Say the words “corporate governance” and people immediately think of the business world. In fact, many of the problems that ail the UAE have their roots in a lack of good business practice. That fancy-sounding phrase simply means a set of rules that are designed to avoid potential conflicts of interest. There is plenty to be done to meet international standards. For instance, it is still possible, legal and acceptable for ministers serve on the boards of businesses and banks. In some even more odd cases, some individuals sit on the boards of two competing corporations.
The federal and local governments may own shares in both these companies and see no issue with having the same official representing their interest in both, but that may not be the case with regular investors. This negatively affects the reputation of the UAE. In Oman, for instance, ministers are not permitted to serve on public company boards, let alone chair two competing company boards, and individuals cannot serve on the boards of more than five listed companies.
There are also instances where regulators find themselves overseeing their own institutions. At least one member of the UAE Central Bank board of directors sits on the board of a retail bank. In some emirates the head of an airline or an airport, and of the civil aviation authority that regulates the first two, is one and the same person. Some ministers also sit on the boards of organisations that relate directly to their ministry. I wonder, in such cases, if there is a transgression, does the person punish himself?
Frankly, I have all but given up on the possibility of a serious corporate governance law, so I have decided to appeal directly to the concerned parties. Let’s see how this works. As an Emirati, whether in government or not, if you find yourself involved in two organisations that are in direct competition with each other, or where there is a potential conflict of interest, please go to your superior and recommend that they identify someone else for either of the positions.
Tell them the interest of this country demands that even a perceived lapse in governance be addressed, and that so-called Chinese Walls should be introduced to make sure that no one benefits from any position he or she occupies. Don’t put yourself in a position where someone might one day question your integrity. After all, it is in the nation’s interest to aspire to the best practices of corporate governance, even if they are not yet the law of the land.
Also, if you are given two or more positions that seem to be piling up on each other, just say “no thanks”. Keep in mind that with good governance it is as much what you have not done for the organisation that counts as what you have done. This habit of overlapping responsibilities started in the 1970s, when the UAE was a fledgling nation and talented and qualified nationals were in short supply. Now, however, with the leaps and bounds that this country has taken in higher education, we cannot claim to have the same challenge of identifying qualified people.
The consequences of poor governance in the business world also affect the overall reputation of the UAE. While I am proud that my country is fighting crime and punishing those who have taken advantage of their positions, I would also like it to lay the groundwork for adopting best practices from around the world to ensure that potential conflicts of interest are averted before they develop into headline-grabbing scandals.
I was always taught that greed and avarice are immoral and un-Emirati. Unfortunately, we have recently seen cases where some people – nationals as well as expatriates – in leading positions have used their authority to serve their own interests. The lack of good-governance legislation has had a serious negative effect on the lives of all residents of this country. Until the federal government seriously takes a look at nationwide reforms to prevent corruption and conflicts of interest, each of us must do our part in eliminating such breaches.
So if you find yourself in such a position, do the right thing; quit one of the posts, move on and let someone else take over.
This article was originally published in The National on January 17, 2010.