Corporate Governance - Quantity Versus Quality - Middle Eastern Perspective

Saleh Hussain

Description

The books deal with various issues relating to Corporate Governance "CG" from a Middle Eastern Perspective with emphasis on Quantity Versus Quality.

The books covers the following topics:
- CG Quantity Versus Quality
- CG for Government Companies
- CG for Family businesses
-Corporate Social Responsibility
-CG in Islamic Banking
-CG and Democracy
-Board Committees
-Directors compensation

The books gives ways and means to apply best practices in Corporate Governance.

Sujets

• Economics
• Business

Informations

• Publié par: eBookIt.com
• Date de parution: 28 février 2017
• Nombre de lectures: 0
• EAN13: 9781456603953
• Langue: English

Extrait

Corporate Governance
Quantity
Versus
Quality
Middle Eastern
Perspective
 
By
Saleh Hussain
November 2009
 


Copyright 2011 Saleh Hussain,
All rights reserved.
 
Published in eBook format by eBookIt.com
http://www.eBookIt.com
 
ISBN-13: 978-1-4566-0395-3
 
No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems, without permission in writing from the author. The only exception is by a reviewer, who may quote short excerpts in a review.
 


 
 
To all those who consider just business and good Governance as way of their daily life...
To my family, friends and colleagues who continue to inspire and encourage me to move forward in life..
 


Words of Thanks
The people to whom my thanks go are too many. These include all business partners, colleagues and friends who continue to inspire me to move forward in life.Speakers at conferences on Corporate Governance issues and participants in those conferences are another important group of people that my special thanks go to, as their ideas, feedback. and forward looking views are my source of enthusiasm and determination to encourage people to win through good Corporate Governance.
1 thank. my family for their unlimited support, patience and encouragement My very special thanks go to Mr. Robert Ainey, Executive Chief Officer of Bahrain Association of Banks for his invaluable contribution in editing the whole book.. I sent him one chapter after another to edit to the extent that he wrote to me to say "The author is much faster than the Editor". His suggestions for improvement in some chapters were very relevant and made remarkable improvement in their contents.
 
Author's Note
This is my fifth book. on the subject of corporate governance. The first three were in Arabic and the fourth was in English. The subject of corporate governance, on its own right, attracts the attention of many writers and researchers around the globe who publish studies and books. The subject itself evolves continuously and worldwide business developments accelerate such an evolution. I started to take an interest in the subject in 1998. In 1999, in collaboration with Henley Management College in UK, I started my first study entitled "Corporate Governance in Bahrain" which was completed in 2001. I followed that with another study also on corporate governance in Bahrain but with an emphasis on "Dynamics and Operational Process of CG".
As this book. was getting ready to go to the printing press, the state of the world amidst the financial crisis can be categorized as follows. We have seen world stock markets melt down , long-established banks and financial institutions disappearing and some rescued, nationalized and large multinational companies and organizations vanishing or being bought by investors at a fraction of their value before the start of crisis in 2008. These landslides were not limited to one economic sector but affected banking, insurance, motor industry, construction and real estate. Certainly the retail sector was not spared either. More about the crisis and its impact on the world can be found in various chapters of the book.
There were many reasons that led to this grievous situation that the world found itself in. Poor corporate governance was certainly not the only reason, but in many cases it played an important role in companies getting themselves into trouble. This book touches on the various reasons that impacted the financial markets and world economies.
This book contains a number of chapters from my earlier book "Corporate Governance - Middle Eastern Perspective" duly updated to take into account developments and recent changes in the governance practices worldwide. In addition the book contains a number of new chapters on specific issues of direct relevance to CG practices.
In total the book has 10 chapters dealing with following subjects:
Chapter one deals with the common practice of corporations investing a lot of time on the quantitative requirements at the expense of qualitative requirements. Such an attitude causes corporations to lose sight of the importance of human behavior and the unsatisfied needs of stakeholders.
Chapter two details the role, responsibilities and importance of key committees of the board. The Executive, Audit, Remuneration, Nominating and Risk Management committees have extensive coverage on their formation, membership and scope of activities.
Chapter three deals with the compensation of Directors and Executive Management. It gives various views on issues relating to the total compensation and the transparency and disclosure of relevant information in annual financial reports. The current cases of excessive incentive payments, even during a severe financial crisis, are also discussed in this chapter.
Chapter four discusses extensively corporate succession plans, which is a subject that receives little attention from the boards of directors and executive management. This results in exposing the corporation to an absence of cover when a major post becomes vacant.
Chapter five covers the issue of corporate social responsibility "CSR" which attracts the attention of all stakeholders and various interest groups. The relevance of CSR and the current financial crisis is explained in detail.
Chapter Six covers corporate governance and democracy. CG flourishes better in democratically governed countries and vice versa for countries that are less open to democracy.
Chapter seven gives examples of the contents of CG codes from a number of countries such as the UK, Belgium and Pakistan. It also provides an update on the draft CG combined code of Bahrain, which is in the process of being issued.
Chapter Eight talks about corporate governance in government companies also termed "State-Owned Enterprises" - SOEs - and sheds light on the difficulties these companies face in having to comply with the remits of good governance as well as compliance with government bureaucratic requirements.
Chapter Nine examines corporate governance in family-owned businesses or "FOBs". Given the fact that over 80% of companies worldwide are owned by and run as family businesses, the importance of corporate governance cannot be over-emphasized.
Chapter Ten deals with corporate Governance and Islamic Banking. Islamic Banking has been growing at an unbelievably high rate of growth. The governance practices of Islamic banking institutions need to be strengthened and aligned to the standards of corporate governance regulations applied to all other forms of corporations. The issue is discussed in detail with an emphasis on recommendations for improvement.
I hope that the reader finds this book of use either in its entirety or as an in-depth look at specific topics in Corporate Governance, and I welcome your comments and views.
 
Saleh Hussain
November 2009
 
Corporate Governance Now More Important Than Ever
Introduction
Humanity isn't a stranger to corporate governance and so aren't human beings. Governance as a system is imbedded in the way people, families, companies and even government affairs are conducted and run. Good governance stems from simple principle of behaving within acceptable standards of ethics. These ethics have a very simple principle to follow "treat people the way you wish them to treat you". Simply put, any governance system must be built on the principles of honesty, fairness, accountability, responsibility and transparency.
These principles apply in the dealings of individuals with each other, between families and by corporations with all their stakeholders. To manifest good governance, the government must be the undisputed leader. The government sets the tone from the top by ensuring that public governance is conducted in an accountable and transparent manner.
Democratically run countries are expected to manifest and demonstrate the highest principles of good governance through their governments. However, if governments fail to discharge their responsibility in abiding by principles of good governance then hopes of other organizations doing so is questionable.
Looking closely at the stakeholders under any governance regime, we find them virtually the same for individuals, families and corporations with varying degrees as regards their size and sophistication. Any corporate governance environment is basically constituted by individuals who lead and direct any enterprise. If individuals are raised with a high degree of integrity and ethical standards, and the family business is conducted within these standards, the businesses will benefit from these qualities.
The parties responsible for the establishment and implementation of a corporate governance standard are the various stakeholders: shareholders, directors, senior management and other members of staff. Other groups of stakeholders include but are not limited to:
• Customers of all kinds
• Suppliers of various goods, commodities, raw materials and services.
• Creditors and all parties who provide credit or financial facilities to the company such as banks, financial institutions and others.
• Supervisory and regulatory authorities whether government or non-government bodies.
• Public services, interest groups and consumer protection associations.
• Distributors and sellers of the company's products.
• The company's auditors and lawyers.
Why Corporate Governance Now
The collapse of high profile international businesses, giant banks and mega­multinational companies over the past several years, the current unprecedented worldwide financial crisis, the power shift from public to private through converting state-owned enterprises to joint stock publicly­owned companies, the transfer of technology and globalization are compelling reasons for good corporate governance practices to be applied. In fact these developments have helped corporat