The Inauguration of the Corporate Governance Club (CGC)

The inauguration of the Corporate Governance Club (CGC) was held at the Moataz Al Alfi Hall on Sunday, October 10, 2010. The CGC is the first Egyptian student-based academic club that is dedicated to the dissemination of corporate governance principles and best practices among undergraduate students. It aims at encouraging interdisciplinary dialogues among students of business, management, finance, economics, and accounting who share a common interest in working in a fair and transparent corporate environment.

The CGC invited Ziad Ahmed Bahaa-Eldin, Chairman of the Egyptian Financial Supervisory Authority (EFSA) as the keynote speaker of its inauguration. Bahaa-Eldin explained what is meant by corporate governance, as well as drawing the analogy between a company and a society, both having different interacting members and that those interactions should be governed by some set of ‘rules’. In case of a corporation the relationships among the different stakeholders are subject to corporate governance rules.

Bahaa-Eldin cautioned against dealing with governance merely as a ‘buzz’ word. The application of corporate governance should go beyond box-ticking and documentary compliance. Companies should focus on the true substance of governance and its applications. He also added that the market’s attitude towards governance would evolve such that governance would become an important factor in many decisions. For example, credit decisions made by banks would partially depend on the governance status of its client. Finally, Bahaa-Eldin commended the idea of the club and encouraged students to join it. He also proposed the collaboration between EFSA and CGC.

Moreover, Ahmed Abdel-Meguid, assistant professor of accounting and founding faculty advisor explained that CGC aims at spreading the awareness of corporate governance in a structured yet appealing manner among students while emphasizing the idea that being a successful business and being a ‘properly’ and ‘responsibly’ managed business are not mutually exclusive traits. He also emphasized that the focus on the bottom-line should not overshadow business ethics and financial transparency.

Regarding the members’ perspectives of the importance of corporate governance and CGC, Mohamed El-Abhar, CGC president mentioned that he was very excited about the club because it will provide valuable knowledge to students, of different universities, about a new topic (governance). He also stated that the awareness of governance has been spreading in the Egyptian corporate society over the last several years and that students should also be involved in such awareness. Ihab Badran, high-board member, argued that corporate governance is an important tool for combating corporate corruption. While Nesma Sabrah, member, stated that the club is a good base for real life experience of governance, and that it’s the first time such opportunity is made available to undergraduates.

The CGC has several planned events for this academic year. On October 21st the opening ceremony for first annual corporate governance competition will be held at AUC. The club will invite students from AUC, Ain Shams University, and Cairo University to attend two days of workshops on governance provided by experts in the field. This will be followed by a competition in which finalists will receive awards. Certificates will be awarded to all participants.

Other events include “Board Games” which are simulations of real-world board meetings. In addition presentations by governance experts will be held periodically through a series of workshops called “Board Room Dialogues”. Finally, the CGC will organize the “Best Corporate Governance Paper Competition” in which students are invited to write short articles on various aspects of governance.

The CGC is collaborating with the Egyptian Institute of Directors (EIoD), the Center for Transparency (both at the Ministry of Investment), and the Sawiris Foundation for Social Development (SFSD).