Corporate Governance CIPE – EJB

Presented By: Eng. Hassan El Khatib EJB Secretary General Tunisia, 2008

EJB – Who Are We?

The EJB is a dynamic organization that works as a forum for business people committed to developing an outstanding culture of excellence while taking an active part in the overall development of Egypt.

B. Affairs EJB Councils B. Environment Community Dev.

Corporate Governance Mega Projects ENCC NBA Entrepreneurship Egypt ’s Vision 2030 CSR

EJB has succeeded in:

  

Promoting Leadership:

Corporate Governance, CG Egypt ’s Vision 2030 Entrepreneurship

Promoting Innovation:

  Egyptian National Competitiveness Council, ENCC Corporate Social Responsibility, CSR

Encouraging Alignment:

National Business Agenda, NBA

Agility: Create a Sense of Urgency

Agility

Today, EJB has engaged the private sector in all the initiatives to widen the constituency and strengthen lobbying and advocacy efforts.

Why Was Corporate Governance chosen?

Why Corporate Governance?

 To create a sustainable and sound business environment based on the core principles of corporate transparency.

governance, accountability and  Sound corporate governance is crucial, not only for private sector development, but also for economic growth.

 Promotion of a Democratic community.

Why Corporate Governance?

 Assures more access to finance, thus enhancing growth.

 Secures efficient management of a corporation.

 Essential for establishing an attractive investment climate characterized by competitive companies and efficient financial market.

Why for Family Firms?

In Egypt In EJB

 According to research, Family Businesses contribute from 60% to 70% family of GDP businesses of most developed & developing countries and that just 13% of the Family businesses survive till the 3rd generation & only 4% percent go beyond it and that one - third of disintegrate because of generational conflicts.

 Studies indicate that only about one in six family-run firms survive to the third generation.

 Not only to operate the business and to promote family harmony.

 Mediterranean Culture.

 EJB member companies are characterized by the domination of family businesses in economic activities.  Most of those family businesses face challenges because of the differences in the attitude & aspirations of family members. Some sacrifice the business to keep the families together, while others sacrifice the family to keep the business succeeding and eventually the family becomes entangled in the "Family First / Business First" phase.

A Close Up on the Program

OBJECTIVE

“Getting the members interested in CG and its significance and importance.” “To engage the private sector in active civic participation “

HOW Workshops Roundtables

(Awareness) (Identifying Solutions)

Develop a manual for best practices

(How to implement)

Engage the media

(Encouraging Implementation)

Awareness Campaign

  

The First Workshop:

Enhancing Growth through Corporate Governance.

The Second Workshop:

Family Business Governance.

The Third Workshop:

Governance.

Securing Efficient Management through Corporate   

The First Roundtable:

Family Business Governance & Preparing for Transformation.

The Second Roundtable:

independent directors.

The Third Roundtable:

of going public.

Structures of boards for family businesses & appointing Steps towards family business transformation & the benefits 

Corporate Governance Conference:

Family Firms “.

“

Corporate Governance … The Future for

CG Manual for Family Businesses 

The G – Phase 'Get to Know‘:

knowledge building phase.



The A – Phase 'Apply Your Knowledge‘:

Standards.

becoming familiar with the intended business environment regulated by Corporate Governance 

The M – Phase 'Manage your challenges‘:

of challenges that face the family business.

understanding the nature 

The E – Phase 'Evaluate & Reiterate‘:

being capable to build the yardstick of evaluating the process that the family business has been going through and contribute to proposing solutions.



The EJB Corporate Governance Manual is the first of its kind to be developed in Egypt & the Middle East.

Challenges

 It has been observed that most families e xperience resistance:     To delegate authorities.

Towards the entry of younger family generations into the business.

When dealing with succession problems and compensation of non – active family members.

The existence of psychological barriers between family and non – family members.

Results & Impact



Among the attendees

       69.5% were members of family owned firms 25% were Private Enterprises 22% were joint stock companies 12.5% were financial corporations not listed in the stock exchange 6.25 % were representatives from banks 6.25% were financial corporations listed in the stock exchange 1% Non Governmental Organizations.



Target attendance

40.

to all events was 25 / 30. Yet it ranged from 80 /  In the final conference, when participants were asked of their

level of understanding

of Corporate Governance, 87% of the responses were "high" and the rest was "moderate".

 Now, EJB members are presented in the Egyptian Institute of Directors as a member of trustees

Lessons Learnt

 Owing to the fact that the term 'Corporate Governance' is sometimes skeptically received from the business community especially when some translate it as letting go of power, the EJB found importance in creating awareness on the term itself then, focusing on the cost of compliance which is found negligible when compared to the cost of not adopting to the principles of CG.

Feedback from Partners

   

"The positive step taken in the EJB is that it has created awareness for the appropriate people who are willing to accept the concept and begin adopting it, which are the junior business society. H.E. Dr. Ahmed Nazif

– Egyptian Prime Minister

"Of all the Business Associations worked with around the world, EJB is ranked in the top rank" Dr. John Sullivan

– CIPE Executive Director

"The EJB is the perfect example of an NGO, and what is so distinguished about it is the governance inside the EJB itself" H.E. Eng. Rachid

Mohamed Rachid – Egyptian Min. of Trade & Ind.

“The manual is a great start… however we will never reach the optimum solution, we will always improve by the day. Whether it is a family business or otherwise, the end game is the same … Corporate Governance is the only way to go.

” Mr. Yasser El Mallawany – EFG

Hermes Chairman

Thank You