Why We Must Embrace Transparency

The benefits of fiscal transparency are well known. First, transparent public fiscal finances are far less prone to corruption and can lead to economic growth and economic stability, particularly through increased foreign investment. This can then have the knock-on effect of creating jobs and spurring innovation. The Arab world is facing certain challenges as we adopt policies of fiscal transparency, everything from legal and political restrictions to lack of budget documents made public to effective oversight and accountability. But we are answering the call. In line with goals stated in their Vision 2021, the UAE has taken such measures on fiscal transparency that the Emirates was removed from the European Union's list of Uncooperative Tax Havens in January of this year. The Kingdom of Saudi Arabia, too, has taken big and bold steps to improve transparency in our banking and tax systems. In May 2017, Saudi Arabia released something it had never published before: A quarterly budget report. The Kingdom’s Vision 2030 document clearly takes aim at anti-corruption measures, as no government can be described as “an ambitious nation effectively governed” without having the goal of “embracing transparency”. To achieve “leading international standards and administrative practices” we must uphold high standards of accountability, and part of that will require having the highest levels of transparency and governance for all sectors. Are we succeeding? The Heritage Foundation in 2017 gave Saudi Arabia scored 47 per cent on the “government integrity” sub-indicator. The world average of 40 per cent. That does not mean we are satisfied. We know we still have leagues to go. With central bankers in the United States and European Union tightening their wallets, and the flow of funding from capital markets slowing, to attract outside investors to Saudi Arabia there needs to be systematic reforms clearly in place. In a report published in May of this year, the International Monetary Fund’s Tim Callen said: “[Saudi Arabia] is making good progress in implementing its ambitious reform programme under Vision 2030”. Callen went on to add that: “The government remains committed to wide-ranging economic and social reforms to transform the economy.” Obviously, our challenge in reaching Vision 2030 goals is to continue to build on this momentum and sustain the implementation of reforms. We must achieve the fiscal targets we have set and resist the urge to re-expand government due to the rise of oil prices. And, as our laws and legal system is updated, we must continue to strive for transparency at all levels, including businesses, through licensing and regulations. And to do this we must invite dialogue with leading thought leaders on these issues and examine the “best practices” other countries and regions have pursued in these endeavours. This is why the GCC Board of Directors Institute was founded in 2007. It is our goal to seek the highest professional standards of corporate governance and therefore strengthen the region through capacity building and the advocacy of sound governance practices. The theme for our upcoming Chairman’s Summit in Riyadh on November 26 is “Digital Disruption and the Fourth Industrial Revolution”, where subjects such as what the realities and fads are, the threats and opportunities and the next stage of digital transformation are among the topics we will discuss during panels and roundtable discussions. How important is this digital revolution to fiscal transparency? Well, a paper published in the 2011 World Bank Economic Review states moving to an electronic form of government services can be an effective tool in anti-corruption for a couple of reasons. First, electronic services can reduce the distance between a government and its public by removing the “middle man” – the civil servant – and therefore diminish the opportunity by those intermediaries for a corrupt act. Second, electronic services make for a more transparent monitoring system of standardised rules and procedures than paper or face-to-face transactions. It is this type of dialogue and “best practices” sharing that the GCC BDI hope to be engaged in at our sixth Chairman’s Summit as we seek the solutions that will enable us to reach our goals. About GCC Board Directors Institute: Launched in 2007, the GCC Board Directors Institute (GCC BDI) is a not-for-profit organization that guides board directors of organizations, from family-owned businesses to listed companies, to acquire the know-how and the tools to reach and sustain effective governance. GCC BDI was founded by four leading regional corporations - Investcorp, SABIC, Saudi Aramco and Emirates NBD – and it is supported by four advisory firms: Allen & Overy, Heidrick & Struggles, McKinsey & Company and PricewaterhouseCoopers, as well as regional regulatory authorities: the Emirates Security and Commodities Authority, the Capital Market Authorities of both Saudi Arabia and Oman and the Central Bank of Bahrain. GCC BDI now works with over 1100 Alumni members who benefit from a network of senior business leaders and a variety of workshops designed for board directors and senior executives. Notably, the Institute hosts an annual Chairman Summit that brings together regional leaders and actors to explore the evolving role and value of Boards as well as appropriate corporate governance standards. The next GCC BDI Chairman Summit will take place on 26 November 2018 in Riyadh. Today the Institute is globally recognized and the only Directors Institute from the region to be admitted to the Global Network of Directors Institute. We encourage you to visit the Institute's website at www.gccbdi.org to learn more and get involved with the GCC BDI. About the GCC BDI 6 th Chairman Summit 2018 GCC BDI’s 6th Chairman Summit 2018 is being held on 26 November 2018 at Al Faisaliah Hotel in Riyadh, Saudi Arabia, in collaboration with Elm. This is a high-level, invitation-only annual event which gathers together influential chairmen, regulators and other business leaders to stimulate dialogue on board issues to raise awareness and enhance corporate governance practices in the region. Exponential leaps in technology mean that business is changing at the fastest pace the world has ever known. This year’s summit addresses the impact of digitalisation headon with the theme: ‘Digital disruption and the Fourth Industrial Revolution – are boards ready?’. GCC BDI’S very special guest of honour and speaker will be H.E. Eng. Abdullah A. Alswaha, Minister of Communication and Information Technology, Saudi Arabia. Please contact getinvolved@gccbdi.org if you would like to express your interest in being invited to attend.