First Conference on Corporate Governance Kicks Off

The first conference on corporate governance and the launch of governance reports book kicked off on Monday with the participation of spokespeople and experts from Qatari public shareholding companies, institutions, banks and international companies.

They will discuss the importance of governance and the methods to effectively implement its principles in compliance with the highest global standards and best professional practices in order to establish the necessary rules of transparency and disclosure in all corporate operations.

The conference is jointly organized by Qatar Financial Markets Authority (QFMA) in cooperation with Hawkama Center and is supported by big banks and Qatari public shareholding companies. It also sees the attendance of HE Qatar Central Bank (QCB) Governor Sheikh Abdullah bin Saoud Al-Thani, QFMA board chairman, bank heads and CEOs of sponsoring and participating companies.

QFMA CEO Nasser Ahmed Al Shaibi said the one-day conference will highlight the governance system of companies and main legal entities listed in the market and the governance system in the emerging companies issued by QFMA. The conference will also review corporate governance practices at the local level in comparison with international examples, as well as the most important international experiences and best practices, Al Shaibi added.

Al Shaibi said this conference comes as part of the authority’s strategy within the Qatar National Vision 2030 and looking forward to a positive future vision that reflects the objectives of the authority based on the national development strategy. In addition to the goals of the financial sector in the country to prosper the public benefit and upgrading the Qatari capital market to serve as a model for financial services, Al Shaibi added. He also noted that these efforts culminated in leading the Qatari market in the Arab world according to most international classifications of the capital market during 2016 and with the upgrade of the Qatari market to emerging markets in three of the biggest global investment indicators specialized in this field.

Al Shaibi said that the State of Qatar is ranked ninth globally and first in the Arab countries on the International Competitiveness Report of the World Economic Conference on securities market legislation under the eighth pillar on the development of financial markets. It also ranked sixth globally with regards to protecting the interests of the minority under the first pillar on institutions. The State of Qatar also ranked second among the five international groups in the international corporate governance index for 2017.

Al Shaibi said that despite the fact that corporate governance systems is not new, its importance is increasing and has become one of the most important issues in light of the many crises facing the financial markets. He added that QFMA worked on the development of the governance system in the context of the development of the authority’s legislation, which has risen from the principle of commitment or justification of non-compliance to the principle of commitment, within the best international practice to impose the principle of commitment to enhance investor protection. He called on the listed companies to strengthen their role in developing the market, protecting the investment environment and implementing the strategic objectives of the authority.

The QFMA CEO confirmed that the authority is keen to be one of the first initiators of implementing compulsory governance systems for public shareholding companies listed in the market and complying it with the best international practices and principles. He also said the authority cooperated with a number of specialized international institutions in order to develop the governance systems of public shareholding companies listed in the market and to improve their classification internationally. He added that the authority depended on the governance principles listed by G-20, Organization for Economic Cooperation and Development, international financial institution, Bank for International Settlements, International Association of Insurance Supervisors and International Corporate Governance Network. Al Shaibi said it committed to the guiding principles for corporate governance in the GCC financial markets, keeping in mind the nature of the Qatari market and its needs.

Al Shaibi said that the governance aims to instill the principled of transparency and disclosure, taking responsibility and acknowledging it, justice and equality, achieving effective control, risk management and protecting the interests of contributors especially the minority of them through not empowering or the controlling of the interests of the majority. Al Shaibi also said the governance aims to strengthen the role of companies in developing an investment environment, improve and better the level of risk management that faces the listed companies, which contributes to improving the market’s financial competitiveness and increases its ability to attract investments.

Al Shaibi said that QFMA’s sponsorship to the conference comes from its full understanding that the role of regulators does not stop when regulatory legislation is issued, but must extend to raising awareness to the people, develop the knowledge levels of those working in the financial market, as it also comes as part of its importance to develop the investment concept fr Qatari stock marketers and raise awareness between them in order to raise their self capabilities. The authority is also keen to achieve the concept of wise management in companies.

In his speech at the opening of the conference, Qatar Stock Exchange (QSE) CEO Rashid Ali Al Mansoori highlighted the corporate governance process in Qatar since the inception of QSE and the launching of its operations in 1997. He pointed out that the Qatari financial market and the listed companies have witnessed rapid developments that have led them to take responsibility for their commitment to the rules of governance that ensure transparency, responsible management and sustainability.

The QSE CEO noted that the process of corporate governance in Qatar started with 17 listed companies at the opening of the stock exchange, bringing the number of listed companies to 45 representing many important economic sectors and the largest national companies with a strong presence not only at the national level but also internationally. He noted that, since they were listed in the market, they have been responsible for complying with the rules of governance that ensure transparency, responsible management and sustainability.

Al Mansoori pointed out that the great interest in corporate governance has emerged as a result of the increasing complexity of the legal and global environment, increasing the participation of investors in the development of markets and the awareness of these investors and companies on the risks resulting from the lack of practice of governance in addition to the importance of corporate responsibility to their communities.

He pointed out that many international studies confirm that there is a strong correlation related to the determination of the level of emerging markets between the performance of stocks in terms of price trends and levels of return and the extent to which companies adhere to the principles and the concepts of governance to ensure the success of corporate management in preserving the shareholders’ rights and developing them.

The QSE CEO noted that good governance helps listed companies obtain funding and ensures maximizing the value of the company’s shares and their long-term sustainability in addition that governance can be viewed from a political point of view as an indicator of democratic management and participation in the formulation of good policy, while governance can be viewed legally as referring to the nature of the contractual relationship that defines the rights and duties of shareholders and stakeholders on the one hand and managers on the other. Governance can also be considered socially and morally by focusing on the social responsibility of the company in protecting minority rights or small investors, achieving equitable economic development and protecting the environment.

Al Mansoori stressed that the degree of commitment of companies to apply the principles of governance has become one of the fundamental criteria that investors consider when making investment decisions, especially in the context of economic globalization and increased competition among companies, and therefore companies that apply the principles of governance have a competitive advantage to attract capital and their long-term competitiveness is enhanced by the transparency of these companies to support the confidence of both domestic and international investors to invest in them.

He said that corporate governance is one of the sustainability mechanisms that QSE seeks to share in building its foundations.

Al Mansoori stressed that the QSE has maintained its distinction as one of the best markets in the region, and is now ranked as the largest emerging market in the region and second in terms of market value. The primary driver of QSE’s strength is Qatar’s enormous economic potential as well as a constant and continuous drive to diversify its economy, making it a promising market with many opportunities.

He noted that QSE is a national platform for financing, investment, economic diversification and corporate participation. Its role is highlighted as the backbone of capital movement and a key factor in the development of the economy and its importance lies not only as a place for trading securities but also in playing other important macroeconomic roles and contributing to economic development.

Al Mansoori stressed that QSE is one of the emerging markets, which have multiple capabilities to continue growth and progress and the most important characteristics of those markets the high rate of economic growth and the increase of investment rates and profits.

For his part, Hawkama Center Chairman Mansoor Al Saadi said that the first conference on corporate governance comes to cope with the several developments on the local and international fronts, noting that governance, also known as wise management, has been a concern for many at the end of the last century and the beginning of the current one as regulators and stakeholders are keen to ensure that public and private companies follow proper procedures to maintain their funds as shareholders so as to achieve the desired growth.

Al Saadi added that Qatari public shareholding companies have been writing corporate governance reports since 2010 under the governance system that QFMA issued in 2009. He stressed that the State of Qatar is the only Arab country that obligates its joint stock companies to submit such reports, noting that this is in line with the commercial law of 2015, the new OECD standards for 2015, and the new governance system in Qatar for 2017.

Over the past few years, he said, many workshops have been held in this field. However, he noted that this is the first time that a corporate governance conference brings together in one place national companies, regulators, audit and accounting companies, as well as many international institutions, consultants and academic institutions.

The conference is jointly organized by Hawkama Center with an official sponsorship from QFMA and is supported by big banks and Qatari public shareholding companies. It is set to take place on an annual basis so as to review the implementation of governance and holding more discussions among relevant parties. Several workshops and trainings will be held for board members and executive managers of companies to deepen knowledge and exchange expertise.

The conference featured today a panel discussion that touched on local trends in corporate governance, in which it was emphasized that the governance system that will come into force on Tuesday is a comprehensive system that takes care of all activities as well as the nature of Qatari companies and international standards in this regard. All instructions issued by regional and international stakeholders have been considered as an integrated system that will help these companies grow and achieve the desired objectives for their shareholders.

The second session discussed local experiences in corporate governance. It highlighted that the corporate governance system aims at combating financial and administrative corruption in companies by enhancing the concept of transparency, providing financial data on a regular basis, and informing the regulatory authorities about the company’s activities, especially that the system works to identify responsibilities and duties in the senior management of companies.

The third session touched on governance applications for local companies and discussed the history of the implementation of the governance system and how it contributed to the development of the Qatari capital market globally in light of QFMA’s issuance of the corporate governance system whose amended edition was listed in the market in 2014, featuring principles and practical applications that aim at improving the performance of the boards.

The session reiterated that companies are required to adhere to the rules of governance to develop their performance, avoid risks and attract investments, especially because, after the implementation of the rules of governance, investors can obtain information about the companies so that they can make investment decisions.

Companies benefit from the application of the governance rules because when investors feel that a company adopts the principles of transparency, justice and oversight, they reward it by increasing the investment and, thus, contribute to the value of its shares on the stock exchange. If the company doesn’t comply with the system, it holds itself accountable by the investor as well as regulatory authorities, so adherence to these rules is important for the growth of the company

Source: Fana News