Board and senior management changes take their toll on Dubai contractor
In late 2013, one of Arabtec Constructions regional competitors warned that the company would soon struggle because it did not have the right people.
You cant run billion-dollar projects by hiring from the market. You have to have your own people, the executive said.
Although referring to project people, that warning resonates loudly in 2015, as the Dubai Financial Market-listed contractors chairman, Khadem al-Qubaisi, and its founder, Riad Kamal, find they are not among the list of people nominated for election to the Arabtec Holding board of directors. It leaves the market and wider industry questioning who is now running the company.
The imminent departure of two high-profile board members follows a stream of senior management changes that have been made over the past year, most notably the departure of Arabtec Construction CEO Hasan Abdullah Ismaik, who left the company in May 2014, just before its share price plummeted from AED7.4 ($2) a share to AED2.9 on 19 April this year.
As the company now prepares for a future without key senior board members or management, it will also have to deal with another more alarming problem. During the fourth quarter of last year, Arabtec made a loss of AED94.4m and if it is to move from red to black, then it will need to control its spiralling costs. To do that, it will need the best people.
The man recently tasked with that challenge is Raja Ghanma, who was appointed as CEO of Arabtec Construction in March. With the company working on more than $11bn-worth of construction contracts across the Middle East, his task is a sizeable one, and whatever measures he proposes to right the ship will require the support of his board.
While the CEO may not know who will be leading the board, the priorities for the new chairman will be obvious.
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