OCGS Inks Agreement to Prepare Code of Governance for Government Companies
Oman Centre for Governance and Stability (OCGS)concluded an agreement with the Ministry of Finance to prepare a code of governance for government companies in response to the Ministry’s wish to set up clear standards to enhance the practices of wise management on best standards of performance leading to growth and expansion of business and investments.
The agreement was signed on behalf of OCGS by HE Sheikh Abdullah Salim Al Salmi, Chairman of the Board of Directors and for the Ministry of Finance by HE Nasser Khamis Al Jashmi Undersecretary for the Ministry of Finance.
On the significance of preparing a code of governance Sayyid Hamid Sultan Al Busaidy, Executive Director of OCGS said Oman has prominent position in corporate governance with regard to the companies listed in MSM thanks to the procedures adopted by CMA including issuing the Code of Corporate Governance in line with best international practices to enhance the stock market and it is high time to apply such practices on the other companies including the government companies, hence we addressed the Ministry of Finance on the importance of governance due to their role and contribution to the national economy and our initiative was accepted by the Ministry of Finance.
He added the governance represents an important part in the philosophy of management of investment institutions as a tool to direct the path of the company to best administrative standards. The principles endeavor to regulate the relationship between the various parties in identifying the policies and performance of the companies. Hence, the Ministry of Finance, as supervisor of the government companies decided to set out a number of standards and directives to guide the path of the government companies to assist the managements in executing the administrative and financial policies to ensure sound management and to manage the risks.
On the importance of the governance for government companies Sayyid Hamid said upgrading the efficiency, surveillance and transparency would lead to increased confidence in the national economy which would increase the rates of economic growth and deepens their role in the growth of savings and increase the return on investment. He added the Government relies in its strategy on the government companies to play supporting role for comprehensive development plans through real contribution in economic diversification beside enhancing their ability to expand and open markets for services and products in addition to boosting their ability to accommodate large number of job seekers as indicated in the budget of the year 2017 as the projections of the profits in the shares and capitals of the government companies are about RO 200 million.
On the number of government companies Sayyid Hamid said their number is more than 60 companies with different percentages in the shares and volumes of capital, thus, their economic weight is considerable. He added the concerned are aware of the importance of governance for the companies which was present in the recommendation of the national programme “Tanfeeth” to be a tool for management of the projects to be executed in the Ninth Five Year Plan. Tanfeeth was held during the period 18-24 October 2016 and recommended a number of projects and initiatives for economic diversification in three major sectors namely the tourism, manufacturing and transport and logistics services beside identification of standards to rely on supporting sectors such as financing and provision of manpower.
On the items of the code in view of the differences in the nature of businesses of government companies Sayyid Hamid said this is very important aspects and therefore the agreement included the OCGS obtaining the laws and regulations regulating the businesses of government companies to set a code covering the best frameworks, principles, standards and guidelines pointing out that OCGS has specialized staff and is relying on setting up the codes on international codes and the recommendations of the Organization for Economic Cooperation and Development (OCED), International Financing Corporation (IFC) and the World Bank (WB) and then adapts such codes according to the nature of the local companies taking into account the laws applicable in the Sultanate.
It is noteworthy that the OCGS was established to serve all the institutions in the state in fields of governance and sustainability. OCGS is non for profits administratively and financially independent institutions providing services such as preparing manuals and codes of governance and sustainability. OCGS provided services and support in governance and sustainability to the Daqum Special Economic Zone Authority , Telecommunication Regulatory Authority, Public Authority for Social Security, a number of public joint stock companies and Omanair. OCGS continues its efforts to disseminate awareness on governance to upgrade the efficiency of the institutions by setting up systems identifying rights and obligations. He added OCGS trained more than 300 directors of government and private companies. The training programmes are professionally prepared by the IFC and WB.