The world is witnessing a notable shift toward enhancing women's role in various aspects of life, including the business sector. The United Arab Emirates is a pioneering country in this field, as the Ministry of Economy has issued a decree mandating companies to ensure female representation on their board of directors. This decree aims to empower women economically and enhance their participation in decision-making at the corporate level.
In this article, we will review the details of this decree and discuss its potential impacts on the business environment in the UAE.
When was the decree issued and when will it be implemented?
Ministerial Decree No. (137) of 2021 was issued as part of the UAE's strategy to enhance the role of women in economic life. According to the decree, all private joint-stock companies must ensure that there is at least one woman among the members of the board of directors by January 2025.
Who does this decree include?
The decree includes all women, whether Emirati citizens or expatriates, reflecting the country's commitment to promoting diversity and benefiting from the expertise of all female competencies in the country.
What are the powers of women on the board of directors?
The decree will ensure the representation of women on the company's board of directors, and they will enjoy the same powers as any other member of the board, including:
* Participating in making strategic decisions for the company.
* Supervising the performance of executive management.
* Contributing to setting the company's general policies.
* Protecting the interests of shareholders.
How will the implementation of the decree be ensured?
The Ministry of Economy and other regulatory authorities will be responsible for ensuring that companies comply with the implementation of the decree, through oversight mechanisms that include:
* Reviewing company reports to ensure female representation on boards of directors.
* Imposing financial fines on non-compliant companies.
* Publishing a list of the names of complying and non-compliant companies.
What are the expected impacts of this decree?
This decree is expected to have positive impacts on the business environment in the UAE, including:
* Enhancing diversity on boards of directors, leading to improved decision-making.
* Encouraging more women to join the business sector.
* Improving the image of the UAE as a leading country in the field of women's empowerment.
Conclusion:
The Ministry of Economy's decree on enhancing the representation of women on boards of directors is a strategic step toward empowering women and achieving institutional diversity in the UAE business environment. This decree is expected to contribute to building a sustainable economy that enjoys transparency and competitiveness and enhances the role of women as a key partner in the economic development process of the UAE, which benefits the national economy in general.
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Written By:
Ms.Rana Al Shoufi- Legal Consultant & Head of legal Coordination Department atAl Safar and Partners Law Firm.