In the cut and thrust world of the UAE’s SME sector, corporate governance structures are not typically near the top of business owners’ to-do lists.
A study of the investment priorities of the country’s SME sector published in October by the business intelligence provider Meed found that sales and marketing was the No 1 priority for the 150 SMEs surveyed, followed by staff training and development.
Amid all the hard work of generating new business, chasing down invoices and making ends meet, issues such as training board members, developing a corporate governance manual and maintaining up-to-date succession plans quite naturally slip down the to-do list.
In such a climate, the Links Group stands out as a striking exception. The Dubai-based company formation specialist has been ahead of the curve in the area of corporate governance; since its inception in 2002 its founders have been putting in place structures and policies typically more associated with larger, publicly listed companies.
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“The types of business that we at Links Group bring in to the market expect a certain standard of governance structure,” says founding partner John Martin St Valery.
“They tend to have such a structure themselves, and would therefore expect similar rules pertaining to transparency and independence of the board and so on to be readily applied by their vendors as well.”
From its inception 13 years ago, for example, the company has brought on non-executive directors to serve on its board.
“In the early days it was people that were already known to us, professionals with certain skills that we believed could be brought in to help a growing business like ours,” says Mr St Valery.
“But they’ve always been independent, in other words, holding the owners of the business to some sort of standard.”
In 2010, the company went a step further by bringing in a non-executive board chairman from an entirely different sector, in an attempt to mirror the structures of its clients coming in from outside the country.
“Again, we wanted to show that we were as robust as they were when it came to governance; so being held to account by a non-executive chairman and putting in place policies that one would expect,” he said.
The company’s commitment was recognised in November by Dubai SME 100, which ranked Links Group as first in the area of corporate governance, and 71st overall, its third consecutive year in the prestigious list.
The Links Group began life in Dubai, helping foreign businesses to set up shop and navigating them through the various bureaucratic processes of establishing and registering a company in the emirate.
As the number of similar service providers increased rapidly in the midst of Dubai’s rapid economic growth, Links expanded its service offering into providing advisory services to both foreign companies establishing onshore businesses and their Emirati partners.
Links Group acts as a middleman in the process by running a company that acts as the local sponsor on behalf of the Emirati investor, so that the expatriate entrepreneur can retain full control of his or her venture.
“Many firms can now help with the basic company formation mechanics,” says Mr St John Valery. “The difference with us is that we enable companies to trade with that duty of care to make sure the local parties aren’t taking on undue risk and that the foreign party have control of their business.”
The success of this business model has enabled Links Group to spread its wings. It opened an office in Qatar in 2006 to work with foreign firms pursuing infrastructure contracts, as well as an office in Twofour54 in the Khalifa Park area of Abu Dhabi.
The company has branched out further in its service offering in recent years, helping businesses with disparate ownership structures to consolidate their operations in preparation for capital raising or flotation.
Despite healthy business in Qatar and the UAE, Mr St John Valery is cool on further expansion around the Middle East, setting the company’s sights farther afield.
“Wherever there are barriers to foreign investment in frontier or emerging markets our model works very well,” he says.
“Outside the region is quite interesting at the moment, places like South America and China in particular. We’re proud of being a made in Dubai business, and the accolades we’ve received enable us to seek expansion further afield.”
Back in the UAE, the high standards of corporate governance that Links Group has had in place are increasingly being adopted by enterprises of all sizes throughout the UAE.
“A few years ago [corporate governance] was largely a tick- box exercise for many companies, but as the market has matured and learnt some of the lessons of 2009-10, businesses are now starting to embrace corporate governance in the right way,” says Mr St John Valery.
“A lot of people are starting to see the value of that approach right from the outset,” he says.
“We believe it’s the proper way for a business to be run, whether you’re brand new, an emerging company or a long-established larger entity, because that’s where longevity lies in the security of running a business.”
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