x Abu Dhabi, UAEWednesday 26 July 2017

Emaar to vote on allowing foreigners on its board

The Middle East's largest developer is to hold a shareholders' meeting to decide whether to allow foreigners on its board of directors.

The Middle East's largest developer is to hold a shareholders' meeting to decide whether to allow foreigners on its board of directors.
The Middle East's largest developer is to hold a shareholders' meeting to decide whether to allow foreigners on its board of directors.

Emaar Properties, the Middle East's largest developer, may allow foreigners to sit on its board of directors for the first time in a move analysts say is aimed at improving standards of corporate governance. 

The company today called a shareholders' meeting for November 3 to vote on the question. 

Emaar's board is currently composed of eight prominent Emirati businessmen, and its articles of association appear to require that all members be UAE nationals. 

In a statement announcing the meeting, Emaar said shareholders would be asked to vote on a change to the articles authorising "shareholders to elect non-UAE nationals to act as members of the Board of Directors".

Emaar did not respond immediately to a request for comment. 

Majed Azzam, an analyst at Al Futtaim-HC Securities in Dubai, said allowing shareholders to vote foreigners onto the board was logical given that foreigners can own up to 49 per cent of Emaar's shares. 

Emaar is listed on the Dubai Financial Market (DFM). "This is basically good corporate governance," he said. 

"It's the move in the right direction. If you allow foreigners to own a large stake in the company, there should also be representation on the board."

Another analyst said that allowing foreigners to sit on the board may presage a bid to hire experienced foreigners to advise the company on a strategic level and help it dig out of the financial crisis. 

"I would assume there could be a couple of guys they want to bring on board as advisers who they respect because they feel they can add value to the company," the analyst said. "Typically guys of that stature are put on the board."

The proposed change to Emaar's articles of association allowing non-nationals on the board would still require that the majority of board members be Emirati, according to a disclosure posted on the DFM's website. 

afitch@thenational.ae