Jul 24 2012
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Deloitte: Public sector governance reform imminent in Middle East
Deloitte: Accountability, and transparency a priority in state-owned enterprises in Middle East
With recent political and social developments, the upsurge of social media, tighter government budgets and new legislative regulations, there is increased demand for public sector accountability across the Middle East. Deloitte specialists have assessed the impact of the all these factors and the "Arab Spring" in the region, and suggest that reform of governance in the Middle East's public sector is imminent, with many regulatory changes to come about.
"Public skepticism, combined with unprecedented transparency, is placing everyone under scrutiny like never before. The boundaries of social responsibility are rapidly expanding, challenging individuals in authority to consider the public and its agenda," said Rami Wadie, Partner and Corporate Governance Leader Deloitte Middle East.
In light of the global financial crisis, corporate governance has been concentrated on the activity of organizations deemed 'systemically' important to the economy; advised Wadie in the Deloitte ME Point of View Spring 2012 publication. He added that relatively little discourse has been directed towards corporate governance in public sector organizations, which are found to have as much impact on society. In fact, state-owned enterprises account for nearly half of economic output in some MENA countries, studies find. The actions of government departments and public entities affect all citizens, therefore understanding how these choices and decisions are made is, a matter of significant public interest.
However, instituting corporate governance within public sector firms has recently begun to receive increased attention across the Middle East, Wadie advised. This is particularly the case when countries are attempting to curb widespread corruption within the public sector, or when they are preparing public enterprises for privatization. In either scenario, sound corporate governance measures ensure that the public gets a fair return on its national assets.
"Good institutional governance should be instilled by the development of governance systems in ministries and authorities," said Wadie. "The public sector now has the aim of focusing on enhancing the quality of public services consistent with citizen expectations, promoting compliance and conformance, with appropriate transparency and flexibility," he added.
In the Deloitte ME Point of View Spring 2012 publication, Wadie outlined the following elements which good public governance should promote:
• Accountability--being answerable for decisions and having meaningful mechanisms in place to ensure adherence to all applicable laws, regulations and standards
• Transparency/openness--having clear roles, responsibilities and procedures for making decisions and exercising power, and act with integrity
• Stewardship--enhancing the value of entrusted public assets
• Efficiency--applying the best use of resources to further the aims of the organization
• Leadership--promoting an entity-wide commitment to good governance starting from the top
Deloitte Corporate Governance professionals reaffirm that good governance within the public sector increases participation, strengthens accountability mechanisms and opens channels of communication within, and across, organizations. Many changes in this realm are expected to unfold in the coming years to compelling Arab governments to pursue public sector reform.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte's more than 195,000 professionals are committed to becoming the standard of excellence. Deloitte's professionals are unified by a collaborative culture that fosters integrity, outstanding value to markets and clients, commitment to each other, and strength from cultural diversity. They enjoy an environment of continuous learning, challenging experiences, and enriching career opportunities. Deloitte's professionals are dedicated to strengthening corporate responsibility, building public trust, and making a positive impact in their communities
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 for over 85 years. 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 over 2,500 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region (International Tax Review World Tax 2010, 2011 and 2012 Rankings) and was recognized as the 2010 Best Consulting Firm of the Year in the Complinet GCC Compliance Awards. In 2011, the firm received the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW).
© Press Release 2012
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