Corporate governance the very words are enough to send many executives running for the door, either through frustration or fear.
For businessmen with multiple demands on their time, the idea that they have to check even the smallest decision against some corporate governance tick-box, is a huge distraction from running the business.
We have seen how, in the post-Enron United States, extreme views of corporate correctness have sapped the vitality of America's big corporates and of Wall Street, to the advantage of private equity and of other financial centres, especially London.
It does not have to be like this. Corporate governance - let's call it CG for convenience - should really be a rather basic formula for the running of modern businesses: Play fair with your business partners, your shareholders and your wider stakeholders, and you will reap the commercial benefits.
It is a simple equation linking good commercial practice to long-term financial value.
Dubai has its own unique challenges. With the explosive growth of the UAE business environment in recent years, huge corporations have emerged with such speed they left CG culture behind.
There are also specific doubts as to whether American and European CG rules can be imposed on the different circumstances of a fast-growing Middle East economy.
But the imperative to "do something" about CG is just as urgent for Dubai. A recent conference of auditors heard of widespread fears of Enrontype failure if the UAE does not act on this crucial issue.
So, to return to my initial question: how to persuade over-worked executives it is in their interests to put in place the systems and checks necessary for a sound CG culture?
I believe it is essential to make the equation with longterm value, and I believe one of the corporate giants of Dubai is in the process of showing the rest how it should be done.
Dubai World, the conglomerate that owns DP World, Nakheel, Istithmar and many more of Dubai's business jew els, has been quietly but determinedly working on its own CG systems.
Its chairman, Sultan Ahmed bin Sulayem, has put his name to a process of "evolutionary reform" that will set the highest standards of international practice for his company.
The most advanced part of the Dubai World empire is DP World, the ports and free-zone business. In DPW, independent audit organisations have been set up, and independent executives and a proper system of boardroom recordkeeping set in place.
It is routine business in the CG world, but absolutely essential for DPW.
The benefits should become apparent later this year. If all goes to plan, DP World is set for a simultaneous, multi-billion-dollar IPO on Dubai's DIFX and in London. The core assets of P&O - bought by DPW last year - will be listed on markets that best reflect their history, and their future.
Some details remain to be settled: how much of the capital to float? Will it be as much as 25 per cent of the total? And what assets, other than the old P&O, will be included in the offering? With so many pearls in his portfolio, will Bin Sulayem be tempted to offer international investors a bigger part in the Dubai dream?
But when it happens, Dubai World will demonstrate the decisive argument for better corporate governance: in the long term, it makes you money.
By Frank Kane
© Emirates Today 2007
