KUWAIT: The Capital Market Authority (CMA) held a symposium on 'Corporate Governance Sound Practices: A Case for Financial Markets Stability' yesterday at the Sheraton Hotel. Speakers from different countries participated in this symposium. Saleh Al-Falah, President of the Board of Commissioners, Capital Markets Authority, said progress has been made in efforts to privatize the Kuwait Stock Exchange (KSE) and a new company has already been set up that will own the KSE. "The investors in charge of the privatization process of KSE have done some studies," he noted during the opening of the symposium. "The Financial Consultant HSBC Bank is cooperating with both the KSE and the CMA to finalize the work plan for the new company and to set aside a certain capital amount to ensure its long term success at par with markets that demand higher qualification standards," added Al-Falah.
The process of further improving KSE was still on. "We are doing some improvements to increase the performance of the KSE. We will also bring in the necessary technology in departments even as the CMA works to secure the rights of the investors and dealers at the KSE during the privatization," he further said. On her part, Imelda Dunlop, Executive Director, Pearl Initiative-UAE, explained the role of corporate governance in the family firms. "It is very important to be getting the message across from the perspective of both the regulators and the company.
It is also important to know how it is done in other countries It is here that the Pearl Initiative comes in," she told the Kuwait Times. "We work across the GCC and are a non-profit organization. Our audience is business. It is all about making a case for corporate governance. The progress on this front in Kuwait is definitely amazing. There are very similar trends across the GCC countries, and while it is difficult to separate one country from another, they are all making progress," she noted. "Few days ago, we launched our report which is an analysis about the state of corporate governance in the GCC, what norms are family firms adopting, why is it important for the family firms, what exactly is the situation.
There is no information available about what norms they have adopted already in the GCC," stressed Dunlop. They interviewed over 100 family firms in every GCC country and asked them questions about what corporate governance practices they have in place and how do they plan to ensure better business practices? "There is a real desire on the part of family firms to make their board of directors more dynamic, more professional, and more effective. That can be done in two ways: first is to make sure that the family members who are running the company have the right skills to do that, and complimenting that, skilled and experienced independent (non-family) directors are appointed. In this way, we can separate the company issues from family issues, and have a more mixed dynamic board," she pointed out. "The main trend we see amongst the family firms in the region is their desire to professionalize and become more internationally competitive. One of the big drivers for implementing this system in corporate governance is access to finance and capital and it is really well established that firms with better governance standards get better credit rating and access to capital at a smaller cost.
It is a very direct business benefit. What we find in family firms is that the main driver is the transition passing on to the next generation and the desire to make sure that what's being passed on to the next generation of the family is a well governed, well structured and well organized firm that can then survive, prosper and grow, and be internationally competitive across the next generation and generations beyond," stated Dunlop. "The whole idea is help family firms to find the benefits of the high standards and to see what other family firms are doing and implementing in the region. They have to do something proactive to ensure that survives across generations," she concluded.
© Kuwait Times 2013
