DIFC firms' corporate governance could improve

DIFC firms' corporate governance could improve

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There is a good level of corporate compliance from institutions licensed by the Dubai International Financial Centre (DIFC) and their governance structures and arrangements generally reflected the nature, scale and complexity of the businesses reviewed, finds a Dubai Financial Services Authority (DFSA) review.

However, the review also found that in some cases the practices of some institutions fell short of their own stated policies. The DFSA noted that governance arrangements and responsibilities often did not align to business plans and strategies. It stated that those institutions should comply with their stated polices or amend them to reflect current practices.

A significant finding of the review was that firms often did not carry out structured, periodic reviews of their governing bodies (generally the board of directors) and their committees, or their effectiveness.

"The findings of the review provide a benchmark and reference that should be used by institutions to assess their corporate governance frameworks and practices. The DFSA is working to enhance the quality of governance of regulated businesses in the DIFC and where we detect governance failures we will rectify them through supervisory methods or enforcement action," said Ian Johnston, CEO of the DFSA.

While the DFSA routinely reviews the quality of governance in regulated businesses in the DIFC, this is the first full scale corporate governance review and it’s the first time the DFSA has issued a report on the subject.
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