Over 70 per cent of board of directors across the United Arab Emirates are more involved in conversations around changing business landscapes, embracing technology, and prioritising diversity and stakeholder engagement, according to a report by Heidrick & Struggles.
The report, titled 'Board Monitor UAE 2024', underlines how boards in the region are evolving amidst their increasing responsibilities and redefining their processes according to heightened expectations and uncertainties to thrive today. The key findings from the report include:
- Evolving role of boards: One striking insight from the report is that 52 per cent of directors in the UAE report being more operationally involved, a figure that more than doubles the global average of 25 per cent. This trend indicates a noteworthy shift in the boardroom dynamic, particularly in the UAE, where directors on boards are actively navigating the blurred lines between oversight and management.
- Focus on emerging technologies: The report also emphasises the growing importance of emerging technologies, with 83 per cent of UAE boards dedicating time to discussions around artificial intelligence (AI). This surpasses the global figure of 71 per cent.
- Global competitiveness: Other significant areas of focus include financial performance and risk management with 74 per cent boards, and geopolitical volatility with 67 per cent boards. 63 per cent of board members possess cross-industry experience, reflecting a trend towards varied perspectives.
- Diversity and Inclusion: On the diversity front, the report reveals encouraging progress, with a notable rise in first-time board members and an increased representation of women—both reaching their highest levels since the inaugural Board Monitor UAE in 2020. 44 per cent of board appointments are non-national, showcasing a diverse talent pool.
- Engagement with the workforce: 91 per cent of UAE boards are interested in direct engagement with their workforce, and emphasise that directors should connect more with their firms, compared to 86 per cent globally.
- Regulatory Influence: 57 per cent of UAE directors now recognise the significant impact of regulatory bodies in shaping board decisions post-COVID, outpacing the global average of 45 per cent. Regulators are now seen as more impactful than consumers (50 per cent) or leadership teams (46 per cent).
As expectations for board performance evolve, UAE leaders are clearly adapting to meet the challenges of a rapidly changing business landscape, embracing both operational involvement and diversity in their approach.
Maliha Jilani, Partner in Heidrick & Struggles’ Dubai office and Social Impact Practice lead in the Middle East and North Africa region commented, “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.”
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Shaloo Kulkarni, Partner in Heidrick & Struggles’ Dubai office and Heidrick Consulting in APAC & EMEA added, “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 specialised 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.”