Corporate Governance: A Luxury or a Necessity?

Despite the success that many Arab companies achieve in their markets — and the impressive results they report at the end of each year — a closer look reveals troubling indicators of negative organizational patterns and deep-rooted administrative issues that pose serious risks in the medium and long term.

An internal examination of these companies often shows that many are run based on the vision and authority of a single individual. There are no functioning boards of directors to make critical decisions, and specialized committees either do not exist or are significantly marginalized. The opinions of technical and administrative teams are frequently ignored.

These companies also suffer from a lack of clear roles and responsibilities. When employees are asked about their duties, there are often large discrepancies between what they do and what they are supposed to do. Departmental responsibilities are frequently overlapping and undefined.

Another major issue is the reliance on individuals rather than systems. A small group of trusted people tend to control operations without structured administrative frameworks, oversight mechanisms, operational manuals, or documented policies and procedures.

As a result, internal systems — including recruitment and hiring processes — are affected. Hiring decisions are often based on personal connections rather than merit, with no clear criteria for selection. This leads to the loss of top talent, who leave for competitors that offer better organizational structures and working environments.