Corporate Governance Solutions

The UAE Regulatory Requirements

Regulators in the UAE have made corporate governance a top priority. Frameworks set out by CBUAE, DFSA (DIFC), FSRA (ADGM) and the Securities and Commodities Authority emphasize:

These requirements aim to safeguard financial stability and reinforce the UAE’s position as a global financial hub.

Key Challenges for LFIs

• Unclear Delegation of Authority: Decision making authorities are not clearly defined, documented or consistently applied, leading to overlaps, delays or unauthorized approvals.
• Undefined or Inadequate Board and Management Charters: Board and management committee charters do not clearly articulate mandates, roles, responsibilities or decision rights.
• Poor-Quality or Incomplete Board and Committee Minutes: Minutes fail to capture substantive discussions, challenges, dissent and decisions made.
• Blurring of Board Oversight and Management Responsibilities: Boards become overly involved in operational matters, or management assumes responsibilities that should remain with the board.
• Inadequate Role Clarity and Accountability: Key roles are not clearly differentiated, leading to gaps in accountability and decision ownership.
• Insufficient Board Independence and Challenge: Limited independence or overreliance on executive management constrains constructive challenge, debate and critical oversight.
• Weak Risk and Control Oversight: Governance arrangements do not adequately support risk oversight, effectiveness of internal controls, or effectiveness or escalation of material issues.
• Limited Periodic Effectiveness Reviews: Boards and committees do not regularly assess their own effectiveness, composition, skills or performance, limiting continuous improvement.
• Ineffective Information Flow to the Board: Board information is insufficiently focused on key risks or is not timely, impairing informed decision making.