Middle Eastern Banks Shrug Off Turmoil By Tightening Corporate Governance Structure

The Bank of Bahrain and Kuwait (BBK) has become the first company in the Middle East to invest in a new ‘Boardworks’ system, which was put in place to ensure greater transparency and improve the bank’s existing corporate governance framework.

Computershare Governance Services (CGS), part of the Australia-headquartered Computershare group, has been awarded a contract to supply BBK with secure board portal technology.

‘In its continuous endeavours to improve further the corporate governance practices at the Bank, BBK is always keen to invest in major initiatives in the area, such as this online board portal, which we are proud to be the first company in the Middle East to introduce,’ says Abdulkarim Bucheery, chief executive of BBK.

The Boardworks technology will promote effective board communication channels, which can be accessed through various devices in multiple regions before and after meetings, CGS explains. In turn, this will provide the support needed for the circulation of important board materials.

Recently, the oil rich state of Bahrain has been beefing up its corporate governance practices amid the country’s political instability. Gulf Finance House (GFH), for instance, last week unveiled a future growth strategy at its annual meeting, during which shareholders approved the corporate governance and board report on GFH’s strive towards business excellence, says Esam Janahi, GFH executive chairman.

In addition, decisions were accepted on the formation of a new board of directors for the Bahrain-based bank for the next three years (2011-2014), subject to approval by the Central Bank of Bahrain (CBB), adds Janahi.

BBK is doing the same but is using technology to gain the upper hand. The 40-year old institution claims that the integration of the new technology serves as a key driver in its plans to adopt a firm corporate governance philosophy, which will help it secure a leading position in the local and regional banking sector.

‘Having in place good corporate governance practices has always been the BBK board of directors’ prime concern,’ says Murad Ali, the bank’s chairman, in an earlier statement. ‘The efficiency of the process of sending board meeting materials and other communications greatly affects the decision making process of the board towards protecting and maximizing the benefit for the shareholders of the bank.’

[Article by Aarti Maharaj, Corporate Secretary]