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Corporate Governance CIPE – EJB

Corporate Governance CIPE – EJB. Presented By: Eng. Hassan El Khatib EJB Secretary General Tunisia, 2008. EJB – Who Are We?.

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Corporate Governance CIPE – EJB

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  1. Corporate GovernanceCIPE – EJB Presented By: Eng. Hassan El Khatib EJB Secretary General Tunisia, 2008

  2. EJB – Who Are We? The EJB is a dynamic organization that works as a forum for business people committed to developing an outstanding culture of excellence while taking an active part in the overall development of Egypt.

  3. EJB Councils Community Dev. B. Affairs B. Environment ENCC NBA Corporate Governance Entrepreneurship CSR Mega Projects Egypt’s Vision 2030

  4. EJB has succeeded in: Promoting Leadership: • Corporate Governance, CG • Egypt’s Vision 2030 • Entrepreneurship Promoting Innovation: • Egyptian National Competitiveness Council, ENCC • Corporate Social Responsibility, CSR Encouraging Alignment: National Business Agenda, NBA Agility:Create a Sense of Urgency

  5. Agility Today, EJB has engaged the private sector in all the initiatives to widen the constituency and strengthen lobbying and advocacy efforts.

  6. Why Was Corporate Governance chosen?

  7. Why Corporate Governance? • To create a sustainable and sound business environment based on the core principles of corporate governance, accountability and transparency. • Sound corporate governance is crucial, not only for private sector development, but also for economic growth. • Promotion of a Democratic community.

  8. Why Corporate Governance? • Assures more access to finance, thus enhancing growth. • Secures efficient management of a corporation. • Essential for establishing an attractive investment climate characterized by competitive companies and efficient financial market.

  9. Why for Family Firms? In EJB • EJB member companies are characterized by the domination of family businesses in economic activities. • Most of those family businesses face challenges because of the differences in the attitude & aspirations of family members. Some sacrifice the business to keep the families together, while others sacrifice the family to keep the business succeeding and eventually the family becomes entangled in the "Family First / Business First" phase. In Egypt • According to research, Family Businesses contribute from 60% to 70% of GDP of most developed & developing countries and that just 13% of the Family businesses survive till the 3rd generation & only 4% percent go beyond it and that one - third of family businesses disintegrate because of generational conflicts. • Studies indicate that only about one in six family-run firms survive to the third generation. • Not only to operate the business and to promote family harmony. • Mediterranean Culture.

  10. A Close Up on the Program OBJECTIVE “Getting the members interested in CG and its significance and importance.” “To engage the private sector in active civic participation “ HOW Develop a manual for best practices (How to implement) WorkshopsRoundtables (Awareness) (Identifying Solutions) Engage the media (Encouraging Implementation)

  11. Awareness Campaign • The First Workshop: Enhancing Growth through Corporate Governance. • The Second Workshop:Family Business Governance. • The Third Workshop:Securing Efficient Management through Corporate Governance. • The First Roundtable:Family Business Governance & Preparing for Transformation. • The Second Roundtable:Structures of boards for family businesses & appointing independent directors. • The Third Roundtable:Steps towards family business transformation & the benefits of going public. • Corporate Governance Conference: “Corporate Governance… The Future for Family Firms“.

  12. CG Manual for Family Businesses • The G – Phase 'Get to Know‘: knowledge building phase. • The A – Phase 'Apply Your Knowledge‘: becoming familiar with the intended business environment regulated by Corporate Governance Standards. • The M – Phase 'Manage your challenges‘: understanding the nature of challenges that face the family business. • The E – Phase 'Evaluate & Reiterate‘: beingcapable to build the yardstick of evaluating the process that the family business has been going through and contribute to proposing solutions. • The EJB Corporate Governance Manual is the first of its kind to be developed in Egypt & the Middle East.

  13. Challenges • It has been observed that most families experience resistance: • To delegate authorities. • Towards the entry of younger family generations into the business. • When dealing with succession problems and compensation of non – active family members. • The existence of psychological barriers between family and non – family members.

  14. Results & Impact • Among the attendees • 69.5% were members of family owned firms • 25% were Private Enterprises • 22% were joint stock companies • 12.5% were financial corporations not listed in the stock exchange • 6.25 % were representatives from banks • 6.25% were financial corporations listed in the stock exchange • 1% Non Governmental Organizations. • Target attendance to all events was 25 / 30. Yet it ranged from 80 / 40. • In the final conference, when participants were asked of their level of understanding of Corporate Governance, 87% of the responses were "high" and the rest was "moderate". • Now, EJB members are presented in the Egyptian Institute of Directors as a member of trustees

  15. Lessons Learnt • Owing to the fact that the term 'Corporate Governance' is sometimes skeptically received from the business community especially when some translate it as letting go of power, the EJB found importance in creating awareness on the term itself then, focusing on the cost of compliance which is found negligible when compared to the cost of not adopting to the principles of CG.

  16. Feedback from Partners • "The positive step taken in the EJB is that it has created awareness for the appropriate people who are willing to accept the concept and begin adopting it, which are the junior business society. H.E. Dr. Ahmed Nazif – Egyptian Prime Minister • "Of all the Business Associations worked with around the world, EJB is ranked in the top rank" Dr. John Sullivan – CIPE Executive Director • "The EJB is the perfect example of an NGO, and what is so distinguished about it is the governance inside the EJB itself" H.E.Eng. Rachid Mohamed Rachid – Egyptian Min. of Trade & Ind. • “The manual is a great start… however we will never reach the optimum solution, we will always improve by the day. Whether it is a family business or otherwise, the end game is the same… Corporate Governance is the only way to go.” Mr. Yasser El Mallawany – EFG Hermes Chairman

  17. Thank You

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