Raising the standard of corporate governace in the Middle East

  • The Impact of Corporate Governance on Investor Success

    For investors, good corporate governance is vital in giving them oversight of a company's internal policies, control mechanisms, and decision making.

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  • How Corporate Governance Protects Family Businesses and Preserves Family Values

    The family-owned business has long formed the bedrock of the Middle Eastern economy, constituting as much as 90% of all companies and contributing around 60% of GDP in the region.

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  • How Executives Can Leverage Their Knowledge of CG For Greater Success

    Executives who invest time in developing their knowledge of corporate governance can add greater value to any organization that they are a part of.

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  • Corporate Governance: The True Value for Entrepreneurs

    Entrepreneurs in the Middle East looking to establish credibility within the market, confidence among potential investors or creditors, and opportunities for expansion should consider the implementation of corporate governance as a key part of their strategy.

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The Impact of Corporate Governance on Investor Success

For investors, good corporate governance is vital in giving them oversight of a company's internal policies, control mechanisms, and decision making.

Learn More
images investors

How Corporate Governance Protects Family Businesses and Preserves Family Values

The family-owned business has long formed the bedrock of the Middle Eastern economy, constituting as much as 90% of all companies and contributing around 60% of GDP in the region.

Learn More
images family

How Executives Can Leverage Their Knowledge of CG For Greater Success

Executives who invest time in developing their knowledge of corporate governance can add greater value to any organization that they are a part of.

Learn More
images individuals

Corporate Governance: The True Value for Entrepreneurs

Entrepreneurs in the Middle East looking to establish credibility within the market, confidence among potential investors or creditors, and opportunities for expansion should consider the implementation of corporate governance as a key part of their strategy.

Learn More
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Take our quick Corporate Governance Quiz

Find out whether you know the basics of corporate governance.

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Take Assessment

Take The CG Self Assessment

This is a detailed CG evaluation of your organisation.

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Director Nomination

We work with organizations to nominate Qualified Directors with relevant experience. We leverage our extensive network of Qualified Directors to recruit individuals who have the specific backgrounds and skillsets needed to enhance and improve the corporate governance function of your business. Learn More
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Upcoming Trainings

We offer a range of capacity-building programs to advance understanding of corporate governance and demonstrate its value.

If you have any questions or would like to reach out to us on the programs, please email: [email protected]

The Importance of Effective Corporate Governance and a Diverse Board of Directors

Governance refers to the set of rules and practices that guide a companys board of directors in ensuring accountability, fairness and transparency in their relationship, with stakeholders. One key aspect of governance is the composition of the board, which involves bringing together individuals with skills, experiences and perspectives. It has been observed that having a board composition, combined with governance practices leads to improved decision making and overall corporate governance quality especially within the GCC region.

The board of directors serves as the driving force behind governance. Their responsibilities encompass areas such as selecting and evaluating the CEO reviewing financial decisions and ensuring the long term sustainability of the company while addressing significant risks and challenges. They are ultimately accountable to stakeholders.

Effective governance practices have consistently shown correlations with performance across sectors. This trend holds true in the Middle East well. In this article we will delve into the intricacies of board composition and its impact on governance within the GCC region - Board Composition Trends in the GCC.

The Role of Board Composition in Corporate Governance

The structure of a companys board plays a role, in governance.

An ideal composition of a board comprises a group of individuals, with varying skills, experiences and perspectives. A study conducted on 143 companies listed in the GCC region revealed that the common size of a board was seven members with an average age of 52.8 years. Interestingly, the majority of female directors are within the age group of 45-54 (62.6%) - Board Composition Trends in the GCC.

However there is still room for improvement in terms of gender diversity within boards. On average there was one woman for every four board members. Nevertheless the increasing presence of female directors indicates a trend towards greater diversity in board composition. This diversity is crucial as it promotes a range of ideas and leads to robust decision making processes. Having a range of individuals, on the board is crucial as it encourages a spectrum of ideas leading to stronger decision making processes.

The Importance of Independent Directors and Fair Compensation Independent directors, who are not involved in day to day operations offer oversight. Contribute to fair decision making processes. In the GCC region there is a correlation between board independence and remuneration. Independent directors receive compensation with a remuneration of USD 113K for board members in this region. - Board Composition Trends in the GCC.

The Role and Significance of Board Committeees

Many corporate boards establish committees to manage areas of responsibility. These committees play a role, in maintaining checks and balances within the organization while enhancing corporate governance standardsDepending on the industry additional committees such, as the Risk Committee, Digital Transformation Committee or Cybersecurity Committee may also be relevant.

The Unique Role of the Board Chairperson

The board chairperson has responsibilities leading the board setting its agenda and ensuring its functioning. They also serve as the point of contact between the board and the CEO fostering communication and fostering positive relationships.

The Impact of Effective Governance on Performance

Implementing governance practices including having an diverse board instills market confidence. This has been proven to result in improved performance and increased value for shareholders. For example a study conducted by the Hawkamah Institute for Corporate Governance discovered that companies in the United Arab Emirates with corporate governance rankings outperformed the market by 4.8% in 2018 . Likewise according to data from the International Finance Corporation Egyptian companies with corporate governance practices recorded profits that were 25% higher than their counterparts.

The Significance of Good Governance

Essentially adopting governance practices driven by a structured and diverse board can significantly enhance a companys performance. In Eastern markets where there is a growing trend, towards more independent board compositions businesses have an opportunity to leverage these practices for their advantage.