Tag Archives: Corporate Governance

My Zawya Story: Two Initial Decisions

October 26, 2014 By in Corporate Governance, Strategy Tags: ,

This post is part of the My Zawya Story series.

After the acquisition there were many decisions that had to be made by Ihsan and I, some quite contentious. Two that stand out are the new geographic location for Zawya and control of the finances of the company.

Although I am an Emirati, I founded Saffar in Bahrain, which up until that point had been the dominant financial hub in the GCC. Although Dubai had by that time taken some steps to building itself into a financial hub it was still early days and the terrorist attacks on the US on 11 September 2001 looked to be an extremely negative event for any positive developments in the region.

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Initiating Confrontation is Good Leadership

October 20, 2014 By in Management Tags: ,

A good manager learns how to manage conflict when it arises, as it invariably does in any organisation. A good leader learns how to initiate confrontation. This seems counter-intuitive to many people but that is because there is an incorrect presumption that confrontation is bad. I blame tree-hugging hippies for falsely promising a corporate utopia free from confrontation. Continue reading →

Corporate Governance Part 2: Operational Governance

October 13, 2014 By in Corporate Governance Tags: , ,

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.

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Corporate Governance in the UAE Part 1: The Board of Directors

October 13, 2014 By in Corporate Governance Tags: , ,

عربي

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.

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