According to the IFC SMEs in the UAE represent 90% of total businesses. As a total percentage of GDP the estimates for rich MENA countries is estimated at approximately 51% contribution from SMEs with employment contribution at 62%. Paradoxically there is a SME credit gap in excess of USD 260 billion in MENA with only 4% of outstanding loans in the UAE awarded to SMEs. This points directly to the main challenge facing SME sector growth.
Author Archives: Sabah al-Binali
Corporate Governance Part 2: Operational Governance
The second part of the Corporate Governance series focusses on effective governance of management. There are broadly three areas: information disclosure, strategic direction and operational governance. For the board to discharge its duties in these areas it needs to take a proactive and consistent approach.
The foundation of any decision making process is information. Although it is the responsibility of management to assemble information it is imperative that the board leads the way in deciding what information is collected and how it is presented. The reasons for this are not only to avoid dishonesty but also to minimise the natural selection bias present in nearly any human endeavour. Examples of such information might include presentation of quality of revenue. Diversified, sustainable revenue generated from ordinary operations is considered high quality whereas a one time profit from the sale of a non-operating asset would be considered poor quality.
Corporate Governance in the UAE Part 1: The Board of Directors
Corporate Governance is a much used phrase, one that is bandied about usually when things go wrong and forgotten once things improve. But what does it mean? The biggest mistake is when shareholders and board members believe that corporate governance is about oversight. Although this is a crucial role, it is not the primary role. In fact, too much control and oversight kills a business. The true primary role is building the business, which includes taking and managing risk, a view that is in opposition to regional thinking. At the opposite end of too much oversight is no oversight, which unfortunately tends to be the other approach taken by board members. Physical attendance can be rare and even then mental attendance is not always guaranteed.
Introducing Sabah al-Binali's Musings
I’d like to welcome you to Sabah al-Binali’s Musings. Over the years I have learnt much from mentors, friends and colleagues. The greatest lessons nearly always involved developing a new way to look at the issues. These were the lessons that I could apply repeatedly in my career to great success. Earlier this year I decided to try and give back to the business community in my own way, by passing on what has worked for me. This took the form of a weekly column at The National, a respected newspaper with a great editorial staff that have been extremely supportive.