Increased board involvement and diversity signal a new era of governance in the UAE
In an evolving business landscape marked by uncertainty and heightened expectations, UAE company boards are stepping beyond traditional oversight roles to engage more deeply in day-to-day operations. A recent report by Heidrick & Struggles highlights a growing trend in UAE boardrooms where directors are increasingly operationally involved, with 52% of UAE directors reporting frequent involvement in operational matters. This figure is notably higher than the global average of 25%, positioning the UAE as a leader among the 20 global markets surveyed.
In its fourth annual Board Monitor UAE report, Heidrick & Struggles emphasizes that the role of the board is expanding universally, shaped by heightened stakes, rapid industry shifts, and an ever-growing list of responsibilities. This new role for boards marks a shift from mere oversight to a more hands-on partnership with executive teams, a trend particularly prevalent in the UAE. According to Shaloo Kulkarni, partner at Heidrick & Struggles’ Dubai office, “Board involvement in business operational matters is relatively more prevalent in the UAE and the GCC when contrasted with several other more mature markets. Driven by rapid growth and business transformation targets, boards have an appetite to delve deeper into day-to-day operational matters.”
Key Findings from Board Monitor UAE 2024
The report reveals several noteworthy insights about UAE boards, reflecting their strategic alignment with the country’s ambitious growth vision:
- Cross-Cultural and Diverse Appointments: Around 44% of new board members in the UAE are non-nationals, and 63% bring cross-industry experience to their roles.
- Direct Workforce Engagement: UAE boards emphasize a direct connection with employees, with 91% of respondents supporting greater board-level engagement with the workforce compared to 86% globally.
- Regulatory Impact: Regulators have increasingly influenced UAE boards, with 57% noting regulatory bodies’ significant post-Covid impact on governance compared to a global average of 45%.
Moreover, UAE boards are dedicating substantial attention to emerging technologies, especially artificial intelligence (AI), with 83% of directors prioritizing discussions on AI—a figure that surpasses the 71% global average. This aligns with a recent IBM report ranking the UAE as the second-highest adopter of AI worldwide. Other strategic priorities for UAE boards include monitoring financial performance, managing risk (74%), and assessing geopolitical volatility (67%), all of which reflect the UAE’s forward-looking governance strategy.
Advancing Board Diversity and Youth Inclusion
Diversity within UAE boardrooms is also seeing a notable improvement, with more first-time board members and female directors joining since 2020—the year Board Monitor UAE was first conducted. Maliha Jilani, a partner at Heidrick & Struggles’ Dubai office, highlighted the importance of youth and gender diversity, noting that younger board members bolster succession planning and address issues like overboarding. Jilani also recommends strategies like apprentice or shadow boards to cultivate future leaders and ensure board skills evolve in line with industry demands.
“Bringing younger talent onto boards not only bolsters succession planning but also addresses issues like overboarding,” said Jilani. “Boards could also explore options like advisory committees, independent advisors, external consultants, and on-demand talent platforms, ensuring they have the diverse and evolving skills required to govern in this dynamic landscape.”
The Path Forward
As the UAE cements its position as a leader in digital transformation and governance, the increased operational involvement of boards is likely to continue. By integrating diverse perspectives, fostering direct engagement with employees, and addressing emerging technological trends, UAE boards are aligning their strategies with both national goals and global standards. As the region navigates an era of unprecedented technological and economic change, this adaptive, hands-on approach is not only shaping the future of UAE boardrooms but also setting an example for global governance practices.
The Board Monitor UAE 2024 findings underscore the UAE’s proactive stance, offering a blueprint for companies navigating today’s uncertain environment.
