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Putting the pressure on progress for corporate governance
Investors must push companies for better regulation and best practices, if corporate governance is ever going to move forward in the GCC.
April 13, 2011 12:31 by Precious de Leon
Kipp recently sat down with Martin Bond, a partner at NxD Global, to talk about the state of corporate governance in the Middle East.
NxD focuses on the insertion of a non-executive member on the board to consult, observe and bring in new ideas to a company.
We got to talking about changes happening in the region—a business environment that is dominated by family businesses—and the kind of reception the company has had when proffering the idea of a non-executive on the board.
Now while, we’re still getting a little more data on the issue, we found these comments from Standard & Poor (S&P) talking to Reuters about the state of corporate governance in the GCC. These comments basically put the onus on investors to demand that corporate governance be put in place and the regulations are standardised.
The comments are taken after S&P released a report called “Corporate Governance Moves Center Stage As Gulf Countries Aim For Increased Transparency.” It examines the progress being made by the GCC on the issue.
The report points out that governance among rated GCC banks is at a more advanced stage than in the corporate sector. However, the level of problems faced by GCC banks during the global financial crisis indicates to us that there is room for improvement.
Here are the comments from S&P Analyst Amra Balic:
- “Corporate governance, long considered the Achilles heel of companies in the Gulf region, is beginning to feature strongly on policymakers’ radar.”