Ushering In An Ethical Culture


Ushering In An Ethical Culture Ethical BoardroomBy Aley Raza – Chief Ethics & Compliance Officer & Director Internal Audits’ of ENOC Group



Emirates National Oil Company (ENOC), a wholly-owned company of the Government of Dubai, is the strength ‘behind every successful journey’, touching people’s lives across the oil, chemicals, gas, aviation, shipping, liquid storage, information technology, retail, travel and real estate industries. The company also has a growing international footprint with established operations across the Middle East, Africa, South and Far East Asia.

With the aim of being the regional leader in corporate governance in the MENA (Middle East and North Africa) region, ENOC strongly believes that good governance has contributed substantially to its success and is essential for business prospects in the long-term by managing the company’s future growth across new geographies and diversified business segments.

Talking to Ethical Boardroom, Aley Raza, Director of Internal Audit and Business Ethics at ENOC, highlights the corporate governance journey of ENOC in three phases, highlighting the key ‘governance’ lessons we can learn from a company’s life cycle.

The Foundation’ Phase (Inception)

The ‘Foundation Phase’ captures the evolution and growth of ENOC since 1993, when new business development avenues were explored; mergers, acquisitions and consolidations took place; and ENOC stepped into various geographical locations with diversified business activities including exploration, refinery, trading, oil storage terminals, gas bottling plant and lubricants manufacturing plants, among others.

Leveraging the global economic growth, ENOC became a diversified oil and gas group of more than 30 companies (joint ventures (JVs), subsidiaries, affiliates), partnering with major international industry players, spread across 10 or more geographies, and with access to global supply, trading and distribution markets.

The ‘Origination’ Phase (2007–11)

ENOC embarked upon its ‘ceremonial’ journey for adopting corporate governance best practices in 2007-2008 when a new shareholding-ownership, board and leadership structure for ENOC was introduced by its shareholders (the Government of Dubai). During this phase, ENOC achieved several milestones in strengthening the overall corporate governance environment.

In 2008, ENOC formulated a new business strategy to be ‘a leading regional integrated oil and gas group, highly profitable and socially responsible toward its employees, community, and environment’.

To succeed with this strategy, ENOC needed the right mechanism. Beyond just an execution framework for implementing and monitoring the strategy, ENOC decided to adopt a robust change management process, a capability-building effort, and a strategic governance mechanism. For this purpose, ENOC introduced new governance initiatives such as the Balanced Scorecard (BSC) Performance Management system (2009); Code of Business Conduct (2010); and Enterprise Risk Management system (2011).

The internally developed ENOC Code of Business Conduct (COBC) was launched in 2010, reflecting on ENOC’s commitment to uphold the highest ethical values for it being ‘The Way We Lead’.

In 2011, an ENOC group-wide restructuring exercise was conducted to strategically re-align/ manage its subsidiaries and JVs in accordance with the new vision, mission and objectives of the organisation. As a result, greater business segment autonomies were created, more corporate office centralisation took center-stage for key governance functions, and the concept of shared service was introduced.

The Enterprise Risk Management (ERM) framework was established in 2011-2012 and Risk Management capabilities and maturity levels across the organisation have gradually developed over the last few years. The company also committed to building strong and transparent relations with its shareholders resulting in periodic reporting of financial and non-financial performance.

The ‘Enlightened’ Phase (2012 – to-date)

In order to formalise as well as further enhance corporate governance practices at ENOC Saeed Khoory, ENOC’s Chief Executive Officer, initiated the Corporate Governance Programme in June 2012. A Corporate Governance Steering Committee (CGSC) was formed under his leadership comprising ENOC’s Chief Financial Officer, Director Internal Audit / Chief Ethics & Compliance Officer and Director Legal to assess current corporate governance practices, to establish the Corporate Governance code and enable ENOC to adopt practical corporate governance guidelines.


“Guiding principles of corporate governance were identified while commitment and implementation to agreed principles and standards remain our key focus”


The ENOC Corporate Governance Programme aims to address varying governance challenges, cultural circumstances and economic aspirations to protect/support ENOC’s strategy, reputation, growth, profitability and long term sustainability – while collaborating with corporate governance institutions, international experts, industry regulators and government authorities.

As part of ENOC’s Corporate Governance Programme, various initiatives were taken:

Ushering In An Ethical Culture Ethical BoardroomENOC adopted the corporate governance Progression Level Matrix (PLM) which comprises corporate governance guidelines allocated into six key attributes: Corporate Governance Commitment (Legal & Regulatory); Shareholders’ Rights, Relations & Matters; Board of Directors Structure & Functioning; Control Environment; Transparency & Disclosure; and Stakeholder Relations & Matters – and four progression levels beginning with ‘compliance with laws and basic corporate governance formalities’ up to ‘corporate governance leadership.’ With the PLM in place, a number of ENOC subsidiaries and JVs were assessed to identify their maturity with respect to corporate governance practices as well as address key corporate governance gaps with quick wins.

With the aim to educate companies, boards and management; as well as highlight certain corporate governance gaps identified in preliminary assessments, various interactive workshops were conducted across the Group and continue to be conducted in the present.

The CGSC has taken the lead in meeting key government stakeholders to bring about alignment and achieve a wider objective of industry leadership. In addition, collaboration with external corporate governance institutions such as The Organisation for Economic Co-operation and Development (OECD), Hawkamah/IOD MUDARA and GCC BDI have also been established.

At an event organised by Hawkamah, the Institute of Corporate Governance, Saeed Khoory presented the importance of governance at subsidiary level with a focus on the leadership vision and corporate governance framework of ENOC. Interviewed at the forum, Mr Khoory said: “Corporate governance is not only about controls and doing everything as per policies and procedures. It is also about how your run your business as well as manage effective shareholder relations and communications between various stakeholders.”

ENOC was invited by OECD at stakeholder consultations held in July 2013 (Istanbul, Turkey), and in February 2014 (Paris, France) to comment on the revision of corporate governance guidelines of state-owned enterprise (SOEs). Due to recent corporate governance practices adopted by the Group, ENOC has been selected by OECD for a case study on State-Owned Enterprise in the MENA Region: Leading by Example. The objective of this study is to showcase examples of leading SOEs in the region, in terms of adoption of corporate governance.

The ENOC Corporate Governance guidelines and framework were developed after considering various benchmarks, existing practices and corporate governance gaps identified during preliminary assessments.

To support board directors’ development, ENOC has collaborated with GCC Board of Directors Institute (BDI) to conduct BDI Foundations of Directorships programme for directors at ENOC subsidiaries. GCC Board Directors Institute Awards ENOC (June 2014). The award was launched by GCC Board of Directors in partnership with London Business School focusing on the board effectiveness proprietary framework.

Challenges in the Journey

During the development journey, challenges were a regular feature. The guiding principles of corporate governance were identified while commitment and implementation to agreed principles and standards remained our key focus.

We had to continuously ensure establishing appropriate levels of corporate governance best practice throughout the different facets of our businesses. The resistance to change in culture and practices can’t be overruled but the guidelines came out well-crafted and well-accepted at the end. The journey was very thought-provoking but most inspiring and successful.

Going Forward

The corporate governance journey is continuous and fully committed under the leadership of the ENOC Board, CEO and CGSC to maintain the highest standards of corporate governance across ENOC Group to support business growth, profitability and sustainability aspirations. In this regard, new heights are being aimed at, strategies will be formed to address any new challenges and greater business-governance objectives integration is being undertaken.



About the Author:

Aley Raza is the ‘Chief Ethics & Compliance Officer & Director Internal Audits’ of ENOC Group – leading & directing the Corporate Governance Program, the Business Ethics & Compliance Function and the Internal Audit Directorate across the global reach of ENOC operations and subsidiaries / joint ventures across the Middle East, North Africa, & Far East regions; with a functional reporting relationship to the Chairman of ENOC Board of Directors’ Audit Committee and administrative reporting to the ENOC Group Chief Executive Officer. Aley is a senior & seasoned participant of the ENOC Leadership Team, and also serves as an expert on a number of governance committees at the ENOC Group-level including the Business Ethics Committee, the Corporate Governance Steering Committee, and the Executive Enterprise Risk Management Committee (advisory capacity).

In the past, he has also functioned as an Audit Committee Member / Secretary within a number of ENOC Subsidiaries & Joint Ventures; and worked with Chevron and Dragon Oil PLC (a UK & Ireland listed company) directing their Assurance & Governance programs. Aley also engages with the OECD as an OECD Task Force Member for Corporate Governance of State Owned Enterprises in the MENA Region; and is a Member in good standing of the following universal governance institutes – Society of Corporate Compliance & Ethics USA; Institute of Directors MUDARA Dubai; and The Institute of Internal Auditors UAE/USA.