Firms in the UAE must lose the ‘tribal attitude’
Top executive says one leader policy is major issue
Many companies trading in the UAE are still too “tribal” in the way they operate and rely on a single individual to lead and make decisions, a conference has told.
The INSEAD Global Business Leaders Conference, held at the St Regis Saadiyat Island Resort in Abu Dhabi, heard how corporate governance and processes remain weak and how too many organisations and firms “still follow the one leader rule”.
Mishal Hamed Kanoo, Chairman of the Kanoo Group, said many firms need to modernise. He also said too many senior staff in companies fear being honest with their bosses.
He said: “Corporate practices in businesses in the UAE are still tribal, if I may... we still follow the ‘one leader’ or decision-maker rule, which is where the fear factor comes in. Take into account a board of directors.
“Everyone wants to know what the boss wants and want to give him exactly that, which sort of defeats the purpose of having governance in your company or even a board of directors.
“The board is thinking ‘I am here to say what is wrong and right but if I don’t give them what they want, I will be off the board or lose my job’.
“If the leader, owner, or boss is not able to make a free environment, open conversation and tell their employees that they can talk to the management without costing them their job, that is the sort of environment every successful country needs among their business people.”
Dr Ali Rashid Al Noaimi, Director General of Abu Dhabi Education Council, also said staff in public and private sectors continually take short cuts.
He said: “The biggest challenge we face is implementing good governance within a culture that already needs a lot of work to understand the true value of governance. Systems, regulations, procedures, bylaws – they are still new to a lot of us.
“Most people in our country want to do get things done in a short way – not by following procedure.”
Ludo Van der Heyden, Academic Director of the INSEAD Corporate Governance Initiative, said the public sector has its own challenges.
He said: “People in the public sector are very compliant and do not speak up enough, because they fear the government. This means corporate governance in the public sector is weaker than in the private sector.”
‘We still follow the one leader or decision-maker rule, which is where the fear factor comes in.’ – Mishal Hamed Kanoo