Companies urged to be more open

Senior officials have urged private companies to improve management practices and disclosure to help boost investor and consumer confidence.

Better governance would foster more sustainable economic growth by helping companies avoid the pitfalls of future global financial crises, Aziz al Shehhi, the Director General of the Ministry of Economy, said yesterday at the Good Governance Matters conference in Dubai.

"The private sector can play a lead role in ensuring that our wealth is retained locally and reinforced with more investments from abroad," said Mr al Shehhi. "Sound management practices and transparency will inspire the private sector to confidently take on this leadership role." Better disclosure and transparency would help banks in assessing risks and improve access to capital for companies, he said. Corporate governance issues are attracting increasing attention internationally after the financial downturn as investors become more cautious about where they allocate their funds. The high-profile collapse of the US investment bank Lehman Brothers and, locally, the problems at Damas International in Dubai have raised the importance of greater corporate disclosure and transparency.

"Many countries in the Middle East have a long way to go before they can feel confident that they have established sound fundamentals for corporate governance," said Mr al Shehhi. Nonetheless, the UAE is introducing five laws to improve the business environment covering the introduction of foreign investment, competition, certificates of origin, commercial arbitration and industry affairs regulation, he said.

"In Dubai today, embracing and practising good governance is of both strategic importance and a matter of survival," said Hamad Buamim, the director general of Dubai Chamber of Commerce and Industry, which organised the conference.