Toronto – A new initiative has been launched to develop a set of board ratings criteria for Saudi Arabia public companies. The initiative is a partnership between Al Faisal University, GCC Board Directors Institute, and The Saudi Arabian General Investment Authority (SAGIA) with the support of several partners including the University of Toronto’s Clarkson Centre for Business Ethics and Board Effectiveness (CCBE). It was announced today at the Global Competitiveness Forum (GCF) in Riyadh.
The CCBE, which is based at the Rotman School of Management, will be called upon to share their Canadian experience in monitoring corporate governance and help establish the most meaningful parameters for a “made in Saudi Arabia” approach for a board ratings based on their Canadian ratings as well as best practices from the Canadian Coalition for Good Governance. Leading the CCBE’s involvement in the initiative will be David R. Beatty, the Centre’s Conway Director.
The criteria will be developed in collaboration with the Saudi Arabia’s business community and by assessing the current regulatory requirements in place in the Kingdom. The criteria will focus on areas that have particularly strong impact on board effectiveness, including director independence, board composition and compensation. The board ratings will be based entirely on publicly-available data in order to measure transparency, and to ensure a level playing field for each issuer. Such an index will benefit investors who will easily be able to understand the effectiveness of the governance of companies in which they are considering investing, as well as providing boards with a best-practice template for their processes and procedures.
The CCBE is well known in corporate governance circles for their work on measuring and setting standards for Canadian governance best practices, including their annual Board Shareholder Confidence Index, which is featured prominently in The Globe & Mail’s Board Games series. The ratings measure the adoption of effective practices by Canada’s top 250 public issuers and since their creation have contributed to significantly improved the standards of corporate governance in Canada and hence the attractiveness of Canadian capital markets.
Founded in 2006 by the Saudi Arabian General Investment Authority (SAGIA), the GCF has grown into one of the largest and most important annual gatherings of academics, business leaders, politicians and journalists in the region.
GCC Board Directors Institute is a not-for-profit institution with the objective of making a positive impact on the economies and societies of the region by promoting professional directorship and raising the level of board effectiveness. For more information go to: www.gccbdi.org
Al Faisal University was founded by the King Faisal Foundation in 2002 as one of the first private non-profit, research and teaching universities in the Kingdom of Saudi Arabia committed to achieving international standards of excellence.
The Rotman School of Management at the University of Toronto is redesigning business education for the 21st century with a curriculum based on Integrative Thinking. Located in the world’s most diverse city, the Rotman School fosters a new way to think that enables the design of creative business solutions. For more information, visit www.rotman.utoronto.ca.
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