Enhancing the Efficiency of Publicly-Listed Companies in Qatar: Towards a New Role for Corporate Governance

The economy is the foundation of a State and those with a healthy system have the potential to wield power beyond their borders, thus helping to shape regional and international security. To establish a stable economy and a healthy business environment, a State must have a solid legal system. Rules and regulations governing corporations are critical, yet they must strike the right balance between meeting important societal objectives and enabling corporations to undertake legitimate business activities. The effect of the lack of regulation of financial institutions was felt when the Bank of Credit and Commerce International (BCCI) collapsed in the early 1990s, damaging markets in the United States, Europe, and the Middle East, which were beyond BCCI’s home base in Pakistan. Consequently, regulators realized that principles, rules, and regulations must be generated to control the companies listed in the stock market to mitigate risk in corporate activities. The Enron scandal of 2001 and the subsequent bankruptcy of Enron is another example of the need for Corporate Governance rules and regulations, as the failure of the law led to the downfall of a major multinational company such as Enron which in turn led to the dissolution of Arthur Andersen LLP. The latter, the largest auditing firm in the world, had facilitated Enron to commit illegal acts. Based on the mentioned examples and other historical precedents, this thesis discusses the effectiveness of the Qatari Corporate Governance regulation on publicly-listed companies. The research investigates the impact of implementing Corporate Governance rules and regulations on listed companies in Qatar, the strengths and weaknesses of the Qatari Corporate Governance Code, and the effect of having more than one regulatory body controlling listed companies, comparing that with other governance systems. Finally, recommendations are made for proposed rules that guarantee the preservation of the financial market and listed companies.