A new corporate code in Bahrain reflects efforts to build the optimum business environment for companies doing business both in and from the Kingdom, Kamal Ahmed, Chief Operating Officer of the Bahrain Economic Development Board (EDB), said today.
The Corporate Governance Code of the Kingdom of Bahrain, launched this week by Industry and Commerce Minister H.E. Dr. Hassan Fakhro, is designed to strengthen the country’s position as the most established financial centre in the region and the gateway to the trillion dollarGulf market. Described as the completion of an eight-year journey in its own right, the Code is the latest step in a much longer track record for effective regulation to benefit business, said Kamal Ahmed.
“In Bahrain, our strong track record and long term strategy of economic diversification is backed by the highest and most transparent regulatory and supervisory standards. This Code is another example of our efforts to create a legal and regulatory environment that is supportive, firm and fair, and which provides the support to make doing business both in and from Bahrain easier. This approach has formed the basis for the steady growth of our own financial sector over the past 40 years and is now central to achieving the ambitions of Vision 2030.”
The Code is a set of high level principles for companies, their boards and management to follow, complete with directives and recommendations on applying each principle. It has been devised by the Central Bank of Bahrain (CBB) in consultation with the industry and the OECD and benchmarked against more than 25 codes from other countries.
Kamal Ahmed added: “Sensible regulation is imposed only after consultation with the industry, so the rules are practical and prudent, safe and consistent. The CBB – the only single regulator in the region and widely considered the best and most progressive – has a reputation for consulting widely in devising its regulations and applying them uniformly, with no exceptions.”
Speaking at the launch, CBB Governor H.E. Rasheed Al-Maraj said it was important that public companies, both financial and non-financial, enter into the spirit of the new Code: “The need for high standards of corporate governance is one of the main lessons to be drawn from the global financial crisis. It is in this context that the CBB views the new code as a significant development in strengthening Bahrain’s reputation as a well regarded financial centre. It should not just be seen as a matter of complying with another set of regulations but as something that should influence the corporate culture of companies in Bahrain.”
He had previously told CNBC Europe’s “Closing Bell” that efforts to make Bahrain’s economy more business friendly had attracted growing interest from the Gulf and beyond. In an interview from the World Economic Forum (WEF) Annual Meeting in Davos in January, he said: “We try to make our economy and our country more business friendly by putting in the right legal and regulatory (measures) to ensure that there is an environment conducive for doing business. Over the years, we have seen growing interest not only from the region itself but also from outside looking into Bahrain, because we have been doing this for the last four decades.”
H.E. Dr. Hassan Fakhro commented: “There can be no better time to introduce a corporate governance code than now. The Code will help strengthen our position in Bahrain as a business and financial centre and underpin our regulatory success in avoiding excesses, speculation and abuses that have been a characteristic of other countries that – with the hindsight of the global financial crisis – are now suffering as a result.”
Earlier this month the CBB had presented the Code to top banks and regulators from across the region at the 3rd Annual Middle East Risk Management Forum.