Corporate governance in the Middle East – Which way to go?

Abstract

The Interest in corporate governance is not a new phenomenon in the transition economies of the Middle East, but corporate governance is especially important in these economies since these countries do not have the long-established (financial) institutional infrastructure to deal with corporate governance issues. This article focusses on a cross-country analysis of the most important topics in corporate codes – shareholder rights, board systems and executive remuneration. By analysing three representative MENA countries, we discuss if codes based on directives or standards are better for these economies. The introduction of corporate governance codes for these economies seems useful but should not rely on broad standards but on legally enforced binding rules accounting for the discussion of directives versus standards. The paper argues against the blindfold implementation of corporate governance codes and argues for country specific solutions.