By Talal Malik
First-ever research on some 500 of the region's company boards dispels pre-conceptions.
Four out of every five company directors in the Gulf tend to serve only on the board of one company, despite widespread pre-conceptions to the contrary, a new report on the region's company boardrooms has revealed.
UAE-based banking group The National Investor (TNI) said on Monday it had published a report analysing the boardrooms of more than 500 companies in the GCC, and had found that the vast majority of boards in the region's economies were dominated by individual directors.
"Interestingly and contrary to widespread pre-conceptions, cross-board membership on boards of listed companies is limited," said Nasser Saidi, executive director of the Dubai-based Hawkamah Institute for Corporate Governance, in introducing the report.
"Across countries in the GCC, 80% to 90% of individual directors are on a single board, with most cross-board representations being on two boards."
TNI published the first-ever research report of 582 companies in the GCC, with 3,493 individuals occupying 4,254 board seats of listed companies in the Gulf, it said in a statement on Monday.
The publication 'Power Matters: A Survey of GCC Boards' aims to identify some of the key trends in the boardrooms of the Gulf, particularly board composition, the participation of women in boards, and the role of families on boards.
The report concluded that though the power of individual company directors seems fairly diluted in the region, the influence of powerful families in the region's boardrooms is very high.
"Families still dominate some of the boards," said Saidi, whilst also acknowledging the fact the region was far from unique in this trend, particularly compared to other emerging economies.
Over 85% of EU and US businesses are family run and family-run businesses constitute 40% of the US S&P 500 universe, added Saidi.
However, TNI also said that its report demonstrated that "prominent families usually associated with the leadership of a country or Emirate are often under-represented on the boards of public companies, except in Qatar".
Whilst recognising that the presence of women in the region's boardrooms was low, it is "not as much as we thought", said TNI.
"The representation of women in boards is still low compared to international benchmarks, despite the growing number of Arab women entrepreneurs," said Saidi, which the report attributed primarily to social and religious parameters in the economy.