Corporate Governance Advisory
People often think that corporate governance is only for large family businesses or listed companies. The truth is, corporate governance can safeguard shareholder value and ensure there are sufficient internal controls and processes to provide sustainable growth for any business.
A corporate governance framework is a mechanism to “ensure the strategic guidance of the Company, the effective monitoring of management by the board, and the board’s accountability to the company and the shareholders”. OECD Principles of Corporate Governance (2004)
Governance is about a journey of excellence over the lifecycle of a business. During a business’s lifecycle there will surely be stumbles, falls and mistakes. The question is, will lessons be learnt or will the same mistakes and failures be repeated? Like any journey we need to know where we are, where we want to get to and by which means. We also have to take in to consideration how we can navigate and take the right route to ensure the successful arrival at the destination at the correct time. Corporate governance is a planned journey and good governance is developed and doesn’t just happen by accident.
Organisations require a bespoke governance framework to guide employees on the correct internal controls, policies and procedures to follow. The governance framework of an entity or group will differ based on the type of company and where they are regulated. In the United Arab Emirates a business can set up on-shore under the Department of Economic Development or in one of the many free zones across the seven Emirates. Many businesses set up in a free zone as they allow 100% foreign ownership. All companies, whether established on-shore or in a free zone, are required to adhere to the relevant laws and regulations, together with provisions in their constitution and policies/procedures. Public and private joint stock companies are required to an established Board of directors and mandated committees together with a Company Secretary. Other companies such as limited liability companies (LLC) have a general manager and may opt to establish a board of managers/directors. For free zone companies, board requirements and the appointment of a Board/Company Secretary will depend on the regulations of each free zone.
Wherever you are on the corporate governance journey our team of governance professionals can assess, review, advise or work with you to plan the next phase of your governance implementation.