Dubai: Abu Dhabi Securities Market (ADSM) will introduce a corporate governance code and make in three stages.
Rashid Al Baloushi, acting director-general of ADSM, yesterday called for internationally recognised corporate governance codes to be implemented throughout the entire GCC region and, for the first time, announced details of ADSM's proposed corporate code for the UAE.
With the application of a code, the ADSM will propose introducing the rules in three stages.
Speaking at the fourth GCC Stock Market Summit in Dubai, Al Baloushi said well-governed companies are central to the health and stability of the GCC economies and essential for future economic growth.
"Recent research into the link between corporate governance and company performance gives us a strong case for saying that improved corporate governance standards in the GCC will improve the performance of our companies, attract foreign investors and ultimately add value to shareholders.
Al Baloushi said the challenge for GCC markets was to take the established international principles of governance and develop a set of rules and guidelines that can be adapted to thelocal regulatory and commercial environment.
"But these principles will be most effective if they are adopted across the whole region," he added.
As part of its international best practices programme and drive to encourage more foreign companies to dual-list in Abu Dhabi, ADSM has been preparing a proposed corporate governance code for the UAE.
Throughout 2005 they reviewed local UAE laws and international corporate governance principles and identified relevant 'best practice'. The draft code was then published on the website and distributed to the Authority, listed companies and other interested parties in the UAE's first ever public consultation process.
"We don't believe in imposing penalties on companies for non-compliance as it only increases the burden on shareholders," Al Baloushi said.
