Abstract—The purpose of this study is to examine in some depth the extent to which national corporate governance code (CG) is followed by companies listed in Egyptian Securities Exchange (EGX) and by Securities Exchange in United Arab Emirates (UAE) both in terms of adoption and reporting. Although there is a growing acknowledgment of the importance of corporate governance all over the world and in the Middle East, the region is rarely examined in the literature or introduced or linked with the international academic arena. Data for this paper was collected from the listed companies in securities exchange of the two countries at the end of 2010. Annual reports and websites and other sources of these companies were checked. Results show more compliance to CG code by UAE companies comparing to Egyptian companies and with more reporting as well. The overall compliance in Egypt was associated with more diversity in industry and to a less degree with having foreign operations while in UAE the compliance was led by banks and financial sector which is tightly regulated from the central bank and even stronger association with having foreign operations. Ownership has no significant influence on compliance to national code of corporate governance in both countries. Index Terms—Corporate Governance Practice, Code, Egypt, UAE. I. INTRODUCTION Corporate governance (CG) receives increasing concern and attention in the Arab countries due to many reasons; one of it is that some countries experienced some financial scandals resulted from poor and corrupted management decisions and another reason was the influences of the international crisis when managers in banks especially took too risky investment decisions in US banks and hence made huge losses when the credit crisis evolved as recorded by the International Monetary Fund in 2010 [1]. The region is experiencing influential change and calls for more transparency and democracy. These calls and winds of change affected not only the political atmosphere but also the business-doing atmosphere. For this reason the Emirati Hawkamah Institute of CG allocated its 6 th conference in 2011 in Dubai [2] to discuss next challenges in CG in the region. (Hawkamah is a word means “governance” in Arabic language). Adopting CG over the last 20 years in the region passed through what was named “waves” [3]. Many countries issued codes of CG (e.g. Oman, Egypt, UAE, etc.) however, adopting the concept and techniques of CG Manuscript received September 26, 2012; revised October 27, 2012. Afaf Mubarak is with Al Hosnu University, Abu Dhabi P.O.B 38772, United Arab Emirates, ( tel. +971 2 4070700; fax +971 2 4070599; email: a.mubarak@alhosnu.ae). remaining largely voluntarily [4]. Tthere have been many studies about corporate governance practices and codes in many countries around the world (Few examples: study about Monitoring and Enforcement in the EU countries [5], Asian countries [6], Belgium [7], Germany [8] and Italy [9] But fewer studies have shed the light on the practice in the Middle East and none of them explored the issuance of codes, enforcement, impacts of codes on practice in different industries. In spite of all this importance of CG and effects on Arab business environment, there is shortage of writing about it, and very limited examination or presentation in the literature. Therefore, The aim of this paper is not to record the history of CG in this region, but to complement a gap in the literature by shedding the light on the situation in two Arab countries; Egypt and United Arab Emirates –UAE-as representatives of Arab region with some common features in between and some differences as well. The paper will be organized in the following order: First presents Egypt’s code of CG and the UAE’s, then research question will be focused and the methodology implemented to examine the research question along with data, sample, participants, tools for collecting data and analyses will be indicated. The last section will report findings and an attempt will be made to relate those results with those of similar studies. A. Codes of Corporate Governance in Egypt and the UAE On 23 rd March 2010, Egypt has launched a new index for listed companies called Standard and Poor’s/Egypt Stock Exchange Economic Social and Governance Index (known as S&P-EGX ESG). The index was constructed by the Egyptian Corporate Responsibility Center (ECRC), a joint project between UNDP and the Egyptian Institute of Directors (EIoD) affiliated to the Ministry of Investment, in collaboration with the Cairo-Alexandria Stock Exchange, using Standard and Poor’s (S&P) methodology [10]. The index is designed to track the performance of the top 100 listed companies on the Egypt Stock Exchange that demonstrate leadership on environmental, social and corporate governance (“ESG”) issues covering a number of variables. UNDP considers the index another step that compliments Egypt's efforts in improving practices of corporate governance and corporate social responsibility. Since 2000, Egypt has been modifying its laws and regulations and listing rules adding additional corporate governance provisions. The new index aims to create some sort of a healthy competition among listed companies. Many companies hurried to construct investor relations websites and developed Annual Reports – this wasn’t part of their standard practice. The index calculation is rather complex Compliance to Corporate Governance Code by Listed Companies in Egypt and the UAE Afaf Mubarak International Journal of Innovation, Management and Technology, Vol. 3, No. 5, October 2012 619 DOI: 10.7763/IJIMT.2012.V3.307