Every successful business begins with a vision. A cause to believe in or a clear purpose that defines where it wants to go and why it exists. Yet turning that vision into lasting success requires more than ambition. It demands structure, direction, and accountability.
Just as a skilled captain steers a Dhoni through unpredictable seas, effective governance guides a business through economic uncertainty. While the owner defines the destination, strong governance anchored by a capable board and empowered leadership ensures the organization stays on course, makes informed decisions, and endures over time.
In today’s evolving corporate landscape, governance has moved beyond compliance to become the cornerstone of sustainable growth and stakeholder confidence. It bridges the gap between vision and execution, ensuring success built on integrity and long-term value.
Why Governance Matters
Many business owners wonder why they should implement governance when their company already seems to be running well. The reason is long-term sustainability. Effective governance adds structure, accountability, and transparency, enabling owners to concentrate on strategy while entrusting day-to-day operations to their executive teams. Directors serve as custodians of the company’s vision, helping ensure that decisions support long-term value rather than short-term wins.
In essence, governance provides the framework for how an organization is led, managed, and held accountable clarifying who makes decisions, who carries them out, and who ensures compliance with legal and ethical standards.
How Proper Governance Became Necessity.
Governance surged to the forefront of global business discussions because real-world failures exposed its importance. Although the foundations were laid by early frameworks like the Cadbury Report (1992) and the UK Corporate Governance Code, it was the corporate scandals and financial crises of the 2000s that proved how vulnerable organizations can be without strong oversight.
Companies didn’t collapse due to poor products, but they fell because of weak governance, complacent ownership, unchecked executive power, and boards that lacked true independence. High-profile failures such as Enron and WorldCom triggered major reforms like the Sarbanes-Oxley Act (2002), teaching the world a clear lesson that, robust governance isn’t optional but it’s essential for long-term stability and trust.
Governance Landscape of Maldives
In the Maldives, governance principles are embedded in the Companies Act No. 07/2023 and the Capital Market Development Authority (CMDA) Corporate Governance Code.
Publicly listed companies must comply with the CMDA Code. State-owned enterprises are overseen under the Privatization and Corporatization Act 3/2013 and related governance frameworks. Banks and non banking financial institutions have to adhere to Banking Act and prudential guidelines of Maldives Monetary Authority, and while Capital Market participants are regulated by CMDA.
Privately held companies must maintain Articles of Association compliant with the Companies Act, including board composition and director responsibilities, though they are not required to follow the CMDA governance Code.
Why This Matters Now
According to December 2021 issue of Maldives Economic Review, Dhivehi Rayyithunge Bodu Store was established in December 1942 under an Act of Parliament. Is also recognised as the first registered company in the Maldives. Hence, no privately held company has surpassed the 100-year milestone.
Studies show that only around 30% of family businesses successfully transition to the second generation, about 12% make it to the third, and a mere 3% continue into the fourth generation or beyond. These findings are widely recognised in global family-business research, including analysis by the Conway Center for Family Business and the Family Business Consulting Group.
Governance is no longer just a box to tick or a compliance exercise. It has become a genuinely important conversation in Maldivian business communities for three key reasons.
- First-Generation Transition: Many first-generation entrepreneurs are approaching retirement, and without governance, succession becomes risky.
- From Survival to Scale: To grow, attract investment, and compete regionally, companies need robust plans, KPIs, and strategic board guidance.
- Upholding the Cause: Governance ensures organizations remain true to their founding vision and values as they expand.
As the Maldives enters a new era of private-sector maturity, governance will determine which businesses endure beyond the first generation.
Steering the Future
The businesses are more than a commercial venture, it is a legacy and a source of livelihoods. Without governance, even strong enterprises risk losing direction. The future of Maldivian enterprise will be defined not by size or profit, but by governance that transforms vision into enduring legacy.
Crowe Maldives remains committed to partnering with organizations seeking stronger governance, clearer decision-making, and sustainable growth. We work closely with owners, boards, regulators, and the wider business community to deliver governance and advisory solutions that are compliant, practical, and aligned with evolving market expectations.
