More than 98 percent of commercial entities in Palestine are not covered by existing corporate governance codes, which apply to companies listed on the Palestine Stock Exchange and commercial banks. Most of these are structured as family firms — whether in ownership or management — which creates special difficulties for corporate governance.
To address the thousands of family firms that form the heart and soul of the Palestinian private sector, CIPE partner the Palestine Governance Institute (PGI) recently published a Corporate Governance Manual for Family Firms (available in Arabic and English) with the Federation of Palestinian Chambers of Commerce, Industry and Agriculture.
This seminal publication — the first of its kind in Palestine — was informed by extensive consultations with local experts, family firms themselves, and other stakeholders including lawyers and academics.
PGI engaged in extensive outreach to the business community in developing these guidelines, including conducting a baseline assessment through interviews with over 100 owners and managers of family firms across the West Bank and Gaza. The corporate governance manual helps fill the governance gap by providing a well-defined framework that will guide the owners and managers of family firms through their options for governance reform in such areas as: the legal form of the company, board functions, committee structures, management models, sustainability, internal controls, risk management, transparency, evaluation, and accountability.
Family firms are extremely important actors in the Palestinian economy and society overall, making the governance guidelines issued by PGI all the more essential. PGI officially launched the new publication at recent events at the Chambers of Commerce in Nablus and Hebron (cities which are traditionally the commercial and industrial hubs of Palestine).
These events and others are succeeding in generating considerable discussion and interest among business people from firms small and large about ways of improving the governance structures of their companies.
CIPE is proud to continue supporting PGI to inspire such private sector-led reform through an ongoing series of education and awareness-raising initiatives surrounding the new manual.
Stephen Rosenlund is a Program Officer for the Middle East & North Africa at CIPE.