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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
Recent developments suggest that governments in the GCC are beginning to take corporate governance seriously:
— On Jan. 1, 2011, Bahrain’s corporate governance code came into effect, covering public companies, with plans to extend the code to cover companies licensed by the Central Bank of Bahrain.
— In September 2010, the UN lent its support to the Pearl Initiative, a private sector-led program that aims to improve corporate governance and accountability across the GCC, through training and education.
— Since April 30, 2010, publicly listed companies in the United Arab Emirates have been subject to Ministerial Resolution 518, which sets out a number of key governance requirements. However, this resolution does not apply to companies and institutions wholly-owned by the federal government or a local government.
— Regional stock exchanges are more willing to punish fraud and illegal activity, and to defend the rights of minority shareholders.
— Regulatory authorities in Dubai are taking steps to tighten their stance regarding breaches of corporate governance, especially within private companies.