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Business leaders in the UAE now face a set of reforms that matter more than ever. Corporate governance for private companies is moving out of the shadows and into sharper focus.
With new regulations and stakeholder expectations on the rise, private business owners must stay ahead. This article explains the key developments, what companies should expect in 2025 and how to get ready effectively.
What’s changing in corporate governance in the UAE
In recent years the UAE government’s stepped up efforts to improve transparency, accountability and governance across both public and private sectors. Regulatory bodies such as the Securities and Commodities Authority, the Ministry of Economy and various free-zone regulators have issued guidelines or draft rules aimed at private companies. These reforms reflect global standards and investor expectations. That means private companies may soon face stricter requirements around reporting, board structure, risk management and stakeholder engagement.
Key highlights of what’s shifting include mandatory board charters, internal audit functions and clear separation of roles between board and management. Companies may have to disclose beneficial ownership and adopt policies for conflicts of interest. Some regions in the UAE already require companies to publish corporate governance frameworks even if they aren’t listed. These changes raise the bar for private companies. They’ll need to take governance seriously rather than treating it as a checklist.
Why private companies must act now
Many private companies believe these rules only apply to listed firms or large multinationals. That mentality’s risky. In practice we’re seeing regulators extend governance requirements into the private sphere. That means companies that aren’t prepared may find themselves responding reactively instead of proactively. Owners and boards that ignore these developments may face penalties, reputational damage or reduced access to finance.
Investors, lenders and partners are also asking more about governance frameworks before committing to deals. A company that can’t show it’s got proper governance in place may pay a premium or lose out entirely. The reforms in 2025 aren’t just a regulatory burden, they’re a strategic issue.
What to expect in 2025
Over the coming year several trends will become clearer. First, private companies will likely receive detailed guidance or binding rules on acceptable board composition including independent members. Second, reporting obligations will expand to include sustainability, anti-bribery and cyber-risk disclosures. Third, companies may have to formalise risk committees, audit committees or equivalent structures. Fourth, regulators may link licensing and renewal to governance compliance. Fifth, international investors will push for standards that mirror those in OECD countries or EU markets.
Each of these means companies must move from informal practices to documented processes. For instance the board that “just meets when needed” may need to adopt a formal charter, a calendar of meetings and minutes that reflect oversight. Internal audit functions may become expected rather than optional. Beneficial ownership data may need to be accessible and verified. Cyber-risk frameworks may need to align with UAE national cyber-security standards.
Practical steps for private companies
The transition’s manageable if you start early. First review your current governance framework. Map the board structure including whether there are independent members, how the board’s delegated and how management interacts with oversight. See where gaps exist compared to best practice and likely regulation.
Second, document policies and procedures. That means having a board charter that defines roles of the chair, non-executive directors, committees and management. Set up a schedule for board and committee meetings. Create a risk management policy and an internal audit charter if you don’t already have one. Adopt conflict of interest and whistle-blower policies. Make sure beneficial ownership records are updated and stay that way.
Third, train and educate your board and management. Governance isn’t a set of documents only. It’s how people act. Make sure board members know their duties under UAE law and any free-zone rules. Teach executives about their accountability. Offer training sessions and refresher briefings on emerging risks such as cyber threats or sustainability matters.
Fourth, engage with external parties. Talk to your auditors, legal advisors and regulators to understand what they expect. Benchmark your governance against peers in your sector. Lenders or investors often have their own governance checklists, so ask ahead of deals.
Fifth, monitor and adapt. Governance reform’s ongoing. What’s regarded as best practice today may shift tomorrow. Set up a feedback loop where board evaluations happen, oversight committees report to the board and the board reviews its own effectiveness. That way you’re not caught flat-footed when regulators update guidance or the market demands new disclosures.
Challenges and how to manage them
Private companies often find governance reform hard because they’re used to informal decision-making and flat ownership structures. Family businesses are a good example. Owners wear many hats, so a sharp separation between oversight and management can feel artificial. We advise treating this as evolution rather than revolution.
Start with governance that fits your size and stage. If you’ve got no committees, establish a simple audit or risk committee with one non-executive member. If you don’t have a formal board, define a governing council that meets quarterly and documents decisions. As you grow or engage with more external investors, you can scale up to richer governance.
Cost and resources are also issues. Setting up internal audit or independent directors can feel expensive. But you can phase it in. Prioritise the biggest gaps first, like inadequate risk oversight or ownership records. Use external service providers or part-time roles rather than full-time hires if that makes sense.
Finally, culture’s critical. Governance’s about behaviour and mindset as much as systems. If managers and owners see governance as red tape, they’ll bypass it. Leaders must explain why governance matters: it reduces surprises, protects the business and builds trust. That way the transition’s smoother.
Looking ahead
The reforms coming in 2025 might not all be finalised yet. But legislators and regulators have made their intent clear. Private companies that wait until rules are published will struggle to catch up. By starting now you embed good governance, improve oversight and reduce risk. You also position the business better for investment, growth and exit strategies.
Smart boards will turn these reforms into opportunities. A sound governance framework can help in mergers, acquisitions or raising capital. It can make the business more transparent and resilient. It signals to stakeholders that the company’s serious. So treating governance as a strategic enabler rather than overhead makes sense.
How The Knightsbridge Group can help
With over ten years advising international businesses and families, The Knightsbridge Group supports clients across the UAE and worldwide. We combine legal, tax, immigration and fiduciary expertise so we can structure governance frameworks tailored to private companies in the UAE. We help boards with governance reviews, draft board charters, establish committees and train directors. We coordinate with trustees, banks, regulators and legal partners to make sure your setup’s compliant and practical.
To review your current arrangements or plan new strategies, contact [email protected]