Are regulatory systems for governance in the Middle East ineffective? has been saved
Are regulatory systems for governance in the Middle East ineffective?
22 October, 2014 – Among the key findings of the latest edition of Deloitte’s global “Director 360°” survey is that boards of directors are becoming more confident that the effects of the global financial crisis are behind them.
Deloitte’s Global Director 360°: Growth from all Directions survey provides the perspective of 317 boardroom directors at public and private companies across the Middle East and the globe. The survey highlights changes in key governance, regulatory, and compliance concerns that organizations around the world are facing in today’s challenging business environment.
According to the results of the Deloitte survey, social media issues and technology risks are not being given sufficient attention by Middle East organizations. Three fourths (67%) of boardroom directors do not currently discuss technology risks.
“Among the key findings of this year’s survey is that the global financial crisis weighs less heavily on directors’ minds and boards’ agendas. Based on the survey responses, it appears that boards are becoming more confident that the effects of the global financial crisis are behind them”, explains Fadi Sidani, partner in charge of Enterprise Risk Services at Deloitte Middle East.
Highlights from the survey include:
- The evolving governance landscape:
- Middle East directors surveyed cited their countries’ regulatory system for governance as ineffective. 47 % of Middle Eastern respondents indicated that they are considering a proactive shareholder engagement policy which can open and sustain a productive dialogue with investors.
- Only 22% of global respondents stated that the regulatory system is well established and responds appropriately to issues.
- Board effectiveness:
- Almost half of the pool of directors surveyed strongly agreed or agreed that their processes for evaluating board performance are sufficiently robust, an increase of 12 points over last year’s results.
- In the Middle East, not one director agreed, nor strongly agreed that the processes for evaluating board performance at their organizations are sufficiently robust.
- Social media uses and technology risk:
- Nearly two thirds (63%) of all directors surveyed indicated that the board does not use social media.
- In the Middle East, 67% of respondents indicated that the board does not discuss technology risks, second only to Russia, where 70% of respondents indicated the same finding.
- Nonfinancial reporting:
- A majority of respondents in all countries surveyed strongly agreed that the board reviews and measures organizational performance against non-financial indicators, with the exception of the Middle East, who do not measure organizational performance against non-financial indicators.
“Considering the important role that social media plays in today’s businesses, and the rising technology risks, such as cyber security, it is surprising that we are not seeing an increased number of boards in the Middle East discussing the security risks facing their companies,” concludes Sidani. “This may ultimately result in lost revenues for the firms.”
“The need for effective corporate governance in organizations has never been clearer than in the current business environment we operate in,” explains Rami Wadie, Partner, Enterprise Risk Services at Deloitte Middle East. “Deloitte’s Centre for Corporate Governance works with organizations to address these needs and manage the stringent global and regional regulations that require them to adopt corporate governance processes”, he added.
To view the whole report, click here
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About Deloitte & Touche (M.E.)
Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is the first Arab professional services firm established in the Middle East region with uninterrupted presence since 1926.
Deloitte is among the region’s leading professional services firms, providing audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with more than 3,000 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has received numerous awards in the last few years which include Best Employer in the Middle East, best consulting firm, and the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW).