Abu Dhabi, 26 Dec. 05 (WAM) -- The Central Bank of the UnitedArab Emirates (CB UAE) and the International Finance Corporation(IFC), the private sector arm of the World Bank, today signedan Advisory Agreement to support corporate governance reformsin the UAE's banking sector.

" This is the first project of its kind in the UAE in thatit aims to strengthen corporate governance in the banking sector.

We expect the project to provide a strong signal of the UAE bankingsector's commitment to further improve upon its corporate governancepractices and thus integrate into the global financial system",said Sultan bin Nasser Al Suwaidi, Governor of the Central Bankof the UAE.

When asked to describe the project, Azmat Taufique, SeniorRegional Manager for IFC, said that "the project has two components:The first sets out to conduct a high-level workshop on bank corporategovernance for the GCC and MENA, with a view towards settingthe corporate governance reform agenda in the region, the second,to develop and publish, in the form of a handbook, corporategovernance guidelines for bank directors in the UAE." The objectiveof the corporate governance guidelines for bank directors istwofold: (i) to present a single source of information for bankdirectors regarding sound corporate governance principles andbest practices relative to banks, and (ii) to provide a set ofreference standards and guidelines that banks can use to voluntarilybenchmark, assess and if need be improve their own corporategovernance frameworks. The objectives of the high-level corporategovernance workshop, in turn, are (i) to present the most recenttrends in bank corporate governance to an audience of seniorpolicy and rule-makers, banks and other stakeholders from theMENA region, (ii) to provide bank directors and managers on theone hand, and their public sector counterparts on the other handwith an opportunity to initiate a regional dialogue on corporategovernance through the sharing of experiences and best practices,and (iii) build upon the workshop to initiate a corporate governancereform agenda for GCC countries' banking sectors.

What makes this joint initiative so unique," added Saeed AlHamiz, Executive Director of Banking Supervision and ExaminationDepartment at Central Bank of the UAE, "is that the directorhandbook intends to position the UAE banking sector at par withmany developed country in this regard, particularly in lightof the recommendations set forth in the revised Basel II CapitalAccord and the Basel Committee's Guidance on Sound CorporateGovernance." Corporate governance refers to the structuresand processes for the direction and control of corporations.

Corporate governance specifies the distribution of rights andresponsibilities among the main participants in the corporation-includingshareholders, directors and managers-and spells out the rulesand procedures for making decisions on corporate affairs. Bydoing this, corporate governance provides the structure throughwhich company objectives are set, implemented and monitored.

A company committed to good corporate governance has well-definedshareholder rights, a solid control environment, high levelsof transparency and disclosure, and an empowered board of directors.

The mission of the International Finance Corporation (IFC)is to promote sustainable private sector investmentin developing countries, helping to reduce poverty and improvepeople's lives. From its founding in 1956 through FY04, IFC has committedmore than $44 billion of its own funds and arranged $23 billionin syndications for 3,143 companies in 140 developing countries.

IFC's worldwide committed portfolio as of FY04 was $17.9 billionfor its own account and $5.5 billion held for participants inloan syndications.