Global News: Middle East

MENA forum addresses governance goals

Corporate governance experts have stressed the importance of diversity and the independence of boards in the Middle East at a recent forum held in Dubai.

Organised by UAE-based Hawkamah, the forum attracted corporate governance practitioners, drivers and regulators from across the region.

Speaking at the forum, leadership adviser Johan Brand said: “Boards in the Mena region comprise known members and while this makes them quite comfortable and enhances the trust, there can also be some negative implications.

“As such, independent boards should be encouraged in order to facilitate a stronger and more concrete business model.”

Discussions also highlighted the importance of diversity across age, ethnicity and gender in order to manage the goals of organisations and meet the expectations of their shareholders.

Saudi embraces women in leadership

Saudi Arabia is going through a ‘genuine reform process’ and has recognised that the exclusion of women from leadership roles impacts economic potential, an industry observer has told Forbes.

Earlier this year, Rania Nashar was named chief executive of Samba Financial Group, becoming the first female CEO of a listed Saudi commercial bank. Saudi stock exchange Tadawul introduced a new chairwoman — Sarah Al-Suhaimi — and Latifa Al-Sabhan was named CFO of Arab National Bank.

Bessma Momani, a professor at the University of Waterloo in Canada, said of the recent appointments and legal amendments: “It’s driven by necessity — the necessity of recognising that economically the exclusion of women is basically keeping 50 per cent of its economic potential completely dormant.

“For decades, Saudi has been trying not only to diversify [its portfolio] but also trying to find a way to tap into its existent resources and known input goods. What it has is human capital and talent that is underutilised.”

Qatar Airways CEO sorry for hostess slur

The chief executive of Qatar Airways has apologised for comments he made about US flight attendants that were condemned as both sexist and ageist. CEO Akbar Al Baker (below) described the American airline industry as “crap” and said passengers are “always being served by grandmothers”.

Al Baker made the remarks in Dublin, while speaking at an event commemorating Qatar Airline’s new flight route between Ireland’s capital and Doha, Qatar.

In a letter to the US trade union body, the Association of Flight Attendants (AFA), Al Baker later said: “For the cabin crew serving aboard all air carriers, professionalism, skill and dedication are the qualities that matter. I was wrong to imply that other factors, like age, are relevant.”

Iran Air appoints first female CEO

Jordan updates governance instructions

Iran has appointed a female chief executive to lead its national airline for the first time since it was established in the 1940s.

The state-owned Iran Daily announced that the transport minister had named Farzaneh Sharafbafi, who holds a PhD in aerospace engineering and previously served on the board of Iran Air.

According to the Associated Press, Iran President Hassan Rouhani, who was re-elected earlier this year, has recently appointed women to a number of management posts, breaking with tradition in the Islamic republic.

The Jordan Securities Commission (JSC) has issued compulsory corporate governance instructions for listed shareholding companies, The Jordan Times has reported.

Previous JSC governance instructions for companies on the Amman Stock Exchange, which were issued in 2009, were voluntary guidelines.

JSC chief commissioner Mohammad Hourani said the instructions, which he described as in line with international practices, would further protect investors and improve the investment climate in Jordan.

Saeed Mohammed Al Tayer

MD & CEO, DEWA

DEWA: Standing for generations to come

Ethical Boardroom talks to the head of the Dubai Electricity and Water Authority on the company’s mission to become a sustainable and innovative world-class utility

Ethical Boardroom: Dubai Electricity and

Water Authority (DEWA) recently conducted

a periodic review of its corporate governance system. What steps have been made to ensure its effectiveness going forward?

SAEED MOHAMMED AL TAYER: DEWA’s corporate governance framework includes a range of elements, such as IT governance, internal governance, sustainability governance, water governance and project governance, which are constantly reviewed and updated.

DEWA follows the rollout of research and guidance issued by organisations, such as the World Bank, United Nations, the Organisation for Economic Co-operation and Development (OECD), the International Monetary Fund (IMF) and the International Finance Corporation (IFC), as well as various energy agencies and regulators worldwide. The comprehensive review of our governance is an ongoing exercise which must happen at least twice a year. All progressive organisations that seek to implement corporate governance best practices should conduct periodic reviews to inculcate good governance practices.

These reviews and focus on governance have already delivered positive results. In terms of financial robustness, DEWA is the only government body in Dubai with credit ratings and has continually advanced its ratings since 2010 based on its strong financial performance, with a Baa1 rating from Moody’s and BBB+ from Standard & Poor’s.

DEWA has also won numerous awards and certifications. These are achieved only if the corporate governance framework, policies and processes are maintained and up to date.

EB: Why is it essential for a state-owned enterprise, such as DEWA, to have in place a modern and advanced governance system?

AT: Good governance is essential for any organisation and more so if it is a public organisation. DEWA is committed to good governance as a strategic objective and as a core value of its principles. This is essential for any utility, whether publicly or privately owned. This has been supported by the OECD, showing the need for good governance in transparency, good governance and state-owned enterprises (SOEs) in its sustainable growth.” DEWA considers Guidelines on Corporate Governance for innovation a key strategic role, as shown State-Owned Enterprises, released in 2015. by its vision to become a sustainable The traditional concept of good corporate innovative world-class utility. governance being a necessity for listed DEWA takes pride in being a leader in the companies has changed considerably and now implementation of good governance, with the ‘governance of things’ is essential for all the UAE announcing its being a leader in organisations, whether corporate, listed or the implementation of the fourth industrial government-owned. revolution, DEWA is working to ensure that

DEWA has pioneered good governance corporate governance is agile and dynamic, and adopted its own framework more than a by applying innovative approaches to ensure decade ago. This framework has the four basic better compliance and oversight. This requires pillars: accountability, transparency, that it cannot be relegated to committees responsibility and fair practices, and polices but has to be all of which are embedded in DEWA has practised and proclaimed. the corporate culture of DEWA. The board, MD & CEO, and management oversee the included strategic Good governance is not just a part of our culture at DEWA, it is also one of our core effective implementation of these pillars and lead the way to establish DEWA as one of objectives within its values, and DEWA aims to set the pace for the best governance practices of the fourth the most trusted and respected strategic map industrial revolution. organisations in the region and instil a culture of good that focus on EB: Please tell us about governance at DEWA. envisioning DEWA’s Strategic Plan These in turn have enabled DEWA to forge strong relationships with its the future, innovation and 2021 and how is it aligned to the Dubai Plan 2021? AT: DEWA is committed to stakeholders, based on trust and accountability. DEWA has identified seven stakeholder happiness of stakeholders achieving the objectives laid out in the Dubai Plan 2021 that were unveiled by HH categories. These include Sheikh Mohammed bin Rashid customers, government, employees, partners, Al Maktoum, to become a smart and suppliers and sub-contractors, investors, and sustainable city, as well as being sustainable society and future generations. with its resources. This has shaped our vision to become a sustainable innovative EB: Corporate governance in the UAE world-class utility that implements is constantly evolving. What is DEWA world-class governance and management doing to stay ahead of the curve? standards within the DEWA 2021 strategy. AT: One of the main reasons for this evolution Alignment is essential to our strategic is the onset of disruptive technologies and planning, which is one of the reasons why the increased application of innovation, DEWA is a strategy-focused organisation especially in Dubai. In the words of HH Sheikh that was the first in the region to be inducted Mohammed bin Rashid Al Maktoum, Vice into the Palladium Hall of Fame for strategy President and Prime Minister of the UAE and planning and execution. DEWA’s alignment Ruler of Dubai, “The UAE attracts great minds to the Dubai Plan 2021 is based on delivering because they value opportunity, quality of life, on one of its key objectives that Dubai

becomes transparent and reliable, which is a key objective of the government pillar for a pioneering and excellent government. in turn based on a comprehensive governance framework.

EB: DEWA has an established best-in-class risk management structure. Is having a coherent enterprise-wide strategy essential to DEWA’s growth?

AT: Risk management and a well-designed enterprise risk management (ERM) programme are essentials of modern organisations. The OECD has also highlighted the need for a well-designed risk management process as a part of an organisation’s governance framework. DEWA’s ERM clearly identifies the various risks that the organisation faces today and those anticipated in the immediate future. DEWA has outlined its risk mitigation and risk appetite definitions to support this.

EB: Cybersecurity is a global issue affecting companies large, small, private and state-owned. Can you tell us about DEWA’s cyber risk strategy?

CEO: There are increasing challenges and threats with the rapid developments in technology and the accelerating growth of smart transformation and the spread of technologies, such as the Internet of Things. Cyberattacks are estimated to cost companies around the world $300billion annually as almost one million new pieces of malware, computer viruses or other malicious software are created every day. The economic cost of cyberattacks, cybercrime and scams, are expected to reach $3trillion by 2020.

Cybersecurity has become a key requirement for smart cities. That’s why DEWA is looking at the latest updates and adopting the best international practices in cybersecurity.

EB: Can you tell us why it’s important to have CSR at the heart of your operations?

AT: At DEWA, we are committed to giving back to the society and communities in Dubai. From an early stage, we have adopted an explicit policy for corporate social responsibility (CSR) aligned to international best practices. We have also set an integrated framework, which meets CSR standards, as we realise that our contribution to the local communities is essential. This framework includes social initiatives that are aligned with the UAE Vision 2021, the Dubai Plan 2021, and the DEWA Strategy 2021. In order to develop and implement our CSR strategy, we identified the actual needs of our stakeholders and developed an action plan around those needs. This maps out our objectives for sponsoring, implementing and assessing our internal and external CSR initiatives, and figuring out how they are meeting our stakeholders’ needs.

The Higher Committee of the Year of Giving at DEWA has approved 12 main programmes to provide 27 social and humanitarian initiatives, covering the three themes of the Year of Giving in the UAE.

DEWA’s CSR efforts have contributed to an increase in community satisfaction and happiness levels from 82 per cent in 2013, to 89 per cent in 2016. DEWA also received many international awards and certificates in CSR, including the MVO8000 global certification in CSR, becoming the first government organisation in Dubai to receive this global recognition.

EB: What does it mean for DEWA to have received the BS 13500 certification – the code of practice for effective organisational governance?

AT: I recently honoured the management team who took part in getting the BS 13500 code of practice for delivering effective governance of organisations’ certification. Obtaining the BS 13500 certification was based on their hard work and commitment to ensuring good governance is at the heart of our operations, and an established part of our culture at DEWA.

EB: Why is DEWA making clean energy a priority?

AT: It’s one of the prominent ways of using energy sources in the UAE as the country is located within the world’s sun belt. In Dubai, the potential of solar power can be harnessed by photovoltaic technology, reaching 2,150 kWh per square metre per year, while the direct part of the energy that can be used in concentrated solar power (CSP) technology is about 1,850 kWh per square metre per year. Such features further promote the use of solar energy in the Emirate.

Dubai launched the Dubai Clean Energy Strategy 2050 in 2015, to increase its share of clean energy in the energy mix in Dubai to reach 75 per cent by 2050. DEWA will achieve this with the Mohammed bin Rashid Al Maktoum Solar Park going on stream, which is part of the infrastructure pillar that is one of the five main pillars of the Dubai Clean Energy Strategy 2050. These five main pillars are: infrastructure, legislation, funding, building capacities and skills, and having an environment-friendly energy mix. The Mohammed bin Rashid Al Maktoum Solar Park is the largest single-site solar park in the world, with a planned capacity of 1,000 MW by 2020 and 5,000 MW by 2030, with a total investment of AED 50billion. This will eventually save approximately 6.5 million tonnes per annum in emissions.

DEWA intends to build the largest CSP project in the world, based on the independent power producer (IPP) model. DEWA has received the lowest international bid for its CSP plant at USD 9.45 cents per kilowatt hour. It will be operational by April 2021. DEWA will generate 1,000MW using this technology by 2030.

DEWA gives its customers the chance to produce clean energy following the resolution issued by the Dubai Executive Council to integrate electricity produced from photovoltaic panels with the power distribution system in Dubai. The resolution formed a comprehensive legislative framework to connect electricity produced from solar power to the distribution system. The resolution supports the Smart Dubai initiative launched by HH Sheikh Mohammed bin Rashid Al Maktoum, to transform Dubai into the smartest city in the world and encourages customers to produce clean energy. This engages the community in the production of electricity from solar energy, diversify energy sources by increasing renewable energy targets, preserve the environment and lower the country’s carbon footprint, while also encouraging the development of a green economy to achieve sustainable development.

DEWA’s Shams Dubai initiative also allows customers to install photovoltaic panels on their rooftops to generate electricity from Highness launched to make Dubai the city of the future by bringing about comprehensive change in the government work system, and developing innovative ideas and future plans.

We work to keep pace with the Fourth Industrial Revolution and make use of disruptive technologies in the generation, transmission, and distribution of electricity and water, to provide world-class services that make life better for the citizens, residents, and visitors of Dubai, and provide electricity services that meet the highest standards of availability and reliability.

DEWA has incorporated innovation in its vision and raised its importance to encompass 40 per cent of DEWA’s strategic map. DEWA has also included strategic objectives within its strategic map that focus on envisioning the future, innovation and happiness of stakeholders to achieve DEWA’s vision to become a sustainable innovative world-class utility and the Dubai Plan 2021 to make Dubai a city of happy, creative and empowered people.

At DEWA, we have always invested in developing people who are capable of spearheading research and development in clean and renewable energy to further preserve natural resources and protect the environment. DEWA has launched several promising programmes, initiatives, and projects to achieve this goal, including

MORO, which specialises in providing information storage services, cloud computing, and IT for the public and

DEWA IN CONTROL

Warsan control centre

CLEAN ENERGY

Mohammed bin Rashid Al Maktoum Solar Park

solar power. The electricity is used onsite and the surplus is absorbed into DEWA’s grid.

EB: How will innovation make a difference in your strategic priorities?

AT: At DEWA, we work according to the directives of HH Sheikh Mohammed bin Rashid Al Maktoum, to promote Dubai’s global leadership and to continue the path of leadership and excellence to reach number one globally. We continuously review our work processes and procedures to maintain our lead, in line with the 10X initiative, which His private sectors in the UAE and the region. These efforts support the National Innovation Strategy to make the UAE one of the most innovative countries in the world in support of the Smart Dubai initiative, to make Dubai the smartest city in the world.

We still look to new ideas and disruptive technologies that will shape and change our future. Innovation will continue to make a difference as long as we adhere to a culture of innovation, because we owe it to our children, and we stand by our motto: ‘for generations to come.’