The general trend in ACWA Power is promoting renewable energy sources and international cooperation, and its governance changes are connected with it. While the company has a centralized governance structure, it grasps modern ideas about renewable energy sources and actively implements them, using the authoritative top-bottom approach. It leads to the quick growth of the company and its presence in various countries, promoting renewable energy production in them.
The company’s governance structure consists of the Board of Directors, who are nominated by shareholders and each of them has the authority and responsibilities in the specific field of expertise. The Board of Directors of the ACWA Power company consists of eleven members, including independent directors and shareholders. The members of the Board of Directors are all highly-experienced and qualified professionals in their respective fields within the industry of energy production (ACWA Power, 2021). The independent directors of the Board of Directors of the company constitute a significant part of all the Board members and provide their services of controlling and guiding the organization toward its developmental goals.
The eleven board members are all males, the majority of whom were appointed to their positions thirteen to two years ago. Within the Board members, there are no female representatives, neither within the company nor from the external environment, showing that there are no female independent directors. The overview of the profiles of the Board has demonstrated that almost all members had been working for the company before the IPO. Indeed, for example, the Chairman of the Board of Directors, Mohammad A. Abunayyan, was appointed to his position in 2008 and has been performing his duties since then and through the process of the company’s IPO (ACWA Power, 2021). An independent director Mohsen A. Khalil was appointed in 2015; his expertise in the financial field is a valuable contribution to the company’s Board of Directors (ACWA Power, 2021). At the same time, the Vice Chairman of the Board was appointed to the position in 2020, which shows that the changes in the board composition have been happening, although not after the IPO. Thus, the Board has not changed since AWCA Power launched its IPO in 2021, which demonstrates the consistency of the organization’s governance approach before and after the IPO.
The Management Committee operates the company under the direct guidance of the Board of Directors. Its governance approach is mostly centralized and authoritative: it takes the idea of renewable energy and promotes it extensively (Al-Sulayman, 2021). The company finds appropriate territories and starts building its solar and wind plants there. For example, ACWA Power makes solar plants in Morocco and has become a leader in renewables in the Moroccan market (Oxford Analytica, 2016). After becoming public, the company is especially interested in increasing its public reputation to attract funds and investors. Thus, the continuous transition towards removable energy sources is one of the essential missions of the company. It participates in international cooperation: for example, with Chinese energy companies, which have a similar centralized governance approach (Peled et al., 2019). Therefore, the company becomes an active participant in international relations, and this trend will probably increase after the recent IPO.
Another tendency in the company’s structure changes is the establishment of training institutions across the Kingdom of Saudi Arabia to facilitate the education of future specialists in the energy field. It created one such institution in 2010, which is intended to train professionals who could work in wind energy plants (Connelly & Xydis, 2021, p. 288). Such activity means that the company’s changes are intended to increase solar and wind energy production in the country and around the world. Its structure is designed to train and promote qualified specialists who can participate in its mission. The company claims directly that they see that more than 50% of the energy in Saudi Arabia will be renewable by 2030 (Carpenter, 2021). In that way, the company’s governance facilitates the promotion and implementation of green energy technologies and personnel training for those purposes.
Thus, the governance and structural changes in ACWA Power are mostly connected with its growing international cooperation and social responsibility as it becomes public. Before its IPO in 2021, the company already had a presence in many countries and implemented renewable energy plants in them (Oxford Analytica, 2016). It used top-down approaches: created a plan and then implemented it step-by-step, as in the case of the solar plant building in Morocco (Oxford Analytica, 2016). After the IPO, this authoritative leadership structure remained the same, but its plans and ideas became more progressive, as concluded from the company’s claims about renewable energy implementations. The company becomes more responsive to investors who would like to fund modern technologies, such as green energy sources.
As one can conclude, ACWA Power is constantly increasing its presence in various countries, especially where renewable energy usage was not typical before. Those are developing countries in the Middle East and North Africa, such as Morocco. The company’s recent IPO can be considered one of the consequences of this development while promoting it further. As the public company is an active participant in international relations, its reputation and constant development become more important. While the governance structure of ACWA Power is highly centralized, it quickly grasps new trends and ideas in renewable energy development. It implements them around the world using its strong authoritative leadership structure.
Reference List
ACWA Power. (2021). Board of directors. Web.
Al-Sulayman, F. (2021). ‘The rise of renewables in the Gulf States: Is the ‘Rentier effect’ still holding back the energy transition?’, International Political Economy Series, pp. 93–119.
Carpenter, C. (2021). ACWA Power CEO sees “minimum” 50% of Saudi grid power from renewables by 2030. S&P Global Platts. Web.
Connelly, C., & Xydis, G. (2021). ‘Wind energy in the Gulf Cooperation Council region: Progress, challenges, and strategies for development’, Review of Economics and Political Science, 6(4), pp. 278–291.
Oxford Analytica. (2016). ‘Saudi ACWA is set to dominate Morocco’s renewables’, Emerald Expert Briefings
Peled, H., Yu, T., & Trigkas, V. (2019). ‘The Chinese and the Saudi new energy models transcending into regional energy cooperation’, The New Silk Road Leads through the Arab Peninsula: Mast Ering Global Business and Innovation, pp. 189–202.