Improved corporate governance in the region will improve the prospects of GCC’s economic growth by mitigating risks and reducing markets volatility, according to Rashed Al Baloushi, Deputy Chief Executive (DCE) and Director of Operations at Abu Dhabi Securities Exchange (ADX).
Rashed’s comment comes on the occasion of ADX’s sponsorship and participation in the 1st Abu Dhabi Corporate Governance Conference, titled “Corporate Governance in the UAE: Current Realities ... Future Prospects,” taking place today Wednesday, October 14, 2009 in the capital.
The one-day event is organized by Abu Dhabi Center for Corporate Governance, and is hosting a distinguished elite of speakers and experts to review and discuss the various aspects of corporate governance codes and implementation.
Rashed explained that “enhanced corporate governance can result in the growth of total returns by 5% in three years and by 8% in five years time.”“At times of economic or financial turmoil, corporate governance appears to be among the key elements of stability that can help direct the course of corporations towards recovery,” he added.
Facing the repercussions of the recent international financial crisis, companies with better corporate governance practices had better oversight of controls and were able to generate better performance.
“Recent studies and research have proved a high correlation between enhanced corporate governance practices and positive growth, while institutions adhering to weaker governance codes had to accept less returns,” Rashed said.
Through participating in such important events, ADX is seeking to enhance awareness among investors, and to review the latest trends necessary for implementing the best international practices whenever possible.
“By next year, the Securities and Commodities Authority’s codes on corporate governance for listed companies will be fully implemented, and corporations need to prepare for a new era of better transparency, disclosure and corporate integrity,” Rashed said.
