impaQta’s announcement comes amid growing concerns that overly secretive organizational processes hamper foreign direct investment in the region.
Aiman Said, Managing Director and co-founder of impaQta, stated,
“Corporate governance is a multi-faceted subject, and involves successfully forming and managing transparent relationships with organizational stakeholders. The key tenet of corporate governance is accountability to stakeholders for decisions, and clarity of procedures and results. Global uncertainty about firm practices has been exacerbated by accounting standards and perceived lack of transparency, and there is increasing investor pressure on firms to clean up their acts in reporting results and complying with best practices while keeping stakeholders interests at the fore.”
A recent McKinsey and Company report suggests that effective corporate governance can add 30 per cent to the market value of a firm in emerging markets, and even implementing a few basic principles can add up to 12 percent to a firm’s share value. Corporate governance deals with accountability, fiduciary duty and mechanisms of auditing and control. Key principles of corporate governance insist that organizations comply with good conduct codes and work towards stakeholder interests. Corporate governance also focuses on economic efficiency and adherence to best practice guidelines and national institutional frameworks.
“Corporate governing principles are one of the first elements a canny investor looks for in a target firm. Investors need to be assured of the firm’s commitments to its stakeholders, as well as its compliance with ethics and best practices. While some business owners are of the opinion that corporate governance is not important for firms operating in emerging markets, I would argue the exact opposite. The closed family business structure and higher risks inherent to emergent markets actually makes corporate governance more important as a show of good faith to the shareholder or investor,” said Aiman.
“Till date, corporate governance is only practiced by a handful of firms in the region. A large number of organizations resist any attempts at what they consider outside interference. But lack of transparency can negatively impact bottom lines by making it difficult to acquire capital for future expansion. Ultimately, a dearth of corporate governance principles works against the government’s drive to attract foreign capital to the region,” he explained.
impaQta is a leading knowledge aggregation and integration company in the Middle East, with core competencies including training, facilitation and management consultancy with emphasis on knowledge definition, acquisition and utilization.
“Companies in the Middle East need to be aware that corporate governance, by ensuring the commitment and accountability of the management and board of directors in the pursuit of company objectives, raises the book price of an organization. Sound corporate governance practices are becoming integral in maintaining investor confidence by protecting their interests, and impaQta is committed to working with its partners in developing corporate governance guidelines as the next step in social responsibility and economic development,” Aiman concluded.
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