The Second Corporate Governance Wave in the Middle East and North Africa

Posted by R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on
Monday, February 21, 2011
1 Comment print this page Print
, , , ,
More from:

The following post comes to us from Alissa Koldertsova, Policy Analyst in the OECD’s Corporate Affairs Division, where she is primarily responsible for managing the Organization’s work on corporate governance in the Middle East and North Africa region.

In the paper, The Second Corporate Governance Wave in the Middle East and North Africa, forthcoming in the OECD Financial Market Trends, I chart the evolution of corporate governance across the Middle East and North Africa (MENA). Less than a decade ago, the understanding of corporate governance as a concept was nascent in the Middle East and North Africa. There was no Arabic term for corporate governance, which led to the confusion between corporate governance and corporate social responsibility.

Since early 2000, the importance of good corporate governance practices began to percolate into the consciousness of regional regulators and the private sector. The 2006 stock market crash and the general volatility of capital markets drew regulators’ attention to strengthening the governance of listed companies. This first corporate governance wave in the region started with the issuance of corporate governance codes and, somewhat in parallel, with the establishment of corporate governance institutes.

The article argues that the end of this decade marks the end of the first corporate governance wave in the region. Codes are starting to move from voluntary to a comply-or-explain model, and enforcement actions by regulators are no longer rare. However, the impact of these changes should not be taken for granted. Regulators’ ability to combat related-party transactions, improve transparency and disclosure, and foster effective board outcomes will determine whether the next corporate governance wave in the region will be a powerful tide or just a splash.

The full article is available for download here.

Both comments and trackbacks are currently closed.

One Comment

  1. Ben Shore
    Posted Monday, February 21, 2011 at 12:56 pm | Permalink

    Thank you for the interesting discourse on corporate governance. I had no idea that the concept of corporate governance was unheard of in the Arabic world or that there were no words for the term.

    I also find it interesting that accountability has developed in such a short period of time.

    Thanks,

    Ben