Call for independent directors on company boards

Dubai: Corporations in the Middle East and beyond should comply with federal UAE laws mandating more independent directors on company boards, delegates heard at a panel discussion in Dubai.

Experts speaking at the NxD-global sponsored event agreed that it may take some time before corporations in the Middle East North Africa (Mena) region meet new laws in the UAE that legislate 30 per cent independent director representation on company boards.

"According to the UAE Corporate Governance code, enacted on April 30, 2010, listed companies on local securities markets must have a minimum of 30 per cent independent director representation and separate the role of Chairman and CEO," NxD-global said.

"However, research from Hawkamah shows a wide gap between legislation and reality with an estimated 56 per cent of listed companies in the Mena region having no more than one independent director and 42.3 per cent of companies still combining the function of Chairman and CEO."

Compliance

Those attending the discussion heard panellists express concern that there are still compliance and enforcement issues more than a year since the new laws were brought into effect in the UAE. A lack of compliance could be affecting "the potential to fast track the financial transformation of the country and improve conditions for foreign investment," the firm said.