Season of change in corporate governance

The last quarter of 2011 and is often a time for reflection amongst businessmen and businesswomen, a time to look back over the previous quarters and evaluate progress to date and consider what the future year holds.

Although this is a busy time, since individual and business performance evaluations are starting to take place and the budgets for next year are being finalised, many directors find that this is a good time to reflect upon the strategic opportunities that the company can exploit and to consider how the firm should manage the threats that exist within the business environment.

Hopefully this article may stimulate reflections concerning strategic management issues.

The Arab firestorms

This time last year few (if any) commentators were predicting the level of unrest that has occurred across the region. It has long been known many authoritarian regimes are found in the Middle East and North Africa region, but the speed, levels, spread of contagion and impact on neighbouring states concerning demands for democracy and improvements in civil society have surprised many commentators.

In many cases it is thought that the long-term impact in this region will be on greater transparency and disclosure in all areas of civil and business activity. Tunisia held its elections last weekend and hopefully the transition to democracy will continue to develop in that country in an orderly manner. In other countries the transitions are likely to be much less easy to manage.

Responsible investors and integrated reporting

In addition to the capitalism in crisis protests there are important trends taking place across the world in the area of "integrated reporting".

The demand for integrated reporting is coming from responsible investors who are demanding greater disclosure levels in the areas of environment, social and governance reporting.

I foresee many companies in this region improving their disclosure levels in these areas in the coming year.

Reminder

The judgment that was upheld by the Appeal Courts last week involving directors from Dubai Islamic Bank being fined, imprisoned for 10 years and subsequently being deported has been a timely reminder that directors must comply with national regulations and laws.

Chris Pierce is CEO of Global Governance Services Ltd based in London. He has recently completed a book on ‘Corporate Governance in the Gulf'.