A to-do list for Gulf businesses on keeping to right side of corporate governance

A to-do list for Gulf businesses on keeping to right side of corporate governance

Against the economic backdrop of a looming recession, soaring inflation and the war in Ukraine, the internal pressures on management teams to hit financial targets grows. Cast your eyes back to 2020’s list of the UAE’s high-profile corporate failures: NMC Health, Arabtec, and, of course Abraaj. There is no better way to highlight to company executives that a weak culture of corporate governance within the GCC can lead to possible financial distress. It is clear from the risk landscape, that now more than ever, companies are prone to financial distress, heightening the risk of regulatory or legal breaches. And the reputational risks associated with undue attention from regulators who continue demand tighter regulation from companies. Rising interest rates, supply chain costs, and geopolitical situations are going to put tremendous stress on companies across the region, especially those operating with low margins. This tightening of regulations is evident in the UAE. New corporate governance rules were implemented for public companies in 2021 to bring the region in line with international best practices, including promoting accountability, fairness, gender diversity and transparency. Company executives have been warned. It is not just the region’s businesses that must be well governed. The Financial Action Task