Page 300 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

282 Dubai & Co.

know-your-client requirements. Regulators are sensitive to the
risk of being seen as “loose” or soft on terrorist financing and
have proactively tightened their controls. Corporate governance
standards are rapidly evolving as public listings become more com-
mon and family businesses bring on outsiders as professional
management.
One advantage that multinationals often have relative to local
firms is robust business processes tried and tested in other markets.
In financial services, for example, international banks often have
rigorous credit approval processes that help maintain greater disci-
pline in corporate and consumer lending. These sorts of controls
proved very helpful in keeping international banks from excessive
margin lending during the stock market boom of the early 2000s
and the bust of 2006. Proven business processes of multinationals
have also exerted a positive influence in such other sectors of the
GCC economies as manufacturing, inventory control, and the retail
environment. Savvy multinationals maintain strict guidelines in
these areas in order to manage risk and optimize performance.
After setting the guidelines, they then empower local management
to grow the business within the given parameters.
Where firms may feel especially challenged in maintaining
their global standards is in the sensitive area of people manage-
ment. Acommon practice in many local firms, for example, is to pay
different wages to individuals employed in the same function
depending on their nationality. American and European expatri-
ates, for instance, can be paid more for doing the same job than
expatriates from the Arab world, Asia, or Africa. Such discrimina-
tion is unacceptable according to the policies and core values of
most leading firms. Although the local market may tolerate such
practices, multinationals should uphold their global principles and
provide equal pay for equal work. Doing so not only protects their
international reputation but also sends a strong signal to the talent
market about ethical employment practices.
Gender issues have historically been similarly challenging, but
the situation is improving. Most multinationals embrace principles
by which all staff members, irrespective of gender, have equal
opportunity for advancement and promotion. The same should
apply in the local companies operating within the GCC states.