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Despite the modernity of the concept of institutional governance in the economic system and in the Arab world in particular, the consequences of financial and administrative corruption and the collapses that have affected the major banks and international companies from the United States and the Great -Brittany as far as East Asia and Japan have sounded the alarm which has prompted many government and private institutions to reconsider the way its resources are managed and to strengthen the legislative framework and systems that govern them. relationships between the main parties that affect performance, achieve transparency and improve the product.
Dr Ashraf Jamal El-Din, CEO of the Institute of Governance at the Dubai Financial Center, said the basic principles of governance do not differ much whether the company is public and affiliated with the state or the government. individuals, but the differences come from an organizational point of view and through the roles that boards play and the way they operate, which are to some extent evident in private companies, but so do otherwise when the owner is the state.
He added that the mode of selection of boards of directors in the private sector goes through the main shareholders, who are those who elect the boards and then count them and activate the tasks of the executive authorities according to studied rules, which include working for achieve the company’s strategy, by activating good practices of boards of directors, the existence of an environment of control and effective practices, Adopting transparency and disclosure, preserving the rights and interests of shareholders, and s ” committing to adopt the best practices which translate in the interest of the reputation of the individuals in the first place which allow them to maintain the exercise of the activity, and thus to realize the gains and profits required for the company.
Member selection process
In the public sector, the process of selecting board members, defining tasks and evaluating is completely different. Often, SOEs have multiple social, political, economic and financial goals, and these desires can differ among themselves, thus overriding one goal. on the other, and therefore priorities will differ from time to time depending on multiple factors, and what scares us here is when those interests conflict with each other. When government pays attention to achieving societal goals, we notice a conflict with financial goals. Sometimes when the government wants to achieve financial returns for one of the projects, we notice certain societal sensitivities, which makes it difficult to focus on one goal without the other, or on achieving all of those goals under one roof. .
He added that the majority of government projects in the Arab world have a social dimension that cannot be overlooked, as the public sector aims to provide employment opportunities for the largest segment of citizens, and to provide food and drink. medicines for the needy or at least intruders. , in addition to regulating the market against the signs of monopoly of private companies on a certain product or important economic resources.
Clarity of objectives
He pointed out that the conflict of objectives structure in the public sector can be evident in the company at the first meeting of the board of directors, in its decisions it lacks freedom of opinion.
He added that the solutions lie in having a clear image with governments, and that they should take the initiative to ask themselves, why did we decide to embark on this project? What are the objectives ? Why do we want to invest in this business? And its suitability for the public and the business environment? As a result, boards will identify the main reasons and work to achieve them. Clarity of shareholding policy, legal structure and objectives of SOEs, separation of policy and law setting, improvement of accountability through transparency and disclosure, and enhancement of the role of Government audit bodies are all factors that contribute significantly to the preservation of assets, balances and the continued success and growth of companies.
On the other hand, Dr Ashraf Gamal El-Din believes that the other problem lies in the process of selecting boards of directors, which are usually appointed by politicians or ministers, which brings into play the issue of l The independence of the members, and thus their influence on the opinion of the executives and the realization of their wishes will be priority in the first place. But whatever the selection and appointment process, board members need to be sure that they will ultimately be held accountable for negligence, so I advise them to reconsider every step or decision they take as they are the only ones. ultimately responsible, and other influential people will not bear any consequences or results of these decisions.
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