Publicly-listed companies in the Middle East must radically overhaul their corporate governance if they are to be taken seriously by international investors.Good practice calls for both a manageable board and a board with some independence, but a glance at the statistics for listed companies in the six-nation Gulf Co-operation Council shows just how far behind their international counterparts they lag.
The main problem is the domination of families in these companies. While it is no secret that the GCC's economic landscape is dominated by families, the extent of their presence on boards is astonishing.
New research from TNI, the Abu Dhabi-based bank, shows that 75 per cent of all businesses in the region have at least two board members from the same family. In Kuwait, a single family can "own" up to 100 per cent of a board, while in Saudi Arabia, this proportion goes down to 75 per cent. In Dubai, however, no one family holds more than 50 per cent of a company board, while in Qatar, 30 per cent of board seats can be owned by a single family.
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