Board evaluation in GCC 'must be mandatory'
Manama, April 22, 2013
Performance evaluation of boards of directors in the GCC region ought to be made mandatory, according to the GCC Board Directors Institute (BDI)'s third report on board practices.
Some of the other recommendations that would improve the set-up and operation of boards are adopting global best practices and benchmarking board performance against international peers, providing more training for board members and encouraging membership of industry associations and replacing ineffective board members and rotating board members more frequently, said a report in the Gulf Daily News, our sister publication.
Titled 'Challenging Board Effectiveness', the report also calls for the appointment of more international and independent board members, defining better the role of the chairman and encouraging board members to prepare for meetings by continuing to provide materials that are clear and easily digestible.
Seeking greater board engagement in devising company strategies and visions, devoting more board time to talent management and establish clear processes for retaining senior management and succession planning for critical positions and developing robust follow-up procedures to ensure board decisions are implemented, are the other key recommendations.
"In recent years in the Gulf region there has been an 'active upgrading' of boards of directors as a result of which directors are more conscious of the skills that should be included on a board," said BDI governor and Investcorp Gulf Business president Mohammed Al Shroogi.
"This report provides a perspective for board members but also investors, advisors and governments on the current state of board effectiveness in the region as well as highlights potential areas for improvements," he said.
The report is based on analysis of the top 200 publicly traded companies in the region, along with interviews with senior directors and chairmen from across the GCC.
The BDI is a non-profit organisation focused on promoting professional directorship and raising the level of board effectiveness in the region. Bahrain Bourse listed Investcorp is one of BDI's founding partners. – TradeArabia News Service