Industry advances MENA corporate governance

How to best manage portfolio companies is high on the agenda for the MENA Private Equity Association, who recently signed a memorandum of understanding (MOU) with Hawkamah, the Middle East’s corporate governance institute.

The alliance was born out of Hawkamah's “Private Equity Task Force” which has been working with local GPs in developing corporate governance practice guidelines and principles for firms to apply at their portfolio companies.

“Corporate governance helps growing businesses, and can have a significant impact on the quality of operations. The partnership with Hawkamah will help [in] formalizing the standards of governance that private equity brings to the table to its investee companies,” said MENA Private Equity Association co-founder Imad Ghandour in a statement. “Invariably, well governed companies command higher premiums at exit.”

.telerik-reTable-1 { border-width: 0px; border-style: none; border-collapse: collapse; font-family: Tahoma; } .telerik-reTable-1 tr.telerik-reTableHeaderRow-1 { margin: 10px; padding: 10px; color: #3F4D6B; background: #D6E8FF; text-align: left; font-size: 10pt; font-style: normal; font-family: Tahoma; text-transform: capitalize; font-weight: bold; border-spacing: 10px; line-height: 14pt; vertical-align: top; } .telerik-reTable-1 td.telerik-reTableHeaderFirstCol-1 { padding: 0in 5.4pt 0in 5.4pt; color: #3a4663; line-height: 14pt; } .telerik-reTable-1 td.telerik-reTableHeaderLastCol-1 { padding: 0in 5.4pt 0in 5.4pt; color: #3a4663; line-height: 14pt; } .telerik-reTable-1 td.telerik-reTableHeaderOddCol-1 { padding: 0in 5.4pt 0in 5.4pt; color: #3a4663; line-height: 14pt; } .telerik-reTable-1 td.telerik-reTableHeaderEvenCol-1 { padding: 0in 5.4pt 0in 5.4pt; color: #3a4663; line-height: 14pt; } .telerik-reTable-1 tr.telerik-reTableOddRow-1 { color: #666666; background-color: #F2F3F4; font-size: 10pt; vertical-align: top; } .telerik-reTable-1 tr.telerik-reTableEvenRow-1 { color: #666666; background-color: #E7EBF7; font-size: 10pt; vertical-align: top; } .telerik-reTable-1 td.telerik-reTableFirstCol-1 { padding: 0in 5.4pt 0in 5.4pt; } .telerik-reTable-1 td.telerik-reTableLastCol-1 { padding: 0in 5.4pt 0in 5.4pt; } .telerik-reTable-1 td.telerik-reTableOddCol-1 { padding: 0in 5.4pt 0in 5.4pt; } .telerik-reTable-1 td.telerik-reTableEvenCol-1 { padding: 0in 5.4pt 0in 5.4pt; } .telerik-reTable-1 tr.telerik-reTableFooterRow-1 { background-color: #D6E8FF; color: #4A5A80; font-weight: 500; font-size: 10pt; font-family: Tahoma; line-height: 11pt; } .telerik-reTable-1 td.telerik-reTableFooterFirstCol-1 { padding: 0in 5.4pt 0in 5.4pt; border-top: solid gray 1.0pt; text-align: left; } .telerik-reTable-1 td.telerik-reTableFooterLastCol-1 { padding: 0in 5.4pt 0in 5.4pt; border-top: solid gray 1.0pt; text-align: left; } .telerik-reTable-1 td.telerik-reTableFooterOddCol-1 { padding: 0in 5.4pt 0in 5.4pt; text-align: left; border-top: solid gray 1.0pt; } .telerik-reTable-1 td.telerik-reTableFooterEvenCol-1 { padding: 0in 5.4pt 0in 5.4pt; text-align: left; border-top: solid gray 1.0pt; } In an interview with PE Manager, Ghandour said that the industry has been aware of a need to improve corporate governance for some time. Building off past research and initiatives, the two groups are expected to draft specific guidelines for GPs to follow in the region, according to Ghandour, who at the time was unable to dive into details.  

“One of the main challenges that the private sector currently face is to go beyond existing regulations and focus on the implementation of corporate governance best practices to support the value creation process. This is the essence of what the Hawkamah/Association partnership is attempting to address,” said Nick Nadal, head of Hawkamah, in a statement.

Ghandour said he hopes the voluntary guidelines become law, but does not expect governments in the region to adopt them “anytime soon”.