MANAMA: A gap in knowledge and capabilities in management boards are the most significant barriers to effective corporate governance in GCC companies.
That is the conclusion of a report by the GCC Board Directors Institute (BDI) entitled Embarking on a Journey.
The biennial report is based on a survey conducted by BDI of top 200 publicly-listed companies in the GCC, combined with a survey involving over 200 board members in the region.
In addition to knowledge and capabilities, the report found that board effectiveness in the GCC could also be improved by better preparation and involvement of directors in board meetings.
Almost 15 per cent of directors surveyed found that their roles and responsibilities as board members were becoming increasingly ambiguous compared to two years ago.
On the other hand, the report found that GCC boards have indeed improved on several fronts in the past two years, such as a 40pc increase in board independence and 22pc of board members being overcommitted.
These improvements have been identified by the report as making important progresses in strengthening the accountability and commitment of directors to their board responsibilities. The 2011 report will enable companies to review priority improvement opportunities in GCC.