31 Mar 2013
The GCC Board Directors Institute (BDI), a non-profit organization focused on promoting professional directorship and raising the level of board effectiveness in the region, published ‘Challenging Board Effectiveness’, its 3rd report on board practices in the Gulf.
Mr. Mohammed Al-Shroogi, President, Gulf Business, Investcorp and Governor of the BDI praised this report saying: “In recent years in the Gulf region there has been an ‘active upgrading’ of boards of directors as a result of which directors are more conscious of the skills that should be included on a board. This report provides a perspective for board members but also investors, advisors and governments on the current state of board effectiveness in the region as well as highlights potential areas for improvements.”
The report is based on analysis of the top 200 publicly traded companies in the region, along with interviews with senior directors and chairmen from across the GCC. The report recommends a number of improvements to the set-up and operations of boards in the region including the following:
1. Adopt global best practices and benchmark board performance against international peers
2. Provide more training for board members and encourage membership of industry associations
3. Replace ineffective board members and rotate board members more frequently
4. Appoint more international and independent board members
5. Define better the role of the chairman
6. Encourage board members to prepare for meetings by continuing to provide materials that are clear and easily digestible
7. Seek greater board engagement in devising company strategies and visions
8. Devote more board time to talent management and establish clear processes for retaining senior management and succession planning for critical positions
9. Make evaluation of board performance mandatory
10. Develop robust follow-up procedures to ensure board decisions are implemented
Investcorp is one of BDI’s founding partners. On supporting the BDI since its inception, Mr. Al-Shroogi commented: “Investcorp is and has always been committed to a culture of strong corporate governance. BDI’s programs and reports aimed at raising awareness on corporate governance are in line with our objectives to be transparent to our shareholders and to maximize their investment value by taking the most responsible decisions.”