The study of banks and listed companies reveals weaknesses and recommends changes to help companies achieve best practices and improve performance and returns.

To receive a FREE copy of the report, email info@mudara.org

The International Finance Corporation, jointly with Hawkamah, has issued the most comprehensive study of corporate governance in the Middle East and North Africa (MENA).

The study reveals that a majority of participating banks and listed companies are unable to properly define corporate governance. What's more, only 3% follow good practice and none follow best practice, while 56% of boards have no more than one independent director, a situation that makes proper oversight difficult, according to the study.

The report outlines several ways that good corporate governance can benefit companies, including achieving a higher long-term return on investment, better protection of shareholder rights and greater access to capital at a lower cost.

Among the most significant findings and recommendations:

• The 42.3% of companies that still combine the function of chairman and CEO should separate these roles to comply with best practice.

• According to the study, only 25% of banks and listed firms provide information on their dividend policies online, and just 12% have online information on key executives remuneration.

• Most respondents view disclosure from a compliance point of view, rather than see it as an effective tool for managing stakeholder relations and adding value to their business.

• Only 50% of listed family-owned enterprises (FOEs) had adopted a family constitution, while only 25% had family councils in place. Three-quarters of FOEs said their boards are composed of a majority of family members.

To receive a FREE copy of the Corporate Governance Survey, email info@mudara.org .