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UAE boards are more operationally involved than global peers

Survey reveals how the role of the board is evolving in today’s uncertain environment

UAE company boards are more involved operationally involved on a frequent basis than their global counterparts, a study shows.

According to a report by Heidrick & Struggles, a provider of executive search, leadership assessment and development services, 52 per cent of directors in the UAE are more operationally involved on a frequent basis — more than double the global average of 25 per cent and notably the highest out of the 20 markets surveyed.

In its fourth Board Monitor report in the UAE, the company notes that despite regional and industry differences, there is a global consensus that the board’s role is expanding, with higher stakes, more uncertainty, and increasing expectations. As these expectations grow, directors navigate the blurred lines between oversight and management.

“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, seeking more details and involvement beyond formal board reporting. Non-executive directors and board advisors often bring specialized knowledge that the executive team may still be building, and hence, a deep partnership and engagement model between the board members and the executive management is leveraged to steer companies toward their future business vision,” said Shaloo Kulkarni, partner in Heidrick & Struggles’ Dubai office and Heidrick Consulting in APAC & EMEA.

Key insights from the Board Monitor UAE 2024 include:

●44% of appointments are non-national

●63% of appointments have cross-industry experience

●Leaders in UAE are keen on direct engagement with the workforce, with 91% of UAE respondents saying they should engage more with the firm overall compared to 86% globally

●Regulators in UAE have had the biggest increase in impact on boards in the post-Covid environment at 57% compared to 45% globally

○Regulators ranked higher than other stakeholders such as consumers (50%) and the CEO and leadership team (46%)

The survey also revealed that UAE boards have significantly increased time spent on emerging technologies, including AI (83 per cent), exceeding global counterparts (71 per cent). Other topics UAE boards spend more time on include financial performance and risk (74 per cent) and geopolitical volatility (67 per cent). In a recent IBM report this year, the UAE ranked second in active use of AI globally (58 per cent), coming only behind India (59 per cent), highlighting how UAE leaders must assess how disruptions like AI will reshape industries.

Board diversity in the UAE is on a promising rise, with a significant increase in first-time board members and a stronger presence of women. Both recorded the highest numbers since 2020 - the first time the Board Monitor UAE was conducted. “We are seeing a rising trend of young leaders and women joining boards, and boards in the UAE should build on this momentum by continuing to strengthen their composition with demographic and experiential diversity. Bringing younger talent onto boards not only bolsters succession planning but also addresses issues like overboarding. Boards could also explore options like apprentice or shadow boards to help younger leaders develop the skills needed to be effective. Additionally, boards can broaden their expertise by tapping into 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,” said Maliha Jilani, partner in Heidrick & Struggles’ Dubai office and social impact practice lead in the Middle East and North Africa region.