The Capital Market Authority (CMA) has encouraged competent professionals to make the most of the opportunity opened up recently to offer their services as directors on the board of directors of companies listed on the Muscat Securities Market (MSM).
The initiative, according to a high-level official, is aimed at supporting the infusion of new talent into the boards of public listed companies, which could potentially translate into opportunities for enhanced business growth, product and service innovation, and increased profitability.
“The new portal [link: https://e.cma.gov.om/BoardMemberofdirectors/home] created by the Authority allows professionals of all backgrounds, who aspire to join the board of a public listed company, to offer their candidature for the consideration of the publicly traded companies,” said Mohammed Said al Abri, Vice-President — Capital Market Sector, CMA.
“There is an abundance of talent out there in the market that is waiting to be tapped as directors. We encourage them to register their particulars on this portal. At the same time, public joint stock companies should try to bring in new blood on their boards. Changes to the Board structure can yield new insights and perspectives that can invigorate the corporate environment in these companies,” Al Abri told the Observer.
The practice of directors moving from one board to another has long been the bane of Oman’s corporate sector – a trend the CMA is looking to change. Companies have defended the practice, insisting that the directors in circulation have the right exposure and skills. Moreover, finding new blood is often challenging, because prospective candidates for board membership do not advertise themselves, they argue.
The new database launched by the Authority last week is designed to address this shortcoming in the market, according to the Vice President — Capital Market Sector. “Those who feel confident that they have the requisite skills to become an effective board member can now upload their brief personal and professional particulars on the portal. Companies and major shareholders looking to tap new talent are invited to login and then browse the database for candidates that suit their criteria. They can even interview the candidates to assess their capabilities.”
Significantly, the Sultanate is the only country in the wider Middle East to have launched such an initiative to support greater diversity in the composition of boards of publicly traded companies. “The only parallel we know of is in India, where a start-up enables prospective candidates to register their details on their site. Companies can access the site for a small fee. Of course, in Oman, our service is accessible free of charge to interested candidates and companies alike.”
The Authority, Mohamed al Abri said, decided to create the database following feedback received from Omani professionals lamenting that they have never been invited to join the board of well-established companies as directors.
“His Excellency the Executive President then gave us instructions to create a platform that allows for companies to connect with prospective candidates for directorships. Ultimately, of course, it is up to the company and its shareholders to select candidates of their choice. It may be likely that a candidate may be well-qualified, but may lack the temperament that the company wants to see in its directors. The Authority has no say in this matter, and leaves it entirely to the company and its shareholders to make its choices.”
Importantly, the database will also be opened up to all other companies and legal entities operating in the Sultanate, said the official. “In the interest of good corporate governance, we even welcome private firms and other companies registered with the Ministry of Commerce and Industry to take advantage of this database to appoint Independent or Non-Independent Directors to their respective boards. This will enable companies, whether listed or otherwise, to further strengthen their corporate governance framework.”
Additionally, the option to register as a prospective candidate for board memberships is open to both Omanis and expatriates, according to the official. Registration procedures are kept to the minimum in order to encourage a wider response to this initiative, he stated, adding that precautions are being taken to safeguard the privacy of candidates posting their personal particulars on the website.
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