Social media influences Middle East governance reform

Along with political and social developments, tighter government budgets and new legislative regulations, Deloitte predicts that many regulatory changes are set to come about.

The firm's Middle East Partner and Corporate Governance Leader, Rami Wadie, says these new levels of transparency have greatly boosted accountability.

"Public scepticism, combined with unprecedented transparency, is placing everyone under scrutiny like never before. The boundaries of social responsibility are rapidly expanding, challenging individuals in authority to consider the public and its agenda".

Social media plays part in GCC state auditing

Several GCC countries have already set up state auditing entities to combat any corruption or malpractice on a national scale - and social media is playing an important role.

Existing bodies include the United Arab Emirates State Auditing Court (SAC), Saudi Arabia's National Commission against Corruption and Kuwait's Public Authority for Integrity.

"With the increase of the social networking and media channels, events and scandals news travel faster and have a much larger impact than what used to," Wadie tells AMEinfo.com. "A scandal, such as the [Libor] rate rigging in the UK currently underway, can lead to huge public online discussions.

"Stakeholders use social media tools to gather information and share views, which can be used in litigation and put members of the board in a liability suit situation, let alone public disgrace. During and after a crisis, monitoring social media channels can help counsel better assess risk and potential outcomes."

According to Wadie, a number of large, respected companies and their decision makers have come under fire in recent years for their handling of product or service failures and other management or compliance problems that garnered high-profile media coverage.

"Few, if any, industries have escaped such scrutiny," he says. "Since much of the press and internet attention these incidents receive is due to the familiarity of the brands involved, it would not be surprising if the leaders of those affected companies cited reputational damage as the most costly loss coming out of these misfortunes — topping liability pay outs or declining sales and disappointing profits that may also have followed."

State-owned corporations account for almost half of economic output in some Mena countries, heightening the level of public interest in government decisions.

Instituting corporate governance within public sector firms has recently begun to receive increased attention across the Middle East, as countries are attempt to curb widespread corruption within the public sector, or prepare public enterprises for privatisation. In either scenario, sound corporate governance measures ensure that the public gets a fair return on its national assets.

As social media boosts transparency on all fronts, there lies in increasingly crowd-sourced accountability. As the Mena region recovers from the Arab Spring, a phenomenon fuelled by social media, it is clear now that these same platforms are aiding crucial governance reforms.