New Pearl Initiative Report Highlights Role Of Corporate Governance In Driving Sustainable Funding

An absence of talented and experienced employees, funding difficulties and the prevailing negative economic outlook are the main challenges that affect micro, small and medium enterprises (MSMEs), according to a new report by the Pearl Initiative, the leading Gulf business-led non-profit organisation promoting a corporate culture of accountability and transparency as a key driver of competitiveness across the region.

Titled ‘Driving Value from Good Corporate Governance’, the report was compiled from the findings of a survey that analysed the state of corporate governance in more than 1,000 MSMEs across the GCC region and the key obstacles they face.

Demonstrating ambitious plans for growth, 89 per cent of respondents reported their plan to raise capital in the next one to two years, even as they face slow economic growth. On average, 50 per cent of those surveyed confirmed the existence of corporate governance documents within their firms, although only 30 per cent acknowledged the implementation of these (i.e. Delegation of Authority, Audit Reports, Risk Reports and Staff Feedback), and even less admitted to proper auditing of documents. The findings indicate clear challenges for MSMEs in the region, with business reputation, financial performance, ethics and social responsibility emerging as crucial factors in attracting investors and long-term funding.