of the business. “There’s been a long history among the Palestinians of entrepreneurship,” he says. “Every time there is a refugee crisis, they work harder because they have nothing.”

Ghassan has three sons, with one working for the professional services company Deloitte. He says that as part of the governance structure at Nuqul family members wanting to come into the business need to show their desire to work there. “They also have to prove themselves outside of the business for a minimum of two years,” he says. “And I certainly don’t want the business to be dependent on family members.” 

Nevertheless, if Ghassan’s ambitious growth targets are achieved employment opportunities for both the family and non-family members are likely to increase substantially. There is a plan to double the size of the business in the next three to five years, and to help achieve that Nuqul recently did a deal with Standard Chartered Private Equity, which saw the group take a 25% stake in new capital linked to FINE. 

Ghassan says the move will help Nuqul achieve its growth targets and hopefully eventually lead to a listing on a public market. “This will probably be in a few years time in either Saudi Arabia, Dubai or even London,” he says. He adds that to get the family to agree these moves were the right strategy for the business meant a great deal of effort was spent on communicating the ideas behind the deal to all involved. Eventually the family and managers bought into the growth strategy and Ghassan led the move to bring in an outside shareholder. 

From Standard Chartered’s point of view, Nuqul represented a great example of a regional business with exceptional growth prospects and sound governance structures. The relationship is expected to be closely watched by many other regional businesses, which are interested in stepping up their growth drive in the years ahead and are keen to tap external sources of finance in able to do so. 

Ghassan says he’s content with the family owning less of the business if that means better prospects. But that doesn’t mean compromising Nuqul’s legacy. “We will continue to be guided by the best principles of family businesses, like long-term planning and patience,” he says. And, of course, excellent governance.