Afroditi Boura, Senior Governance Risk and Compliance Officer at Equiom Corporate Services (Middle East) Ltd highlights the importance of good governance and the impact of the ‘Corporate Governance Standards for Insurance Companies’ circular that was released by the Central Bank of UAE very recently.
Good governance is not a choice. It is a basic requirement set by the regulatory authorities, the business community, the employees, and the stakeholders of each organisation. Good governance means that the decision-making process is based on norms, culture and ethos which create and maintain the value of the organisation consistently with the expectations of its stakeholders.
The Central Bank of U.A.E. has released the “Corporate Governance Standards for Insurance Companies” (Circular No. 24/2022) (“Standards”), which are effective immediately. This is the first time that the insurance industry has been set Standards of Corporate Governance, and this is significant progress towards transparency, well-informed decision-making, clearly defined responsibilities for the Board of Directors (“Board”) and expresses high expectations from the stakeholders.
The Standards oblige all the insurance companies in U.A.E. to design and incorporate a corporate governance framework, which will be incorporated into the other systems of the organisations and will govern, at a Board level, the following:
- roles and responsibilities
- authority matrix/delegation of authorities
- risk and compliance governance
- conflict of interest
- code of conduct
- data protection and exchange of information
- internal audit
- transactions with related parties
- oversight of the senior management
- corporate culture, strategy, and objectives
- composition of the Board
- how Directors will be deemed fit and proper (training and background)
- evaluation of the Board and the Board committees,
- formation of Board committees
- equality (representation of female Directors); and
- corporate disclosures, etc.
Insurance companies (branches are also included), must immediately create their local governance framework, which will be tailormade to the size and complexity of their organisation. The Standards expect international insurance companies to establish local governance frameworks for U.A.E. The Board of Directors has the full responsibility of creating and maintaining this framework at all times.
Why choose Equiom to support your corporate governance?
The landscape of corporate governance and internal controls has become more complicated and aligned to international best practices. Equiom has a specialized team with long-standing experience in the insurance industry and corporate governance codes. Equiom can assist to design and implement the governance framework based on the needs of your organisation, conduct a gap analysis, create/amend policies, processes, registers and templates, conduct Board assessments and train the stakeholders based on the new regulatory requirements.
For more information about how to address your organisation’s governance and compliance needs contact us.
This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The article cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Equiom to discuss these matters in the context of your particular circumstance. Equiom Group, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.
For information on the regulatory status of our companies, please visit www.equiomgroup.com/regulatory