Author Archives: Danya Greenfield

Entitled to accountability

Two generations of Bedouin men at camp in Wadi Rum, Jordan. (Photo: Dorothy Smith)

It was my first visit since the Middle East’s wave of popular uprisings began, and I was curious to see if I felt anything different. Of course, the conference on corporate governance I was attending took place in Jordan, perhaps the quietest front in the Arab Spring spectrum, so it wasn’t really a fair test. Yet that didn’t prevent me from gaining a sense of change.

One Egyptian that works for a multinational organization noted, “What’s different these days is the demand for accountability. Nobody wants to sign his name to anything unless he’s certain that everything is in order and can be justified – both in the government and the private sector. People feel they will be held accountable for their decisions, and this is a radical difference.”

Surrounded by another Egyptian, a Tunisian, and a Jordanian – all participants in the conference from the business community or development organizations – they all nodded their heads in agreement.  Yes, they concurred, people are no longer willing to turn a blind eye to abuse of power and there is a sense of entitlement to open access to information.

My Egyptian colleague continued, “Of course, the downside to this is that nothing is moving in the economy. Since everyone is so cautious, there is little activity taking place and the result is a bit of stagnancy. But, this is a normal reaction, and the pendulum will swing back toward the middle and momentum will pick up again. Even with the short-term pain people are feeling, it is worth it. Nothing will ever be the same – we will never go back to the way we were before. Now we know we can make our own future.”

After reading report after report about dire economic forecasts for Egypt, Tunisia, and Yemen, I was encouraged by his sense of optimism.

Over the past several months, the initial euphoria from the youth revolutions has waned in Washington, and a tendency towards cynicism has emerged. My colleague leaned forward and relayed his story about joining the demonstrators in Tahrir Square in the early days of the revolution, about thousands of people streaming in from all directions and joining together in an unplanned, spontaneous moment. As his eyes lit up and his voice gathered strength talking about the sense of momentous change and invincibility in the air, I couldn’t help but be swept up by his excitement.

There is no doubt that it will be a long, bumpy ride for Egyptians and others in the region, and there will surely be many setbacks and disappointments ahead. But with a new generation of leaders and reformists like those I met in Jordan, there is a fighting chance that great progress lies ahead.

Leadership by example for a region in change

Also available with subtitles in Arabic.

Given the tumultuous change and economic stagnation throughout the Middle East and North Africa, one might be tempted to ask, is corporate governance even relevant in the current environment? The answer is yes, and here’s why.

Corporate governance is intrinsically linked to the concerns being expressed by people throughout the MENA region because good corporate governance and good democratic governance both are based on the values of accountability, transparency, responsibility, and fairness. There is now a new opportunity to talk about these issues – and how to establish institutions that uphold these values – that was never possible before.

CIPE and the Global Corporate Governance Forum officially launched their new guidebook and video resource for corporate governance, Advancing Corporate Governance in the Middle East and North Africa: Stories and Solutions, at the Corporate Governance and Responsibility Forum in Amman, Jordan on June 12-14, 2011.

The conference gathered more than 100 practitioners and businesspeople from around the world and raised issues related to corporate governance, corporate social responsibility, and sustainability.

The driving force for the region’s popular uprisings is economic concerns, including unemployment and a low standard of living. Addressing these issues will require a dynamic private sector that will generate new job growth. To achieve the aspirations of the youth, it is essential to help develop stronger, more sustainable business, which depends on creating an environment where the private sector can flourish.

Implementing corporate governance is one important step in this direction – it will help companies attract investment, instill shareholder confidence, and improve productivity, and will also help rehabilitate the reputation of the business community in an environment where the private sector’s reputation is under attack. Corrupt crony capitalists associated with the ruling regimes in Tunisia, Egypt and elsewhere have given the private sector and free markets a bad name.

Standing against corruption and demonstrating a commitment to corporate governance, transparency, and disclosure of conflicts of interest is an important way for businesses to generate trust and regain credibility that may have been lost.

Lofty democratic ideals will not motivate all business owners, but there are concrete benefits that corporate governance helps realize. CIPE and GCGF talked with companies around the region in order to gather success stories of how and why they made governance changes and what positive impact it had. The resulting guidebook presents real-world, practical examples that show how companies in the region overcame barriers and improved their governance practices in ways that benefited performance and growth.

The guide is intended to serve a real-world purpose: To provide assistance and motivation to directors, senior managers, regulators, and others as they try to improve existing corporate governance practices.

As governments increasingly look to the private sector to stimulate economic growth, the business community has a unique part to play in promoting values of accountability, fairness, and responsibility. This new role will help to advance democratic institutions and strengthen business ethics to the benefit of the public sector, the private sector, and society at large.

Raising the bar on corporate governance

While the situation in the Middle East is fluid and the future is quite uncertain, it is clear that good governance and transparency will be key ingredients for a successful transition to more representative political systems. Just as the political leadership must rise to reach this higher threshold, so too will the private sector as it responds to the backlash against corrupt businesspeople who siphoned millions from the public.

As a resource for businesses looking to reach that higher threshold, CIPE and the Global Corporate Governance Forum have just released a new guidebook and accompanying video, Advancing Corporate Governance in the Middle East and North Africa: Stories and Solutions. The rampant corruption, self-dealing, and lack of accountability that corporate governance seeks to address are exactly the problems that have enraged prompted thousands of ordinary Egyptians, Tunisians, Yemenis, Bahrainis and others to take the streets and demand reform and political change.

The new governments that emerge in the wake of these revolutions – and existing ones that pledge reform – will need to respond to the legitimate demands of its citizens and be accountable for its decisions and actions. With tainted business tycoons and crony capitalists of the regimes under attack by opposition movements and protesters, it is critical that business leaders engaged in legitimate and productive economic activity –which is the vast majority of the business community — demonstrate firm commitment to transparency and combating corruption. CIPE’s partners in Egypt and elsewhere are leading the charge.

One way for businesses to achieve that is by incorporating sound corporate governance practices that ensure proper mechanisms are in place to uphold the core principles of fairness, accountability, responsibility and transparency. Such practices include equal and fair treatment of shareholders, disclosure of financial records, addressing conflicts of interest, and setting clear employment policies based on merit not connections. The resource that CIPE and GCGF developed is a practical guide that describes how companies of different types and sizes in the Middle East and North Africa region were able to overcome challenges and improve their corporate governance practices through a gradual process.

As these new governments increasingly look to the private sector to respond to pressing economic needs and stimulate job growth, the business community has a unique part to play in promoting values of accountability, fairness, and responsibility. This new role will help to advance democratic institutions and strengthen business ethics to the benefit of the public sector, the private sector, and the general public.

The most inspiring day in Yemen

In three years and nearly a dozen visits, yesterday was the most inspiring day I’ve had in Yemen. I saw something that made me truly optimistic for the future of the country, in the form of five teenage guys that are competing in a regional competition for the Best New Business. They’ve already developed their own company, Port Mokha, exporting genuine Mokha Coffee from Yemen; what was even more surprising was the variety of their talents beyond business acumen.

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Look who’s talking now: Yemeni Youth

Corruption is the greatest obstacle to growth and development in Yemen; and Yemeni youth have the vision and passion to overcome it. CIPE created a documentary on anti-corruption that exposes the economic and social costs of corruption in the country, and captured powerful scenes of Yemeni youth asking hard questions and raising their society’s expectations of leadership. In June 2010, CIPE launched the film with a screening and discussion in Sana’a in partnership with Democracy School, a local NGO that works to educate youth about human rights, corruption, and civic participation. Here’s the trailer for the version subtitled in English, set for release this fall:

In the next phase of the program, CIPE will work with local partners to use the film as an awareness-raising and educational tool with youth, the business community, journalists, political parties, municipal councils and other stakeholders in governorates throughout the country. Combating corruption will only be successful when it’s no longer seen as an inevitable, unavoidable part of Yemeni life, and education is the first step.

Sustainable Development is Possible in Yemen

A street market in Yemen. (photo: CIPE)

A street market in Yemen. (photo: CIPE)

Now that Yemen is front and center in the minds of U.S. national security experts and the American public alike, it’s time for a serious reassessment of our military and development assistance to the poorest nation in the Middle East. U.S. assistance strategy in Yemen should take into consideration the wide range of factors that threaten Yemen’s already tenuous political and economic stability.

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Corruption on the rise in MENA

With the recent conference on UN Convention on Corruption (UNCAC) implementation in Doha on November 9-13, anti-corruption efforts are a hot topic in the Middle East and North Africa. At a minimum, the Doha gathering focused the attention of government bodies tasked with implementing the agreement, and the final statement of this conference encourages the state parties to adopt a robust implementation plan. Although most Arab states have signed and ratified UNCAC, implementation has been weak and anti-corruption advocates are using the tool as a point of pressure on their governments. Indeed, they have an uphill battle to fight: international barometers and indicators, such as the recently released Corruption Perception Index (CPI), an annual ranking produced by Transparency International, consistently place MENA at the bottom of the barrel with some exceptions in the Gulf. It is widely accepted that corruption is rampant in most of the region, and that its detrimental effects serve to deepen poverty, sustain unresponsive regimes, and thwart the potential for economic growth.

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