A senior UAE-based lawyer has called for the UAE regulator to take heavy enforcement action against listed companies that do not meet corporate governance requirements.
Speaking at the Middle East Securities Forum in Abu Dhabi, Vanessa Abernethy also said UAE firms should pay compliance officers more and give them more seniority to challenge the actions of chief executives or boards.
“Within the DIFC [Dubai International Financial Centre] there has been strong enforcement,” said Abernethy. “Damas is an example. Onshore, we haven’t seen much public enforcement. There’s a sense that if you don’t get everything 100% right that is OK. The way to fix this attitude onshore is by having a couple of heavy enforcement actions taken against non-compliant companies.”
The Damas case refers to the DIFC regulator’s imposition of financial penalties and other punishments on Damas International in 2010 for mismanagement.
Abernethy says she has seen listed companies in the UAE paying “lip service” to corporate governance by sending one or two employees to workshops with their regulator but failing to educate the rest of their staff on the insights gained and failing to let compliance officers influence decision makers.
“For corporate governance to work everyone from the tea boy to the chairman of the board has to understand it to the extent appropriate,” she said. “I see a real lack of awareness at the entities themselves.”
Abernethy spoke at a panel chaired by Philip Jolowicz, counsel at law firm Clifford Chance. The Middle East Securities Forum is an annual conference for the securities industry attended by asset servicing firms, regulators, lawyers and representatives from regional exchanges.
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