For some listed companies in the UAE, corporate governance is merely a matter of “ticking boxes” to meet the new rules issued in April.
But for others, complying with the Securities and Commodities Authority’s (SCA) updated resolution on how companies should be run is about more than just avoiding the potential penalties for breaches, which include a fine or referral to public prosecution.
For them, good corporate governance ticks the boxes when it comes to boosting business performance, too.
Corporate governance, the system by which companies are directed and controlled, includes principles such as accountability and transparency, the need for independent non-executive directors, guidelines on audit committees, as well as companies’ remuneration policies.
Although intended to encompass all stakeholders in a business, corporate governance is sometimes seen as being geared primarily towards shareholders, providing detailed information and reassurances about the way companies are run.
But experts point to an increasing awareness in the UAE – in the private and public sectors – that good corporate governance can bring about a boost in productivity, as well as investment.
Ashraf Gamal El Din, the chief executive of Hawkamah, the Institute for Corporate Governance in Dubai, says that the practice is not just about meeting legal obligations.
“Some organisations will take it as a box-ticking exercise,” he said. “So whenever we go to banks and companies we talk about issues of corporate governance, and the value added to the company.”
Hawkamah was set up in 2006, to bridge what was seen as a gap in corporate governance in the region.
Mr Ashraf said there is growing awareness in the UAE that the principles of corporate governance are generally good for business. Such principles include having a strong board that uses key performance indicators to assess the management’s performance, as well as good engagement with employees and having a clear compensation system to keep them motivated.
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Governance in focus
■ Management: Know your requirements before you set up a board
■ AGMs: When annual meetings become forums for confrontation
■ Virtual AGMs: When the AGM is everything but personal
■ Editor's letter: An issue important to our well-being
■ History: Be good, because investors are watching more closely
■ Poll: Corporate governance in the UAE - have your say
■ Analysis: A good board brings right mix of knowledge and culture
■ Gender equality: 30% Club GCC chapter to boost women numbers on company boards
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“There is considerable evidence that good corporate governance positively affects operational efficiency and profitability,” Mr Ashraf said.
“The awareness is really increasing here in the UAE … And that’s why you have more and more companies adhering, or trying to improve their corporate governance practices.”
He pointed to Abu Dhabi Commercial Bank (ADCB), which in 2009 partnered with Hawkamah to advance corporate governance reform in the region. The bank adopted four key principles in its own approach to corporate governance, which dates back to 2007, namely the clear division of responsibilities, accountability in relationships between stakeholders, transparency and fairness.
ADCB did a study “in which it really measured the impact of the corporate governance restructuring on various issues … on the bottom line, on their reputation,” Mr Ashraf said.
Fause Ersheid, a senior corporate governance analyst and researcher at the Abu Dhabi Centre for Corporate Governance, said that while all listed companies in the UAE comply to the minimum standards, there is a big variation in those that go above and beyond the requirements of the SCA guidelines.
“Many companies just go with what’s required. And that’s what I call ticking the box. If you want one, two and three you’re going to get one, two and three only,” he said. “Are companies failing to tell everything to their shareholders? I doubt it. They are telling exactly what the law requires them to tell.”
The SCA’s resolution on corporate governance applies only to companies listed on the Dubai Financial Market and Abu Dhabi Securities Exchange, with the Nasdaq Dubai having a separate code similar to that in the UK, which is applied on a “comply or explain” – rather than fully mandatory – basis.
The SCA resolution does not apply to foreign companies listed on the two UAE markets, while some parts of it do not apply to banks and financial services companies subject to Central Bank supervision.
Despite that there is a growing awareness of the value of governance principles in other parts of the economy, rather than just among the publicly listed entities to which the codes apply, Mr Ashraf said.
“[Such codes] also serve as useful benchmarks for both state and family-owned businesses, which tend to dominate the economies of the GCC,” he said.
“Even on the government level there is a realisation of the importance of corporate governance, in the area of stakeholder rights and improving service level.”
The history of corporate governance globally also points to how important the principles are for the efficient and responsible running of businesses. And that is partly because of the circumstances in which many regulations were drawn up: the United States Sarbanes-Oxley Act of 2002, for example, was enacted as a reaction to scandals at companies such as Enron and WorldCom.
But could enhanced corporate governance have any damaging impact on a company?
One issue here is how to strike a balance between transparency and disclosing too much about a company’s business model, or making forward-looking statements that could come back and haunt you.
The annual Grant Thornton Corporate Governance Review measures what UK-listed firms say in their annual reports, including their compliance to the UK code and the quality of commentary they make about their businesses.
The latest edition of the review, published in December, found that 73 per cent of the firms studied gave good and detailed insights into their business models, compared with 61 per cent in 2014. Around 41 per cent gave “high quality” forward-looking statements.
Simon Lowe, the chairman of the Grant Thornton Governance Institute in London, and author of the report, described some information disclosed by UK-listed companies as “commercially sensitive”.
“The emphasis of the new strategic reporting requirements is to actually explain what your business model is – how you make the money – so people understand it, and then to talk about your strategy,” Mr Lowe said, in reference to the UK market. “[But that’s] not to say that in the UK directors are at all comfortable about giving away trade secrets.”
The issues around providing forward-looking statements are particularly relevant when it comes to the “pretty litigious” US market where dual listings are concerned, Mr Lowe said.
And so while UAE companies are urged to not view corporate governance as mere compliance because it is good for business, there is another issue to beware of: ticking one too many boxes.
business@thenational.ae
MEYDAN RESULTS
6.30pm Baniyas (PA) Group 2 Dh125,000 (Dirt) 1,400m
Winner ES Ajeeb, Sam Hitchcock (jockey), Ibrahim Aseel (trainer).
7.05pm Maiden (TB) Dh165,000 (D) 1,200m
Winner Galaxy Road, Antonio Fresu, Musabah Al Muhairi.
7.40pm Maiden (TB) Dh165,000 (D) 1,400m
Winner Al Modayar, Fernando Jara, Ali Rashid Al Raihe.
8.15pm Handicap (TB) Dh170,000 (D) 1,900m
Winner Gundogdu, Xavier Ziani, Salem bin Ghadayer.
8.50pm Rated Conditions (TB) Dh240,000 (D) 1,600m
Winner George Villiers, Tadhg O’Shea, Satish Seemar.
9.25pm Handicap (TB) Dh175,000 (D)1,200m
Winner Lady Parma, Connor Beasley, Satish Seemar
10pm Handicap (TB) Dh165,000 (D) 1,400m
Winner Zaajer, Fernando Jara, Ali Rashid Al Raihe
Killing of Qassem Suleimani
SPECS
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
RECORD BREAKER
Youngest debutant for Barcelona: 15 years and 290 days v Real Betis
Youngest La Liga starter in the 21st century: 16 years and 38 days v Cadiz
Youngest player to register an assist in La Liga in the 21st century: 16 years and 45 days v Villarreal
Youngest debutant for Spain: 16 years and 57 days v Georgia
Youngest goalscorer for Spain: 16 years and 57 days
Youngest player to score in a Euro qualifier: 16 years and 57 days
The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
The Specs
Engine: 1.6-litre 4-cylinder petrol
Power: 118hp
Torque: 149Nm
Transmission: Six-speed automatic
Price: From Dh61,500
On sale: Now
Batti Gul Meter Chalu
Producers: KRTI Productions, T-Series
Director: Sree Narayan Singh
Cast: Shahid Kapoor, Shraddha Kapoor, Divyenndu Sharma, Yami Gautam
Rating: 2/5
If you go:
The flights: Etihad, Emirates, British Airways and Virgin all fly from the UAE to London from Dh2,700 return, including taxes
The tours: The Tour for Muggles usually runs several times a day, lasts about two-and-a-half hours and costs £14 (Dh67)
Harry Potter and the Cursed Child is on now at the Palace Theatre. Tickets need booking significantly in advance
Entrance to the Harry Potter exhibition at the House of MinaLima is free
The hotel: The grand, 1909-built Strand Palace Hotel is in a handy location near the Theatre District and several of the key Harry Potter filming and inspiration sites. The family rooms are spacious, with sofa beds that can accommodate children, and wooden shutters that keep out the light at night. Rooms cost from £170 (Dh808).
Maestro
Director: Bradley Cooper
Starring: Bradley Cooper, Carey Mulligan, Maya Hawke
Rating: 3/5
UAE currency: the story behind the money in your pockets
COMPANY PROFILE
Name: Haltia.ai
Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends
COMPANY PROFILE
Company name: Revibe
Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
Investors: Flat6Labs, Resonance and various others
Apple Mac through the years
1984 - Apple unveiled the Macintosh on January 24
1985 - Steve Jobs departed from Apple and established NeXT
1986 - Apple introduced the Macintosh Plus, featuring enhanced memory
1987 - Apple launched the Macintosh II, equipped with colour capabilities
1989 - The widely acclaimed Macintosh SE/30 made its debut
1994 - Apple presented the Power Macintosh
1996 - The Macintosh System Software OS underwent a rebranding as Mac OS
2001 - Apple introduced Mac OS X, marrying Unix stability with a user-friendly interface
2006 - Apple adopted Intel processors in MacBook Pro laptops
2008 - Apple introduced the MacBook Air, a lightweight laptop
2012 - Apple launched the MacBook Pro with a retina display
2016 - The Mac operating system underwent rebranding as macOS
2020 - Apple introduced the M1 chip for Macs, combining high performance and energy efficiency
2022 - The M2 chip was announced
2023 -The M3 line-up of chip was announced to improve performance and add new capabilities for Mac.
The Crown season 5
Stars: Imelda Staunton, Jonathan Pryce, Lesley Manville, Jonny Lee Miller, Dominic West, Elizabeth Debicki, Salim Daw and Khalid Abdalla
Written by: Peter Morgan
Rating: 4/5 stars
BUNDESLIGA FIXTURES
Saturday (UAE kick-off times)
Cologne v Union Berlin (5.30pm)
Fortuna Dusseldorf v Borussia Dortmund (5.30pm)
Hertha Berlin v Eintracht Frankfurt (5.30pm)
Paderborn v Werder Bremen (5.30pm)
Wolfsburg v Freiburg (5.30pm)
Bayern Munich v Borussia Monchengladbach (8.30pm)
Sunday
Mainz v Augsburg (5.30pm)
Schalke v Bayer Leverkusen (8pm)
More from Neighbourhood Watch:
Company profile
Name: WallyGPT
Started: 2014
Founders: Saeid and Sami Hejazi
Based: Dubai
Sector: FinTech
Investment raised: $7.1 million
Number of staff: 20
Investment stage: Pre-seed round
Children who witnessed blood bath want to help others
Aged just 11, Khulood Al Najjar’s daughter, Nora, bravely attempted to fight off Philip Spence. Her finger was injured when she put her hand in between the claw hammer and her mother’s head.
As a vital witness, she was forced to relive the ordeal by police who needed to identify the attacker and ensure he was found guilty.
Now aged 16, Nora has decided she wants to dedicate her career to helping other victims of crime.
“It was very horrible for her. She saw her mum, dying, just next to her eyes. But now she just wants to go forward,” said Khulood, speaking about how her eldest daughter was dealing with the trauma of the incident five years ago. “She is saying, 'mama, I want to be a lawyer, I want to help people achieve justice'.”
Khulood’s youngest daughter, Fatima, was seven at the time of the attack and attempted to help paramedics responding to the incident.
“Now she wants to be a maxillofacial doctor,” Khulood said. “She said to me ‘it is because a maxillofacial doctor returned your face, mama’. Now she wants to help people see themselves in the mirror again.”
Khulood’s son, Saeed, was nine in 2014 and slept through the attack. While he did not witness the trauma, this made it more difficult for him to understand what had happened. He has ambitions to become an engineer.
Visit Abu Dhabi culinary team's top Emirati restaurants in Abu Dhabi
Yadoo’s House Restaurant+& Cafe
For the karak and Yoodo's house platter with includes eggs, balaleet, khamir and chebab bread.
Golden Dallah
For the cappuccino, luqaimat and aseeda.
Al Mrzab Restaurant
For the shrimp murabian and Kuwaiti options including Kuwaiti machboos with kebab and spicy sauce.
Al Derwaza
For the fish hubul, regag bread, biryani and special seafood soup.
The specs: 2018 Dodge Durango SRT
Price, base / as tested: Dh259,000
Engine: 6.4-litre V8
Power: 475hp @ 6,000rpm
Torque: 640Nm @ 4,300rpm
Transmission: Eight-speed automatic
Fuel consumption, combined: 7.7L / 100km
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
MATCH RESULT
Al Jazira 3 Persepolis 2
Jazira: Mabkhout (52'), Romarinho (77'), Al Hammadi (90'+6)
Persepolis: Alipour (42'), Mensha (84')
COMPANY PROFILE
Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures
ZAYED SUSTAINABILITY PRIZE
The British in India: Three Centuries of Ambition and Experience
by David Gilmour
Allen Lane
The Book of Collateral Damage
Sinan Antoon
(Yale University Press)
INDIA'S TOP INFLUENCERS
Bhuvan Bam
Instagram followers: 16.1 million
Bhuvan Bam is a 29-year-old comedian and actor from Delhi, who started out with YouTube channel, “BB Ki Vines” in 2015, which propelled the social media star into the limelight and made him sought-after among brands.
Kusha Kapila
Instagram followers: 3.1 million
Kusha Kapila is a fashion editor and actress, who has collaborated with brands including Google. She focuses on sharing light-hearted content and insights into her life as a rising celebrity.
Diipa Khosla
Instagram followers: 1.8 million
Diipa Khosla started out as a social media manager before branching out to become one of India's biggest fashion influencers, with collaborations including MAC Cosmetics.
Komal Pandey
Instagram followers: 1.8 million
Komal Pandey is a fashion influencer who has partnered with more than 100 brands, including Olay and smartphone brand Vivo India.
Nikhil Sharma
Instagram followers: 1.4 million
Nikhil Sharma from Mumbai began his online career through vlogs about his motorcycle trips. He has become a lifestyle influencer and has created his own clothing line.
Source: Hireinfluence, various
HEY MERCEDES, WHAT CAN YOU DO FOR ME?
Mercedes-Benz's MBUX digital voice assistant, Hey Mercedes, allows users to set up commands for:
• Navigation
• Calls
• In-car climate
• Ambient lighting
• Media controls
• Driver assistance
• General inquiries such as motor data, fuel consumption and next service schedule, and even funny questions
There's also a hidden feature: pressing and holding the voice command button on the steering wheel activates the voice assistant on a connected smartphone – Siri on Apple's iOS or Google Assistant on Android – enabling a user to command the car even without Apple CarPlay or Android Auto
Herc's Adventures
Developer: Big Ape Productions
Publisher: LucasArts
Console: PlayStation 1 & 5, Sega Saturn
Rating: 4/5
Scoreline
Australia 2-1 Thailand
Australia: Juric 69', Leckie 86'
Thailand: Pokklaw 82'
The biog
Favourite food: Fish and seafood
Favourite hobby: Socialising with friends
Favourite quote: You only get out what you put in!
Favourite country to visit: Italy
Favourite film: Lock Stock and Two Smoking Barrels.
Family: We all have one!
RACE CARD
6.30pm: Handicap (Turf) US$175,000 1,000m
7.05pm: Al Bastakiya Trial Conditions (Dirt) $100,000 1,900m
7.40pm: Al Rashidiya Group 2 (T) $250,000 1,800m
8.15pm: Handicap (D) $135,000 2,000m
8.50pm: Al Fahidi Fort Group 2 (T) $250,000 1,400m
9.25pm: Handicap (T) $135,000 2,410m.
Specs
Engine: 1.5-litre turbo 4-cylinder / 2.0 turbo 4-cylinder (S3)
Power: 148bhp / 328bhp (S3)
Torque: 250Nm / 420Nm (S3)
On sale: December
Price: TBA
Fifa World Cup Qatar 2022
First match: November 20
Final 16 round: December 3 to 6
Quarter-finals: December 9 and 10
Semi-finals: December 13 and 14
Final: December 18
Zayed Sustainability Prize
'Laal Kaptaan'
Director: Navdeep Singh
Stars: Saif Ali Khan, Manav Vij, Deepak Dobriyal, Zoya Hussain
Rating: 2/5
COMPANY PROFILE
Company name: Silkhaus
Started: 2021
Founders: Aahan Bhojani and Ashmin Varma
Based: Dubai, UAE
Industry: Property technology
Funding: $7.75 million
Investors: Nuwa Capital, VentureSouq, Nordstar, Global Founders Capital, Yuj Ventures and Whiteboard Capital
No more lice
Defining head lice
Pediculus humanus capitis are tiny wingless insects that feed on blood from the human scalp. The adult head louse is up to 3mm long, has six legs, and is tan to greyish-white in colour. The female lives up to four weeks and, once mature, can lay up to 10 eggs per day. These tiny nits firmly attach to the base of the hair shaft, get incubated by body heat and hatch in eight days or so.
Identifying lice
Lice can be identified by itching or a tickling sensation of something moving within the hair. One can confirm that a person has lice by looking closely through the hair and scalp for nits, nymphs or lice. Head lice are most frequently located behind the ears and near the neckline.
Treating lice at home
Head lice must be treated as soon as they are spotted. Start by checking everyone in the family for them, then follow these steps. Remove and wash all clothing and bedding with hot water. Apply medicine according to the label instructions. If some live lice are still found eight to 12 hours after treatment, but are moving more slowly than before, do not re-treat. Comb dead and remaining live lice out of the hair using a fine-toothed comb.
After the initial treatment, check for, comb and remove nits and lice from hair every two to three days. Soak combs and brushes in hot water for 10 minutes.Vacuum the floor and furniture, particularly where the infested person sat or lay.
Courtesy Dr Vishal Rajmal Mehta, specialist paediatrics, RAK Hospital
Cinco in numbers
Dh3.7 million
The estimated cost of Victoria Swarovski’s gem-encrusted Michael Cinco wedding gown
46
The number, in kilograms, that Swarovski’s wedding gown weighed.
1,000
The hours it took to create Cinco’s vermillion petal gown, as seen in his atelier [note, is the one he’s playing with in the corner of a room]
50
How many looks Cinco has created in a new collection to celebrate Ballet Philippines’ 50th birthday
3,000
The hours needed to create the butterfly gown worn by Aishwarya Rai to the 2018 Cannes Film Festival.
1.1 million
The number of followers that Michael Cinco’s Instagram account has garnered.