Muscat Seminar Convened on Good Governance in Banks and Financial Institutions
01 Jun 2003MUSCAT - The Central Bank in Muscat, Oman, on June 1, 2003, held a seminar on good governance in financial institutions and banks, under the patronage of His Excellency Mr. Hamoud Alzadjali, Executive President of the Omani Central Bank, and under the chairmanship of Mr. Talal Abu-Ghazaleh, Chairman of the Commission on Telecommunications, Information Technologies and E-Business, International Chamber of Commerce (ICC) and Chairman of the Arab Society of Certified Accountants (ASCA). The seminar was also attended by the executive president of the stock market commission, CEOs and board members of financial institutions and banks.
The discussions were focused on the board of directors and executive management, in addition to the role of the central bank in the working system of financial institutions. In this area, Mr. Abu-Ghazaleh pointed out to the benefits of standards relating to the organization of companies, and said that a company which possesses a refined structure is more sensitive to the needs and objectives of its shareholders, while enhancing their trust in the company, since this organized entity is considered an effective weapon that prevents fraud. This also makes the company more sensitive to factors that may endanger its activities, according to Abu-Ghazaleh.
He added that by “reducing this level of danger in the business, access to financial markets becomes easier, and the acceptance of the market of these companies improves”.
Abu-Ghazaleh went on to elaborate that we live in the electronic age, where data can be recorded and compiled in an effective manner, and that the communications of a company plays an important role in achieving this.
Speaking about the best practices related to the roles and responsibilities of the board of directors and the executive director, he stated that individuals must take responsibility, and that control over the formulation of decisions isn’t confined to one person or group. He said that there must be clear paths of responsibilities and powers, and that one of the main jobs of the chairman is to formulate the general policy such that it is clear and available to the board of directors, with the aim of fulfilling the interests of others efficiently and ethically.
In conclusion, Mr. Abu-Ghazaleh confirmed that no one really objects to the idea of good governance for companies and particularly in the banking sector, which plays a vital role in economic and social development, adding that social progress cannot occur without economic progress, and that banks and industrial sectors are depended upon greatly to achieve this goal. He further stated that this doesn’t mean that we necessarily need to accept current standards being used, without thinking about the appropriate way to make these standards adjustable to our culture and traditions.
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