Hawkamah has dedicated this section to your views. As a Hawkamah member or as an individual keen on corporate governance issues, this space is reserved for you to raise a point of special interest, ask a question, or make a suggestion.
A recent example is the question we’ve received:
Q: By introducing Code of Corporate Governance in Family Owned Enterprises (FOEs), does the family not lose management control considering that the code requires majority of Directors on the Board to be Independent?
A: No. The code generally requires the Board to have 20-25% Independent Directors. The Board then further constitutes various Committees e.g the Audit Committee, Remuneration Committee, Nominations Committee whose majority members are required to be Independent Directors.
By introducing the code in FOEs, the family members do not lose management control of their enterprise, rather they are assisted by Independent Directors in making strategic/ operational decisions for their enterprise. These Independent Directors are required to have expertise in the area of management. They can make uninfluenced and ‘independent’ decisions for the benefit of the enterprise as they are associated with the enterprise only on the grounds of their competence and not by virtue of being an ascendant or descendant of the owners.
To send your views to Hawkamah’s specialists, you can either send us an email to firstname.lastname@example.org
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