- In line with UAEâ€™s new corporate governance law to be introduced in April 2010
- Grant Thornton UAE gold sponsors of 4th Annual Corporate Governance Congress in Dubai
Highlighting its commitment to best practice auditing and management practices, Grant Thornton, one of the world’s leading independently owned accounting and consulting firms, supported the Fourth Annual Corporate Governance Congress in Dubai last week. The congress, held between February 28-March 4, provided key insights into challenges and opportunities for the UAE in preparation of new corporate governance laws to be introduced next month.
As part of the four-day event, Mohamad Nassar, Director of Business Risk Services at Grant Thornton, conducted a workshop entitled â€˜Corporate Governance as a Business Life Style,â€™ where he analysed the core of corporate governance and discussed how to implement it to create a competitive business edge.
â€œThe economic structure of any country fully depends on the effectiveness and leadership capabilities of the companies within it,â€ said Nassar during the session. â€œAccordingly, the degree of effectiveness by which the companiesâ€™ boards carries out its responsibilities determines the benchmark of any countryâ€™s competitive status. Thus, corporate governance lies at the very core of an economyâ€™s competitiveness.â€
Nassar further explained that corporate governance (CG) is dependant on four pillars: Risk assessment and management, an internal control system, an ethics and fraud prevention strategy and perhaps most importantly, transparency and trust.
â€œThe biggest contradiction of CG is an environment where fraud takes place,â€ he said. â€œIf the board and management are serious to fight such an environment and build a concrete CG structure, it has to state the organisationâ€™s definition of fraud acts, citing clear examples of what constitutes fraud, conflict of interest, and further specify disciplinary actions that will ensue should fraud occur.â€
He said: â€œThe main reason behind the huge failures that happened in most of the business organisations all over the world recently is the absence of a serious, integrated and regularly monitored Risk Management process. Organisations need to hire a well-reputed external consultant to evaluate and monitor the Risk Management process and to provide suitable advice and recommendations to management, in an unhindered manner.â€
With regards to an internal control system, Nassar added: â€œFrom a CG perspective, the Board of Directors needs to set an integrated control framework to cover all business segments within the organisation. In addition, they need to continuously monitor management efforts and performance in embedding efficient and effective controls that can govern and drive functions and processes in all departments to achieve the operational and strategic objectives.â€
â€œTransparency is the right to obtain the proper, relevant and complete information, justification and data that enables individuals and the community to live and work in a healthy environment free of ambiguity and secrets and in order to be able to do business fairly and take the right decisions,â€ Nassar concluded.
The Fourth Annual Corporate Governance congress was a direct response to the UAE Governmentâ€™s announcement that the new corporate governance law in the UAE, to be unveiled later this year, will be in line with international best practice. The guidelines involve transparency and sustainability in order for UAE organisations to become globally efficient in todayâ€™s economic climate.
The upcoming regulatory enactments are expected to alter the corporate governance landscape in the region. Organisations will now be held accountable for accuracy and integrity in their business operations, and they must have effective and reliable governance and compliance procedures in place.