Oversight of public companies is improving in the GCC but the region's boards of directors still lag far behind those in the developed world, says a survey from the GCC Board Directors Institute in Dubai.
This year's survey - the second conducted by the institute, also known as the BDI - found the Gulf's biggest public companies were improving marginally on indicators including disclosure of board composition and appointment of independent directors.
Mostly, however, the region was behind Europe despite a long-standing push to improve corporate governance.
"We're not talking about the same things they're talking about in the US and the EU," said Nick Nadal, the director of the Hawkamah Institute for Corporate Governance in Dubai. "There's no discussion on pay here and there are no discussions about remuneration practices.
"We are still at a discussion of what is corporate governance and what should we be disclosing as part of our responsibility to the market. We're at the evolutionary stage and we're going to the next steps in the evolutionary process."
Many countries in the Gulf have made strides in recent years towards improving governance at regulated companies. Regulations have been enacted by most of the six GCC countries in the past two years, including most recently by Bahrain.
The new rules typically require companies to report more information on the composition of their boards and hire a minimum number of directors who are independent of the company and its management. The point of such changes, observers say, is to attract more investment into the region.
Well-governed companies "are likely to enjoy a lower cost of capital as investors will see their investments as being at a lower risk", Abdullatif al Othman, the chairman of the BDI and the senior vice president of finance at Saudi Aramco, said in the survey.
"Investors who do not feel confident in a company's ability to protect their investments will demand a premium, or look elsewhere for investment opportunities."
While many companies improved disclosure about their boards between 2009 - when the BDI conducted its first survey - and this year, the institute found fewer of the Gulf's biggest companies were disclosing how they paid their board members.
It also found independent directors were more common and committees on strategy and risk were more numerous. But women were still rare on Gulf boards.
afitch@thenational.ae