The second Arabia CSR Network workshop of 2010 was held on 7 June 2010, in partnership with Hawkamah, Institute for Corporate Governance.
The partnership came forth out of the signing of an MoU, on 16 March 2010 between the two organizations.
The workshop focused on the Transparency & Good Governance and featured in depth presentations and practical workshops on Disclosure, Governance and Sustainability.
Opening the workshop with brief remarks, Habiba Al Marashi, President Arabia CSR Network, reiterated the importance of Transparency & Good Governance, especially in this time of economic upheaval and corruption scandals that have plagued the region. She then introduced Dr. Nasser Saidi, Executive Director of Hawkamah.
In his key note presentation, Dr. Saidi stressed the importance of Disclosure and began his presentation by laying out the 12 core standards for sound financial systems and then moved on to discuss the recent studies undertaken by Hawkamah on the status of Corporate Governance in the Arab world.
He noted that it is very difficult for economists to compile financial and economic data on the region, as much information is simply not available. He noted progress in the region, in the form of the introduction of Corporate Governance codes in most of the Gulf States, but also stated that the Arab world still has the worst track record in the world on matters of statistical disclosure.
Among the many reasons for increased corporate governance, Dr. Saidi highlighted the global financial crisis, the rise of non-financial indicators as indicators of investor confidence and the role of responsible investment in reducing financial risks as the most important factors. He voiced the need for a region wide disclosure monitoring body, which would ensure that standards of good governance are implemented by Arab Governments. He called on leaders to establish "Arab Stat" to ensure statistical disclosure in the region, as well as the more regional "Gulf Stat" focused on the GCC states.
He then continued to discuss the importance of ESG; Environmental, Social and Governance disclosure for companies in the region, and used the opportunity to introduce the ESG Index, developed by Hawkamah.
Dr. Saidi's presentation was followed by the second key-note of the day, delivered by Dr. Ebtissam Al Kitbi, lecturer UAE University.
Dr. Al Kitbi spoke on the moral imperative for Transparency & Good Governance in the region and delivered a passionate appeal for greater transparency and disclosure in the region. Stating that "international rating agencies consistently refuse to give the GCC countries the highest investment ratings due to a lack of information". Dr. Al Kitbi warned that the strongest champions in Anti-Corruption largely avoid the region because of this situation and that low transparency is a major barrier for new investors in the region and echoed Dr. Saidi's statement that none of the GCC countries have a well functioning transparency and disclosure system in place, notwithstanding the strong improvements made in recent years in the Gulf region.
She called on companies in the region to step up their efforts in Transparency to maintain its economic advantage. She noted that lack of disclosure stands as one of the main economic development challenges in a region otherwise economically developed.
Dr. Al Kitbi's rousing speech was followed by a presentation from Ms. Mariam Farag, CSR & Outreach executive at the Community Development Authority.
With its mission to elevate the standards of living of UAE citizens, the Community Development Authority is investing heavily in its community outreach and CSR. Citing social inclusion, national identity, a cohesive community and social empowerment as their main aims, Ms. Farag stressed the importance of public private partnerships to advance CSR practices in the region. She described the partnership between the Chamber of Commerce and the Ministry of Social Affairs, based on the belief that: "The government should lead the way and has a big responsibility towards CSR." She also ensured attendees that "The Community Development Authority has not been established to marginalize existing NGOs and Civil Society, but to work with them on a government level and to empower them."
After the coffee break, participants convened for a high level panel discussion. The panel consisted of representatives from General Electric, Abraaj Capital, Hawkamah and Dr. Hatem Al Shanfary, Vice President of the Oman Economic Association.
Dr. Al Shanfary gave participants an overview of the current disclosure status in Oman, noting that Oman is leading the way in the GCC region when it comes to transparency regulations, with its Capital Market Authority issuing the first corporate governance code in the region in 2002. Dr. Al Shanfary admitted however, that cooperation in the GCC on this topic has been lacking and cited the individualistic nature of the region's governments as the main reason.
He went on to express his wish for greater cooperation in this field, stating that the Omani example of strict disclosure regulation and enforcement would go a long way in helping the region become even more attractive to investors.
The panel members further discussed ways in which the region can improve its disclosure standards and were in agreement that lack of transparency will prove to be fatal for the region in the long run, especially in light of the current economic crisis
The panel discussion also featured a presentation from Hawkamah, focusing on "Mainstreaming Disclosure and Transparency" and on ESG disclosure in particular. Following the introduction by Dr. Saidi, this presentation focused on the MENA ESG index that Hawkamah is currently developing in conjunction with Standard and Poor.
In response to questions from the audience on the need for such an index, it was stated that an index will relate companies' ESG performance to stock market performance, and has assets attached to it, raising the cost of capital for those that are not listed. Obviously, there is a certain amount of "naming and shaming" attached to indexes such as these, creating a public list of leaders and laggards and incentivizing companies to be on the list.
After the lunch break attendees were engaged in a practical workshop, conducted by Mr. Nick Nadal, Director at Hawkamah. He opened the interactive session by asking all participants to share their definition of Corporate Governance, before moving on to explore strategies to improve corporate governance in organizations in the region.
This session was followed by another practical workshop, conducted by Ms. Maria Sillanpaa, Managing Director, Sustainability Advisory Group.
Speaking on sustainability reporting, Ms. Sillanpaa stated that the question is no longer "Who is reporting?" but rather: "Who is not."
To underscore her statement, she went on to say that 80% of the 250 world's largest companies now publish annual sustainability reports.
Ms. Sillanpaa then proceeded to give participants tools to compile and draft a sustainability report that is in line with the company's core business strategy. The rest of the session was spent exploring ways in which organizations can elevate their CSR activities from Corporate Social Responsibility to Corporate Sustainability and Responsibility. Where traditional CSR is ad hoc and built on, Corporate Sustainability and responsibility is more strategic and built into an organization.
Participants were given plenty of time to ask questions and engage with the speakers, and the discussion continued outside, where drinks and snacks marked the end of the event.
Mr. Nadal was followed by a Maria Sillanpaa, managing director Sustainability Advisory Group. In another practical workshop, she focused on: "Developing strategies for Environmental and Social Sustainability."
She shared with participants examples of how sustainability strategies can benefit an organization and lead to increased revenues. She imprinted on the attendees the importance of sustainability strategies that are a core part of an organization's business principles, rather than initiatives on the sidelines.
