Governance and Integrity Assessment (GIA) Case Study
Rayan Annan is a driven entrepreneur who came to Lebanon and saw potential in the trading industry, so he ambitiously started working in an effort to help it grow.
His challenge has been different. With the creation of the CMA and ETP regulations along with regulatory pressures, Rayan had to grow his balance sheet by diversifying his service offerings to his existing clients, as well as to attract new investors.
His implementation of corporate governance started at a time where it was required to provide oversight in order to sustain an existing business in a very challenging and changing regulatory environment, locally and regionally, while at the same time answering to customers and prospects’ needs for new services.
*The below case study was written by Mr. Rayan Annan, CEO of ROYAL Forex Trading, and does not reflect the opinions of Capital Concept sal.
Over a decade ago Rayan Annan’s entrepreneurial journey began with the launch of ROYAL Forex Trading (RFXT) in the U.S. as an online trading solution. The company attained an impressive track record as an online financial brokerage long before the digital trading revolution. In mid-2008, Rayan made a strategic decision to move operations to his home country, Lebanon, and launched ROYAL Forex Trading sal (RFXT) as a financial brokerage firm licensed by Banque du Liban (BDL), at a time when Electronic Trading Platforms (ETPs) were still not widely recognized in the country. As the CEO and Chairman, his leadership over a team of experienced traders and nance specialists reinforced the company’s business services as one of the top brokerage firms in Lebanon and the go-to firm for electronic trading.
Looking back at ROYAL’s journey, history and success, where Rayan single-handedly led a startup with one employee to become a full-fledged financial institution with currently 70 employees, and a brand being operated and regulated in 3 continents, it is undeniable that being the sole decision maker was the right call at the time. However, this had to change to project improved corporate governance processes. Facing many challenges as a 27-year-old entrepreneur doing his best to attain public trust, he was able to establish what turned out to be a very successful brokerage firm 10 years later.
As any business owner, Rayan had his fears and worries of losing control of his dream and vision, but he went through a self-learning process of evaluating risks and acknowledging his own weaknesses. He realized that real power lies in investing in corporate governance at the early stages and not worrying about losing power.
One of the key struggles was challenging the public perception that a company structure where the owner has major control over the general assembly is considered a family business. Altering this perception required exceptional efforts to enforce the institutionalized nature of ROYAL. The biggest challenge was fighting his greatest enemy, himself. As a Lebanese, emotions run high and he had to draw the line, starting with his own family, between his emotional connection to his firm and the logical decision to structure it and separate family from business affairs.
ROYAL’s board was limited to three members, giving Rayan the upper hand and full control over voting. With the implementation of corporate governance, one of the main objectives was to change this situation where anyone can vote him out and board members can independently give their opinion and make their own decisions for a healthier decision making process for ROYAL.
By 2016, Rayan stepped down as the Chairman while remaining as CEO, and appointing Dr. Zeina Zeidan as ROYAL’s Chairwoman, making history as the first woman in Lebanon to be elected to the position in a financial institution. Many people wondered why a Chairwoman was chosen. Through the past 10 years Rayan had worked with very smart female executives at ROYAL and had come to realize that female team members are a great asset for any firm as the level of diligence and details that they come equipped with are higher than those of men in general. Besides building a very successful financial firm, he wanted to contribute to a greater cause in Lebanon by assigning a female in the highest position at a financial firm in the history of Lebanon. He was convinced and confident that this is a great move for ROYAL and would lead the way for more intelligent and competent females to take leadership roles in financial institutions in Lebanon. Unfortunately, and although this is the first time in history Lebanon has a ministry representation for women affairs, it is disappointing how the ministry did not give any recognition to ROYAL for this bold move and set a good example for other Lebanese firms to follow suit.