Given the important role of state ownership in MENA countries, there is a need for a clear policy for enterprise reform relying on improved corporate governance of state-owned enterprises. Such policy is important for enterprises to be privatised as well as for those remaining under total or partial state ownership. By improving the process of decision making and control by the state, good governance can improve SOEs performance and competitiveness, and level the playing field between state-owned and private enterprises. In many instances, better performing SOEs can have positive fiscal implications, insofar as government budgets are all too often called to the rescue of large SOEs.

Good governance provides better transparency in corporate structures and operation and reduces the opportunities for political interference in the interactions amongst government, management and stakeholders. Thus, good governance of SOEs is conducive to better public sector governance in general, and to reducing corruption.

As one of the Task Forces endorsed by the Dubai Declaration issued in November 2006, the Task Force on Corporate Governance of State Owned Enterprises will develop a MENA Policy Brief on Corporate Governance of SOEs, identifying priorities and proposing concrete recommendations. The Policy Brief will be a consensus based document, resulting from the meeting and electronic consultations on an exposure draft.

Read More About the Task Force's Scope of Work ( PDF 44 KB)

The Index will cover Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain, Oman, Jordan, Egypt, Lebanon, Morocco and Tunisia, and will provide qualitative information to investors looking to analyse these companies' sustainability performance. Index constituents are to be derived from over 1,000 listed companies and selected by total market capitalization. This universe of stocks is then subjected to a screening process which yields a score based on a company's ESG disclosure practices in the public domain. Examples of disclosure channels in the public domain include annual reports, websites, bulletins, and disclosures made on stock exchanges.

Not only will the project strengthen and promote the success of environmentally sustainable, socially responsible businesses in the MENA region, but by attracting long-term international institutional investors looking for exposure to socially responsible companies in emerging markets, the index will help reduce regional stock market volatility.

The survey

To complement the ESG analysis, Hawkamah has sent a survey to the listed companies potentially included the index. The purpose of this survey is to assess to what extent the companies of the MENA region are ready to meet the changing demands of long-term investors as well as other stakeholders, and benchmark these practices across the MENA. We greatly appreciate the respondents' assistance in this initiative and they will be invited to the formal launch of the Index.

For more information, please contact info@hawkamah.org