Mixing it in the boardroom in the Gulf

The Life: As Gulf companies beef up corporate oversight a new company aims to match independent directors with suitable businesses.

John Martin St Valery, a partner at NxD Global, says Gulf companies are warming up to the concept of independent directors.

As Gulf companies beef up corporate oversight, John Martin St Valery is hoping his new business can play a role by putting more independent directors on regional boards.

NxD Global, as the venture is called, matches people who want to be independent company directors with companies that need them. It is the first company of its type in the region.

"The global financial crisis highlighted the inextricable link between independence on the board and good corporate governance," Mr St Valerysays. "I think over the last year or so it's become quite apparent that the timing is right coming out of the global financial crisis to look at transparency on the board, modernising the boardroom in effect to make this region more appealing to outside investors."

Improving corporate governance has become a priority for governments as they try to improve the UAE's business climate and guide the private sector's development. Several non-profit organisations such as Hawkamah, a corporate governance institute, and IOD Mudara, the institute of directors in Dubai, have sprung up to train directors and raise awareness about the importance of good governance.

Company boards of directors are crucial to the performance of companies because they set strategic goals and monitor management. Employing directors who have no business ties with companies is standard practice in developed markets, and some countries mandate minimum independent board representation for listed and other regulated companies.

No such rules exist in the Gulf, but Mr St Valery says many companies are beginning to eschew the age-old practice of populating their boards exclusively with executives and major shareholders.

The logic is partly that better-run boards are necessary for companies to compete in a tougher post-financial-crisis world. But Mr St Valery says companies are also looking for independent directors as a way to bring specialist expertise and fresh perspectives into the boardroom.

"It's very prudent to have independence even on a small executive board in certain areas such as legal, financial or for future mergers and acquisition [advice] where that would be quite an expensive resource to bring in as a full employee," he said.

"To bring in a non-executive director who comes in once a quarter or even twice a year to keep the business on track, I think there's real benefit for this region."

While NxD is still in its infancy, Mr St Valery and his business partner Julie Irving plan to make a push this summer. The service is already up and running, with several director candidates and a smattering of companies signed up.

NxD makes money by charging annual fees to individuals and businesses who sign up to the service, and also takes a commission for linking directors with companies.

"It's an invitation service at the moment," Mr St Valery says. "It's more of a club for interested and qualified non-executive directors and companies recognising the need."