A lack of clear legislation demanding greater disclosure is the biggest obstacle to greater transparency from publicly listed companies in the region, according to an expert.
“While low levels of foreign share ownership in the GCC, management resistance and time were also cited as obstacles, regulation obligating companies to adopt greater disclosure policies would be the main driver for greater transparency from listed firms in the Gulf,” said Nicholas Lunt, Managing Director of M: Communications.
“In the aftermath of the financial crisis, investors are insisting on greater levels of disclosure and transparency before committing further funds to this region,” he added.
“There is a consensus amongst investor relations professionals that greater transparency is a good thing but without the momentum that legislation can give, it will take much longer to see increased disclosure from listed firms,” Lunt said while quoting criteria established through research amongst investors and analysts, H&H Webranking.
H&H Webranking is an annual review and ranking of more than 80 of the largest publicly listed firms in the Gulf region according to their digital investor relations and online communications capabilities.
Kuwait telecommunications operator Zain emerged in top position in the GCC followed by Qatar’s Al Khalij Commerical Bank. UAE real estate group Emaar, last year’s winner, came in third this year.
H&H Webranking is now implemented around the world each year by M: Communications’ sister company and one of the world’s leading digital PR and IR agencies, Hallvarsson & Halvarsson, who started the process in 1991 in Europe. This is the second year H&H Webranking has included the Gulf’s leading listed companies.
“The number of international investors eyeing up Gulf opportunities is increasing by the day and online communication is an area that regional companies in the Gulf cannot ignore. Any company that wants to compete on an equal footing for international investor attention needs to address good online communication”, said Staffan Lindgren, Executive Partner of H&H.
“The winning companies have understood this. A successful strategy should also address critical areas such as social media and corporate social responsibility as well as deliver the required financial information that target audiences are looking for,” Lindgren said.