Dubai Declaration To Improve Corporate Governance In MENA

by Lorys Charalambous, Tax-News.com, Cyprus

30 November 2006

Policymakers, regulators and business leaders from across the Middle East and North Africa gathered at the Dubai International Financial Centre (DIFC) this week to issue the Dubai Declaration on Corporate Governance.

The declaration was agreed upon during the OECD-MENA Working Group session, which was held at the end of the Hawkamah Institute for Corporate Governance conference, as part of DIFC Week. The conference was supported by numerous regional and international organisations, notably the OECD, the International Finance Corporation, World Bank Global Corporate Governance Forum, and the Union of Arab Banks.

The Working Group, co-chaired by Rainer Geiger, Deputy Director for Financial and Enterprise Affairs of OECD and Dr Nasser Saidi, Executive Director of Hawkamah agreed upon several key initiatives, including:

  • The creation of two taskforces: one focusing on the corporate governance of banks; and a second focusing on the corporate governance of State-Owned Enterprises (SOEs).
  • The issuance of two policy briefs: one for Banks; and a second for SOEs; both to be approved by the relevant taskforces.
  • The consideration of issues relating to the corporate governance of Shari’a compliant banks and financial institutions and the importance of ensuring that regional corporate governance frameworks and standards are in line with international codes & standards, whilst at the same time remaining consistent with Shari’ah rules.
  • The preparation of a corporate governance survey of SOEs, to be developed on a consultative basis with the cooperation of key organizations and governments, and to be conducted during the course of 2007.
  • The recognition of a need to tackle issues surrounding insolvency and corporate restructuring.
  • The launch of a series of workshops and case studies that will address key issues surrounding the corporate governance of family-owned enterprises and small and medium enterprises.
  • The development of a harmonised regional CG regime using the codes of corporate governance recently drawn up by Lebanon, Saudi Arabia and others as templates.

Commenting on the landmark event, Dr Saidi said that the declarations would help lead to the creation of a comprehensive roadmap for corporate governance in the region.

"Whilst there is still a need for raising awareness and capacity building in this field, we have made significant headway in terms of taskforces, policy briefs,addressing corporate governance in Islamic banking and finance, corporate restructuring and insolvency, family-owned enterprises and small and medium enterprises," he noted.

"This will enable us to achieve our ultimate goals of encouraging investment, project finance, job creation and the development of sound financial markets," he added.

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