1 iEstablish ia iclear iand idocumented isegregation ibetween

1. iEstablish ia iclear iand idocumented isegregation ibetween ithe iroles iand iresponsibilities iof ishareholders, ithe iBoard iof iDirectors i(Board) iand imanagement: iThe ilarge imajority iof icorporations iin ithe iregion iare ifamily ibusinesses ithat irepresent ia isubstantial ipart iof ithe iprivate isector. iWithin ithis isegment, ithe iroles iand irelationships ibetween ifamily imembers, ithe iBoard iand iits imembers, ishareholders iand ithe iExecutive iare iundefined, iundocumented, ioverlapping, iconflicting iand icomplex. iOperating iin ian ioral iand iconsensus-based iculture, imany ido inot irealise ithe ineed ito icreate iand idocument ipolicies iand iprocedures ito iimprove ioperational iefficiencies iand ireduce ithe iincidence iof iblunders.

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2. iClarify ithe irole iof ithe iChairman: iThe iinterpretation iof ithe ititle i”Chairman” iin iany ireasonable icorporate igovernance icode imeans ithe iIndependent iNon-Executive iDirector iwho ichairs ithe iBoard. i”Chairman” igenerally imeans ithe iprinciple ishareholder iand ifounder, iwho istill iowns ithe ibulk iof ithe ienterprise iand istill ipossesses ithe imajority, iif inot iall, iof ithe ipowers itypically iassociated iwith ithe iposition iof ithe iChief iExecutive.

iThe ititle i”Chairman” iis ialso ieasily iinterchangeable iwith iother ititles isuch ias iGeneral iManager, iManaging iDirector, iand ieven iPresident.

3. iImplement ian iAuthority iMatrix: iA iclear iAuthority iMatrix imust iallow ifor ithe idelegation iof iauthorities iwithin ispecified ilimits iand icontrols, iwhilst iensuring iclear iaccountability.

4. iProvide ifurther ieducation ifor iyour iBoard imembers: iThere iare inow iseveral iinstitutions iand iorganisations ioffering iBoard iLeadership iand iNon-Executive iDirector icourses iin ithe iregion. iSome ioffer iprofessional icertification ifor iBoard imembers iwhilst iassisting iin ideveloping iskills iand ikeeping iindividuals iappraised iof ithe imost iup-to-date icorporate igovernance ipractices iand iregulatory iframeworks iwithin ithe icorporation’s ihome ijurisdiction.

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5. iRespect ithe icultural ichallenges ithat ilie iahead: iTry iconvincing ithe ijoint iChairman i/ iChief iExecutive iof ithe i”typical” icorporation ithat, iwhen ithe iaccounts iare iaudited ifor ithe ifirst itime, ithe iorganisation imay ineed ito ideclare ihis iremuneration! iWhilst iI iam inot isuggesting ithat ithey ihave ianything ito ihide iI iam ihighlighting ithe iuphill istruggle iand icultural ihurdles ithat ithese icorporations iand ibusinesses iare iabout ito iembark iupon.

6. iAttract iexperienced iand iIndependent iNon-Executive iDirectors ionto ithe iBoard: iThe ichallenge iof iselecting ia icandidate iis inot ian ieasy ione. iThe icandidate imust ihave iindustry iexperience ibut imust ialso ibe iindependent. iThey iought ito iunderstand icorporate igovernance ibut ishould irespect ithe iMiddle iEastern icultural ienvironment. iAs ia inew iBoard imember iif ithey ipush itoo ihard, ithe iimplementation iof icorporate igovernance iwill ibackfire ibut iif ithey idon’t ipush iat iall, ithe ievolution iwill istall. iBut imost iimportantly, ithe icandidate ineeds ito ibe itrusted iby ithe ivarious iparties iand istakeholders iand iwill ineed ia ilarge idiplomatic iskill.

7. iEstablish ian iAudit iand iRisk iCommittee iand irecognise ithat ithe igovernance iof irisk iis ia iBoard iresponsibility: iDue ito ithe inature iof ithe iactivities iundertaken iby ithis icommittee, iit’s isuggested ithat ithe iindividuals ion ithis icommittee ihave ia istrong iunderstanding iof iinternal iaudit, iexternal iaudit, iaccounting iprinciples, ifinancial ireporting iand irisk imanagement iexpertise. iIt iis igenerally irecommended ithat ithe icommittee iis icomprised iof ia imajority iof iIndependent iNon-Executive iDirectors iwho imust ioversee ithe iprinciple ielements iof i(a) ifinancial istatements; i(b) iinternal icontrols; i(c) irisk imanagement; i(d) iexternal iaudits; i(e) iinternal iaudit iand iothers. iEstablishing ia isound isystem iof irisk ioversight, imanagement iand ian ieffective iinternal icontrol ienvironment iis ianother ifundamental irole iof ithe iBoard. iRisk iManagement isupports ibetter idecision imaking ibecause iit idevelops ia ideeper iinsight iinto ithe irisk-reward itrade-offs ithat iall iorganisations imust icontinuously ievaluate.

8. iIf iit’s ia ifamily ibusiness ithen iestablish ia ifamily iconstitution: iA ifamily iconstitution ishould ioutline ithe iprinciples iand ipolicies ithat ithe ifamily iand iits ibusiness isubscribe ito iand imust idescribe ithe iroles iand ifunction iof iall iparties iincluding ithe ishareholders, iBoard, imanagement iand iemployees. iBy idefining ithe imanner iby iwhich ifamily imembers imay ibecome iinvolved iin ithe ibusiness iwill icontribute ito ithe iavoidance iof imany imisunderstandings.

9. iRealise ithat ibenefits iof icorporate igovernance: iGood icorporate igovernance ibears isome ikey ibenefits inamely i(a) iit ileads ito ibetter istrategic idecision imaking; i(b) iit ihelps iin igaining iaccess ito icheaper icredit iand icapital; i(c) iit iprovides ibetter ivaluation iof iyour ienterprise; i(d) iit idrives ia istronger iinternal irisk imanagement iand icontrol iframework; iand ifinally i(e) iit ihelps ito imeet iany iregulatory icompliance irequirements.