The UAE needs to have a corporate governance framework to cover issues related to financial activities in the country, financial experts say.
According to Judge Mervin King, former chairman of the King Committee on Corporate Governance in South Africa, the UAE is currently transforming itself from being a resource-based economy to become a financial service economy.
What is happening with capital flows in the UAE is that capital is flowing out at the moment and they have not yet started flowing in. There has to be a corporate governance framework that instills confidence in the local market so that investors stop sending money out and start buying equities in local companies and then start to get foreign capital in, he explained.
The market is just starting with initial public offerings (IPOs). The UAE needs to attract more foreign capital to make them successful. Therefore, there should be a corporate governance framework that when big investors come to the country they know how the company is going to be governed, he suggested.
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