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Back to Global Corporate Governance Trends for 2024
Keeping pace with regional economic, diversity, and governance ambitions
In recent years, the UAE corporate governance landscape has undergone significant transformation, driven by the region's burgeoning economies and the imperative for increased foreign direct investment. Several key factors have shaped and continue to influence corporate governance practices in the Middle East, particularly in the UAE.
In 2020, the UAE Securities and Commodities Authority (SCA) introduced guidelines mandating that women comprise at least 20% of every board. This directive underscores the commitment to gender diversity, requiring companies to disclose representation percentages in annual governance reports and establish gender diversity policies. We expect diversity to continue to be top of mind for boards in 2024.
In 2023, the UAE implemented a Federal Corporate Tax on company profits for the first time. Looking ahead, boards now bear the responsibility of ensuring compliance and implementation across organizations, and we expect these financial implications to require more board attention this year.
In the face of economic uncertainties, UAE organizations are also increasingly recognizing the need for robust board evaluations. With an aim to ramp up the stature of corporate governance, these evaluations will be seen as tools to enhance transparency, accountability, and decision-making effectiveness, as well as address diversity gaps within the board.
Influx of foreign capital
In October of 2023, The Financial Action Task Force (FATF)—the global money laundering and terrorist financing watchdog—confirmed that the UAE had satisfied its action plan and was scheduled (subject to successful onsite inspection) to be removed from the “grey list” of jurisdictions subject to increased monitoring at its next plenary meeting in February 2024. The UAE has been subject to increased monitoring since June of 2022, due to perceived deficiencies in the effectiveness of its anti-money laundering and countering the financing of terrorism (AML/CFT) regime. With the FATF’s decision to remove the UAE from the grey list, experts predict that the region will see increased foreign investment by 2024.
Evolving crypto/blockchain and NFT regulatory environment
Over the last few years, the UAE progressively and proactively sought to position itself as the regional hub for technology, with the objective of becoming a pioneer in blockchain innovation. The country is host to several cryptocurrency exchange and trading platforms, and has issued regulations governing them and established authorities—such as the Virtual Assets Regulatory Authority—to monitor and supervise dealings concerning virtual assets (including crypto currencies) in Dubai. Furthering this objective, the UAE made several announcements and developed additional regulations during the first half of 2023 directly relevant to the crypto universe. In 2024, the region seeks to continue innovating in this arena, with the aim of responsibly unlocking further economic potential.