Examining synergies between UAE corporate social responsibility laws and corporate governance frameworks

Abstract

Purpose: This paper has investigated the synergies between the UAE corporate social responsibility (CSR) laws and corporate governance (CG) frameworks. The purpose of this paper is to examine the collective impact of CSR laws and CG frameworks on fraud prevention and detection within the UAE business landscape. Design/methodology/approach: The researcher used a secondary analytical method to examine the synergies between UAE CSR laws and CG frameworks, focusing on corporate fraud detection and prevention. This method involved a comprehensive analysis of secondary sources of information from various sources such as government reports, legislation, academics and other sources such as the organization’s CSR and other industry reports. The main secondary sources included the official documents of the UAE related to CG and legal requirements on CSR, the reports of the financial institutions of UAE and designated nonfinancial businesses and professions and international guidelines such as those from the financial action task force. Findings: The UAE has various federal and emirate-level laws governing CSR and CG, emphasizing directors’ duties, disclosure and reporting. Therefore, CG and CSR have bidirectional relationship within the context of the UAE legislative framework. However, the existence of different legislation at the federal and emirate levels is undermining the effectiveness of existing laws and regulations. The UAE must now work toward harmonization of existing laws and regulations to enhance their effectiveness and enforceability across emirates. The UAE government should consider expanding CSR provisions under the CCL or amend the CSR law to include provisions on mandatory reporting for unethical practices across corporations. The evolving global regulatory landscape, including the European Union Artificial Intelligence Act (EU AI Act), highlights the UAE’s need for adaptive legal frameworks to integrate technological advancements into CG and CSR practices, ensuring ethical and transparent business conduct. Originality/value: The researcher examined the collective impact of CSR laws and CG frameworks on fraud prevention and detection within the UAE business landscape. This examination also considers the broader implications for enhancing transparency and accountability in combating money laundering and other financial crimes. The research ultimately aims to provide insights into how UAE CSR laws and CG frameworks align to foster more robust and ethical corporate practices, contributing to a broader understanding of fraud prevention and governance best practices.

Keywords: Fraud Prevention, Corporate Governance