Developing effective boards in the GCC

By: Editor In Chief
    
Fri 23 January,2015

Nathalie Potvin Picture ii
Nathalie Potvin Executive Director of the GCC Board Directors Institute




Filed Under: Business & Economy

Nathalie is the Executive Director of the GCC Board Directors Institute, a not-for-profit organization launched in 2007 by regional flagship corporations to enhance board member capabilities, create a strong and influential regional network of board members, disseminate corporate governance knowledge and lead the regional debate on emerging best governance practices.

 

Born and raised in Canada, she has more than 15 years of experience in the nonprofit and public sectors in the UAE, Canada, Hungary and United States, and is a chartered Board secretary from the UK’s Institute of Company Secretaries & Administrators.

 

Under her leadership, the GCC Board Directors Institute has become the leading organization in the Gulf for Boards and directors. Till date, the Institute has delivered over 35 workshops to senior board directors. It counts over 500 members who, through their membership in the Institute, have gained access to an exclusive network of like-minded board directors and business leaders.

 

How would you introduce the GCC Board Directors Institute? What type of services and programs do you provide?

The Institute was established in 2007 as a regional platform to help board members enhance their knowledge and capabilities and to put the topic of governance higher on the region’s agenda. At that time, governance was not a priority for most organizations and boards and board members had limited options for development. Our founding partners – Investcorp, SABIC, Saudi Aramco and Emirates NBD – recognized the need and with the help of four advisory firms – Allen & Overy, PwC, Heidrick & Struggles and McKinsey & Company – formed what is today the GCC Board Directors Institute.

 

We held our first workshop in December 2007, and have since created a unique training and networking platform for all our members. There is an increasing demand for our programs and today BDI has by far the largest network of board members in the region. This is something we are extremely proud of.

 

The Institute also seeks to contribute to the pool of knowledge related to governance, as fairly little is known about the manner in which boards in the Gulf operate. We just launched our fourth report on Board effectiveness in the Gulf. The full report is available in both English and Arabic and can be found on our website gccbdi.org.

 

What does it take to be a successful Board member in the GCC? And what advice would you give to aspiring Board members, especially women?

I think it is preferable – and more pertinent - to assess Board members from a “fit” and “effectiveness” perspective. One of the prerequisites for a board to be effective is that it should be comprised of a diverse team, i.e., individuals that bring a diversity of skills, knowledge, and experience. The mix ought to be relevant to the company given its position in the market, its growth objectives and so on. For example, a successful family-owned business with activities in the Gulf and sub-continent seeking to enter the North American market would greatly benefit from having someone on their board with this type of experience. Similarly, a private company with ambitions to go public in the short term will be better off with board members who can swiftly navigate that transition. Candidate A can be an excellent fit for the board of the family-owned business but not so much for the company who aspires to go public. But it does not mean Candidate A is or is not “successful”.

 

I suppose the true test for a Board is when a company is facing real internal or external pressures. A good Board will be able to steer the company through the down cycles.

 

As for aspiring board members, my advice would be to first focus on gaining solid experience as an executive and later on, before accepting your first board role, to enroll in development programs specific to directorship. This advice applies equally to male and female aspiring board members. For women in particular, I think it is important to have sponsors in the organization that will give them the opportunity to rise and take on more senior roles.

 

Is the importance placed on Boards in this region different when compared to Europe or the US?

Although we’ve seen significant progress since we started our activities, governance and board effectiveness are more prominent topics in mature economies than they currently are in the region. If you look at the UK, USA or Australia, for example, companies started to pay attention to how their boards operate decades ago.

 

I would reckon governance became an important topic in the region in the last couple of years. The crisis has helped to raise awareness, and in this respect, the region is not much different from any other jurisdiction. Every economic and/or financial crisis highlights how challenging it is to instill a culture of strong governance practices throughout an organization. And every crisis serves as a catalyst for companies to review their practices. 

 

Governance is rooted in law which explains some of the differences between countries. The UK, Germany and the Netherlands use a principle known as “comply or explain”. Rather than setting out binding laws, regulators set out a code, which listed companies may either comply with, or if they do not comply, explain publicly why they do not. The Central Bank of Bahrain has adopted a similar approach.

 

Having been in operation for 7 years, what is next for the Institute? And what changes will you be personally driving for in 2015 in your role as Executive Director?

We have had an incredible journey so far, and have just reached 500 members. With an expanding membership base, we are extending our training program this year to include mini workshops on specific topics of relevance to board members and senior executives who interact with the board.

 

Another key objective for us this year is to provide more services to our members. Our members expect more from us to help them and their boards. As such, we will be launching additional networking events and mentoring platforms. We continually and proactively monitor the evolving needs and expectations of our membership base to match their expectations and interests.

 

Importantly, we will also continue to provide a voice for our members among the region’s leadership, policymakers and lawmakers. Our report on Board effectiveness in the Gulf – which we conduct every two years and serves to track the evolution of board practices in the region – is the only report of its kind that sheds some light on how boards operate.


You have 15 years of experience in the nonprofit and public sectors in the UAE, Canada, Hungary and United States. What are your insights on what it takes to work for a nonprofit and on whether the UAE differ from other countries?

I spent a few years in the corporate sector before transitioning to the not-for-profit industry. From the moment someone is passionate about a specific cause, be it education, providing access to fresh and potable water, or else, non-profit work allows someone to channel this passion and put it to great use. It brings a tremendous sense of satisfaction and accomplishment. 

 

I see differences from region to region. For example, in Canada, governments are retracting from specific sectors or services, and it is not rare to see nonprofits fill the gaps. Here in this region, I see more charities focused on what I would call traditional causes such as helping people in dire need for food, shelter, water and so on. So there are indeed differences from that perspective.

 

The Gulf is faced with many challenges. How involved are companies and institutions in discussing CSR, sustainability and youth development at Board level? In your experience, do these subjects actually make it to the Board’s agenda or is it contained at management level?

Corporate Social Responsibility is an interesting approach which emerged in the last few decades but I think many things tend to be bundled under CSR. The core principle here is to encourage a positive impact on the environment and stakeholders (typically, suppliers, consumers, employees, investors, communities and so on). I personally think CSR is an approach to doing business that is more “mature” than the traditional view which is that a company’s raison d'être is to generate an adequate return for its shareholders. But CSR is an approach that needs to start with the board if it is to be successfully embraced and adopted by any organization.

 

In our work, we see companies that are starting to look at their operations from this perspective. I suppose the challenge is that it needs to be embraced holistically, and not used as part of a marketing strategy.

 

I am very impressed by the number of people in this region, particularly in the UAE, getting involved in nonprofit projects.  This is one of the things that struck me when I moved to the GCC. The generosity of the people is simply remarkable.

 

 




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