GCC BDI's 8th Board Effectiveness Review Highlights Key Governance Trends and Challenges in the GCC Region
The GCC Board Directors Institute (GCC BDI) recently unveiled its 8th Board Effectiveness Review, shedding light on the prevailing trends and insights engaging board members across the GCC. In collaboration with Heidrick & Struggles, this comprehensive report offers valuable perspectives on corporate governance.
The biennial survey, which involved 155 GCC BDI members and directors hailing from Bahrain, Kuwait, Oman, Saudi Arabia, and the UAE, covered a wide range of topics related to board effectiveness and challenges. Notably, it reflects the transformative journey that GCC boards are currently undertaking in the aftermath of the pandemic.
One of the key takeaways from the review is the heightened concern among directors regarding managing stakeholder expectations. A substantial 45 percent of respondents expressed their belief that this aspect will exert a significant impact on companies over the next three years, marking a notable 17-percentage point increase from the 2021 report.
The report underscores a growing recognition of the long-term value associated with robust sustainability and environmental, social, and governance (ESG) strategies. An impressive 89 percent of respondents emphasized that pursuing sustainability initiatives would enable boards to create enduring value for their organizations.
The survey also highlighted the importance of staying abreast of regulatory changes, with directors expressing their concerns about the evolving regulatory landscape. However, 44 percent of respondents felt that there was a balanced approach to regulation and autonomy, while only 18 percent believed that they were subjected to excessive regulatory oversight.
The report's insights provide valuable guidance for GCC boards as they navigate the challenges and opportunities that lie ahead in today's rapidly evolving business environment including
Diverse Representation: Boards should ensure that their members represent a diverse range of ages, nationalities, skills, and experiences.
Professional Board Secretary: Appointing a professional board secretary can enhance governance processes.
Long-Term Strategy: Boards should adopt a long-term perspective on strategy development.
ESG Integration: Embedding ESG principles in their organizations through tracking and reporting.
Performance Evaluation: Regularly assess and evaluate board performance every three years.
John Gollifer, the newly appointed Chief Executive Officer of GCC BDI, emphasized the significance of sharing insights within the business community to drive best practices forward. He highlighted how recent disruptions and challenges have accelerated operational changes and fostered stronger collaboration between directors and management, ultimately contributing to a board's success.