There are several pertinent facets to these announcements. First, both seemed to be abrupt as there was no permanent successor named in the reports. Second, both left after a relatively short tenure, with both executives having had taken on their roles in January 2016.
In the case of Jumeirah there are a number of relevant organisational changes: the chairman joined from the parent, Dubai Holding, in March and who in turn appointed Dubai Holding’s chief executive to “run the [Jumeirah Group] business together” with an interim chief executive from within the group. When a chief executive leaves three months after a new chairman is appointed to the parent, there may or may not be an issue. When the chief executive of a parent is sent in to co-run a subsidiary business the implications are not usually positive. Add everything together and one might consider the scenario that the board had lost confidence in the chief executive.
The matter with EmiratesNBD’s chief investment officer CIO has less going on around it but the short tenure with no prior succession planning does not augur well.
Here is my fear: are the decision-makers in these cases clear on whether the issue is with the executive or if it is simply an unavoidable consequence of our challenging economic times? If it is the latter then boards and CEOs could create unnecessary employee turnover and lose the very people who have information to help the company.
It is difficult to ascertain if this is going on as there is not enough information. This lack of transparency is unfortunate in the case of EmiratesNBD, a publicly listed company that is the second largest bank in the country and regulated by both the UAE Central Bank and the Dubai Financial Market. As Jumeirah is private there is a lower bar in terms of transparency, but if Dubai’s sovereign wealth fund the Investment Corporation of Dubai (ICD) can adopt global best practice for corporate governance and publish audited financials then I don’t see why other private entities could not adopt the same philosophy. As an aside, ICD is also the majority owner of Emirates NBD, the bank could learn from its largest investor.
This article was originally published in The National.