Definitive global law guides offering comparative analysis from top-ranked lawyers
CHAMBERS GLOBAL PRACTICE GUIDES
Corporate Governance 2026
Definitive global law guides offering comparative analysis from top-ranked lawyers
Contributing Editor Professor Michael Katz ENS
Global Practice Guides
Corporate Governance Contributing Editor Professor Michael Katz ENS
2026
Chambers Global Practice Guides For more than 20 years, Chambers Global Guides have ranked lawyers and law firms across the world. Chambers now offer clients a new series of Global Practice Guides, which contain practical guidance on doing legal business in key jurisdictions. We use our knowledge of the world’s best lawyers to select leading law firms in each jurisdiction to write the ‘Law & Practice’ sections. In addition, the ‘Trends & Developments’ sections analyse trends and developments in local legal markets. Disclaimer: The information in this guide is provided for general reference only, not as specific legal advice. Views expressed by the authors are not necessarily the views of the law firms in which they practise. For specific legal advice, a lawyer should be consulted. Content Management Director Claire Oxborrow Content Manager Jonathan Mendelowitz Senior Content Reviewers Sally McGonigal, Ethne Withers, Deborah Sinclair, Stephen Dinkeldein, Vivienne Button and Sean Marshall Content Reviewers Lawrence Garrett, Marianne Page, Heather Palomino, Alison Moore, Adrian Ciechacki and Michael Irvine Content Coordination Manager Nancy Tsang Senior Content Coordinators Carla Cagnina and Delicia Tasinda Content Coordinator Joanna Chivers Head of Production Jasper John Production Coordinator Genevieve Sibayan
Published by Chambers and Partners 165 Fleet Street London EC4A 2AE Tel +44 20 7606 8844 Fax +44 20 7831 5662 Web www.chambers.com
Copyright © 2026 Chambers and Partners
Contents
INTRODUCTION Contributed by Professor Michael Katz, Matthew Morrison, Madison Liebmann and Sinovuyo Damane, ENS p.6
CHINA Law and Practice p.147
Contributed by Han Kun Law Offices Trends and Developments p.159 Contributed by Han Kun Law Offices CONGO-BRAZZAVILLE Law and Practice p.164 Contributed by Cabinet Gomes
BAHRAIN Law and Practice p.11 Contributed by Hassan Radhi & Associates BENIN Law and Practice p.27 Contributed by D2A SCPA Trends and Developments p.39 Contributed by D2A SCPA BERMUDA Law and Practice p.44 Contributed by Wakefield Quin Limited
COTE D’IVOIRE Law and Practice p.175
Contributed by Houda Law Firm Trends and Developments p.194 Contributed by Houda Law Firm
CYPRUS Law and Practice p.201 Contributed by Michael Kyprianou & Co LLC Trends and Developments p.215 Contributed by Michael Kyprianou & Co LLC
BRAZIL Trends and Developments p.59 Contributed by Passos e Sticca Advogados Associados
BULGARIA Law and Practice p.65 Contributed by Vassilev & Partners Law Firm
FRANCE Law and Practice p.222 Contributed by Aurès Trends and Developments p.242 Contributed by Vermeille & Co
BURKINA FASO Law and Practice p.80 Contributed by SCP Yanogo Bobson
GERMANY Law and Practice p.249 Contributed by POELLATH
CABO VERDE Law and Practice p.91 Contributed by Raposo Bernardo & Associados Trends and Developments p.106 Contributed by Raposo Bernardo & Associados
Trends and Developments p.268 Contributed by Freshfields PartG mbB GHANA Law and Practice p.277 Contributed by Addison Bright Sloane GIBRALTAR Law and Practice p.298 Contributed by ISOLAS LLP HONG KONG SAR, CHINA Law and Practice p.316 Contributed by Parkside Chambers Trends and Developments p.337 Contributed by Parkside Chambers
CAMEROON Law and Practice p.111 Contributed by Besong & Co CANADA Law and Practice p.127 Contributed by Fasken
Trends and Developments p.140 Contributed by Dentons Canada LLP
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Contents
INDONESIA Law and Practice p.342 Contributed by SSEK Law Firm
NETHERLANDS Law and Practice p.520 Contributed by Stibbe
ITALY Law and Practice p.354 Contributed by FIVERS Studio Legale e Tributario Trends and Developments p.375 Contributed by Fivers Studio Legale e Tributario JAPAN Law and Practice p.380 Contributed by Nagashima Ohno & Tsunematsu Trends and Developments p.397 Contributed by Anderson Mori & Tomotsune
NEW ZEALAND Law and Practice p.537 Contributed by Webb Henderson
NIGERIA Law and Practice p.553
Contributed by Jackson, Etti & Edu Trends and Developments p.570 Contributed by Jackson, Etti & Edu PUERTO RICO Law and Practice p.576 Contributed by Ferraiuoli LLC RWANDA Trends and Developments p.589 Contributed by RR Associates SENEGAL Law and Practice p.597 Contributed by SCP Houda & Associés Trends and Developments p.615 Contributed by SCP Houda & Associés SOUTH AFRICA Law and Practice p.620 Contributed by ENS Trends and Developments p.638 Contributed by ENS SOUTH KOREA Law and Practice p.645 Contributed by Jipyong LLC Trends and Developments p.663 Contributed by Jipyong LLC SWITZERLAND Law and Practice p.671 Contributed by Schellenberg Wittmer Ltd Trends and Developments p.689 Contributed by Prager Dreifuss AG
KENYA Law and Practice p.404
Contributed by Cliffe Dekker Hofmeyr Trends and Developments p.424 Contributed by Cliffe Dekker Hofmeyr
LIECHTENSTEIN Law and Practice p.432 Contributed by Schurti Partners Attorneys at Law Ltd
MACAU SAR, CHINA Law and Practice p.443
Contributed by Riquito Advogados Trends and Developments p.459 Contributed by Riquito Advogados
MAURITIUS Law and Practice p.465 Contributed by ENS
MEXICO Law and Practice p.485 Contributed by Vázquez Aldana, Hernández Gómez & Associates (VAHG) NAMIBIA Law and Practice p.505 Contributed by ENS Namibia (incorporated as Lorentz Angula Inc.)
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Contents
UNITED ARAB EMIRATES Law and Practice p.693 Contributed by ADG Legal
USA Law and Practice p.714
Contributed by Baker McKenzie Trends and Developments p.732 Contributed by Baker McKenzie
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INTRODUCTION
Contributed by: Professor Michael Katz, Matthew Morrison, Madison Liebmann and Sinovuyo Damane, ENS
ENS is Africa’s largest law firm, with over 600 special - ist practitioners, and can deliver on clients’ business requirements across all major industries and across the African continent. The firm is able to leverage its resources to deliver legal solutions that suit cli - ents’ pricing preferences and timeframes. Over many years, ENS has developed a large knowledge base and a deep understanding of local nuances and ways of doing business. The firm has practical experience in working on the ground and direct access to high-
end, professional contacts across the continent, en - suring consistent quality and world-class service. Some of its practitioners are qualified to practice English and French law and have extensive experi - ence in the legal codes of OHADA used in West and Central Africa. ENS has 48 ranked departments and 90 ranked lawyers in Chambers Global 2026, and is committed to creating enduring client relationships and providing to-the-point, jargon-free advice.
Contributing Editor
Professor Michael Katz is chair of ENS and specialises in corporate and commercial law, including advising on M&A, competition law, tax law, privatisation and deregulation, project finance and non-recourse financing,
public-private partnerships, empowerment ventures and banking and financial markets. He is regularly quoted in the media and speaks at a number of international and domestic conferences and high- profile events. Michael publishes numerous articles, chapters and papers on legal and fiscal topics, including co-authoring the Butterworths Company Law Precedents (four volumes) and South Africa’s contribution to the United Nations’ and Harvard University’s Corporate Law Tools project. Co-Authors
Madison Liebmann is a senior associate in ENS’ corporate commercial department, and specialises in M&A, financial services law and regulation as well as commercial contracts. She has
Matthew Morrison is a director in ENS’ corporate commercial department. He specialises in financial services law and regulation, as well as corporate finance work for listed and unlisted companies,
advised privately owned companies, JSE-listed companies and financial institutions on these matters. Madison’s experience includes drafting and negotiating a range of commercial agreements and due diligence investigations. She has several years’ experience in debt capital markets, including securitisations, as well as general debt finance, preference share funding and banking and securities law. Madison is a member of the Law Society of the Northern Provinces in South Africa.
commercial contracts, private equity and general M&A. Matthew has extensive experience in M&A structuring and implementation, the listing and delisting of companies from JSE Limited, governance, schemes of arrangement, broad-based black economic empowerment transactions, and advising on general commercial law issues for listed and unlisted companies. His work is regularly of a cross-border nature and he is recorded on the practising roll of solicitors in the Supreme Court of
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INTRODUCTION Contributed by: Professor Michael Katz, Matthew Morrison, Madison Liebmann and Sinovuyo Damane, ENS
England and Wales, and is a member of the Law Society of the Northern Provinces in South Africa.
Sinovuyo Damane is an associate at ENS. She has experience in general corporate law, M&A, financial services law and regulation and general corporate governance. Her experience includes conducting due
diligence investigations, drafting commercial agreements, and being involved in advising JSE- listed and unlisted companies in local and cross- border transactions.
ENS The MARC | Tower 1, 129 Rivonia Road Sandton, Johannesburg Gauteng, 2196 South Africa Tel: +27 112 697 600
Email: info@ensafrica.com Web: www.ensafrica.com
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INTRODUCTION Contributed by: Professor Michael Katz, Matthew Morrison, Madison Liebmann and Sinovuyo Damane, ENS
Corporate Governance in 2026: Navigating Convergence and Complexity In an era defined by geopolitical fragmentation, accel - erating technological disruption and enhanced regu - latory focus, effective governance is now more of a strategic imperative than ever. The country-specific chapters in this guide examine how these global dynamics are reflected in local legal and regulatory frameworks, providing practitioners with a detailed view of the rules, standards and market expectations that boards and governing bodies must meet. In this introduction we draw out certain themes common to the cross-jurisdictional overview. These five central themes of 2026 are: the ongoing reform of govern - ance codes and listing standards; the governance of artificial intelligence; the impact of the shifting political landscape on ESG; the heightened focus on geopoliti - cal risk in board-level oversight; and the intensification of global sanctions, anti-money laundering and ben - eficial ownership transparency requirements. Regulatory Reform Corporate governance codes and company law continue to be revised across the globe, reflecting a shared conviction among regulators and standard- setters that governance frameworks must keep pace with the complexity of modern enterprise. The year 2026 sees several significant reforms reach maturity. In the South African context, notable developments include the release of the King V Report on Corpo - rate Governance and significant amendments to the South African Companies Act to keep pace with local and global governance shifts, in particular oversight of executive remuneration. Stock exchange require - ments are also evolving: the JSE simplification pro - ject, effective from January 2026, has followed global simplification projects to compete for capital and also introduced mandatory fit-and-proper assessments for prospective directors and enhanced shareholder over - sight of executive remuneration. The European Union has been at the forefront of this movement. In March 2026, the EU’s comprehensive reform package took effect, recalibrating two corner - stone directives: the Corporate Sustainability Report - ing Directive (CSRD), which sets out what companies must disclose about their environmental and social performance, and the Corporate Sustainability Due
Diligence Directive (CSDDD), which obliges large enterprises to identify, assess and mitigate human rights and environmental risks across their operations and supply chains. The reforms narrow the range of companies subject to these obligations and stream - line reporting requirements, though the underlying policy commitments remain intact. Globally, the G20/OECD Principles of Corporate Governance, revised in 2023, continue to serve as the benchmark against which national frameworks are evaluated. Stock exchanges are also tightening their governance expectations. Across jurisdictions, reforms to listing rules are introducing mandatory fit- and-proper assessments for prospective directors, expanded shareholder oversight of executive remu - neration and enhanced requirements for diversity dis - closure. These developments illustrate a global trend towards greater transparency, accountability and rig - our in the governance of publicly traded companies. Artificial intelligence and technology governance Artificial intelligence has rapidly emerged as a gen - erational governance challenge for boards in 2026. Regulators, standard-setters and investors across a growing number of jurisdictions are grappling with how existing oversight frameworks should apply to AI deployment, and whether new, purpose-built gov - ernance structures are required. Boards face a dual focus: they must oversee their organisations’ adoption of AI systems while considering how AI-powered tools can enhance their own decision-making capabilities. Regulatory approaches vary considerably. Some juris - dictions have enacted comprehensive, cross-sectoral AI legislation; others have opted to embed AI gov - ernance within existing supervisory frameworks for conduct, risk management and data protection; and many are still at the stage of developing national poli - cy frameworks or consulting on draft regulation. What is consistent is the expectation that boards should establish clear accountability for AI-related decisions, risks and outcomes, an expectation that is likely to intensify as adoption accelerates. The jurisdiction- specific chapters that follow examine how individual markets are responding in practice.
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INTRODUCTION Contributed by: Professor Michael Katz, Matthew Morrison, Madison Liebmann and Sinovuyo Damane, ENS
For boards, the governance imperative extends beyond compliance with any single regulatory frame - work. AI systems that produce biased outputs, com - promise personal data or generate content that infring - es third-party rights can expose companies to liability under a range of existing legal obligations, including directors’ general duties in common law jurisdictions to act with care and in the company’s best interests. The precise management of these risks, and the gov - ernance structures boards are adopting in response, differ across jurisdictions and are examined in the chapters that follow. ESG, sustainability reporting and the politics of disclosure The sustainability governance landscape in 2026 is defined by two countervailing forces: the continued expansion of mandatory reporting frameworks in most major economies, and the political backlash against ESG in certain jurisdictions. Boards must navigate this fragmented terrain with care, ensuring that their sus - tainability strategies and disclosures are grounded in material business risks and supported by verifiable data, rather than broad aspirational commitments. Each component of ESG remains equally relevant but the content and governance of each is evolving in its detail as global and jurisdictional focus points evolve. On the reporting front, frameworks aligned with the International Sustainability Standards Board’s IFRS S1 and S2 standards continue to gain traction glob - ally, with more than 20 jurisdictions having adopted or aligned with the standards and many others mov - ing towards implementation, collectively represent - ing a significant share of global GDP. In the European Union, the Corporate Sustainability Reporting Direc - tive remains in force, although the recently agreed sustainability Omnibus package significantly reduces the number of in-scope companies and streamlines certain reporting obligations to alleviate administra - tive burden and support competitiveness. The United Kingdom has published UK Sustainability Report - ing Standards S1 and S2, which are closely aligned with the ISSB framework while incorporating limited UK-specific modifications. In Namibia, sustainability reporting remains largely principles-based, with no overarching statutory mandate; instead, disclosure expectations are driven by the NamCode and Namib -
ia Securities Exchange requirements, which require listed companies to incorporate ESG considerations into their annual integrated reports while encouraging alignment with evolving international standards. Meanwhile, ESG litigation continues to evolve, with claims becoming more sophisticated in their framing and more diversified in their targets, now extending to company directors, investors and professional advis - ers. The trend towards greenwashing litigation and challenging the bona fides of company reporting and marketing shows no sign of abating in jurisdictions where environmental and consumer protection laws provide claimants with ready causes of action. Boards must ensure that governance structures (including dedicated ESG or sustainability committees, clear disclosure controls and robust data governance) are fit for purpose in this rapidly evolving environment. Geopolitical risk, trade policy and sanctions compliance Geopolitical tensions and the fragmentation of the global trading system have elevated geopolitical risk from a peripheral concern to a central element of board-level oversight. The Russia-Ukraine conflict continues to impose supply chain constraints, energy security costs and fragmented alliances, particularly in Europe, while broader trade policy volatility (includ - ing sweeping tariff measures and the threat of further increases) is forcing boards to strengthen scenario planning and supply chain governance. For multinational enterprises, the challenge is acute. Directors must integrate geopolitical factors into enterprise risk management frameworks as structur - al features of the operating environment, rather than treating them as episodic crises. Many governance codes now require boards to ensure business conti - nuity arrangements that allow for organisational resil - ience under conditions of volatility, including the abil - ity to withstand and recover from acute shocks. The fiduciary duties of directors increasingly encompass an obligation to understand and respond to geopoliti - cal risks that may materially affect operations, supply chains, market access and the regulatory environ - ment.
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INTRODUCTION Contributed by: Professor Michael Katz, Matthew Morrison, Madison Liebmann and Sinovuyo Damane, ENS
Sanctions and tariff compliance and its rapid pace of change adds further dimensions. Board-level over - sight of international sanctions and tariffs, whether emanating from the United Nations Security Coun - cil, the European Union, the United States or other authorities, is expected in virtually all jurisdictions. Directors who fail to ensure adequate sanctions com - pliance frameworks may face personal liability risks, and the accelerating use of sanctions as a tool of for - eign policy shows no sign of diminishing. Anti-money laundering and beneficial ownership transparency Linked to the above, anti-money laundering regula - tion and beneficial ownership transparency continue to intensify across jurisdictions. Boards of account - able institutions, including financial services firms, company service providers and other designated entities, are required to ensure that their organisa - tions maintain robust systems for client identification, suspicious transaction reporting and record-keeping in line with increasingly detailed and prescriptive regu - latory requirements. The global push for beneficial ownership transpar - ency, driven by the Financial Action Task Force and reinforced through mutual evaluation processes, is prompting legislative reforms that require companies to record and disclose prescribed information regard - ing the natural persons who are the ultimate beneficial owners. These reforms have significant implications for corporate governance. Several jurisdictions have recently emerged from, or are navigating, enhanced monitoring processes, dem - onstrating that the consequences of systemic AML deficiencies extend well beyond individual companies to affect entire economies’ reputations and access to the international financial system. Board composition, effectiveness and shareholder engagement The questions of board composition, how effectively it operates, and how it engages with shareholders remain at the heart of the governance debate. Across
jurisdictions, regulators, investors and proxy advisory firms are demanding greater transparency on board composition, including diversity, skills matrices, inde - pendence and succession planning. In several markets, governance codes now require boards to assume explicit responsibility for achieving a balanced composition that reflects the organisa - tion’s strategic needs, incorporating diversity across age, culture, race, gender and competencies. Shareholder engagement is also evolving. Regulatory shifts, including revised guidance on beneficial own - ership reporting, changes to the proxy proposal pro - cess and executive measures targeting proxy advisory firms, are reshaping the way companies engage with their investors in some jurisdictions. Boards must take a more proactive approach to structuring engagement and demonstrating responsiveness to shareholder perspectives, particularly as traditional channels of engagement become less predictable. Looking ahead The corporate governance landscape of 2026 will continue to evolve around certain fundamental prin - ciples (transparency, accountability, stakeholder inclu - sivity and long-term value creation). These will need to be integrated with external factors such as the pace of technological and global political change and the regulatory response thereto. Boards that treat gov - ernance as a strategic tool for building resilience and credibility, rather than as a compliance burden, will be best positioned to navigate this complexity. The jurisdiction-specific chapters that follow provide detailed analysis of how each of these global themes is reflected in local law, regulation and practice. We commend this Guide to senior in-house counsel, board members and governance professionals as a practical resource for understanding the expectations they face and the frameworks within which they must operate. The Trends and Developments articles that accompany many chapters offer deeper analysis of particular reform initiatives, emerging risks and oppor - tunities that merit close attention in the year ahead.
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BAHRAIN
Iran
Bahrain
Qatar
Law and Practice Contributed by: Noor Radhi, Fatima Alali, Saifuddin Mahmood and Hasan Sanad Hassan Radhi & Associates
Saudi Arabia
U.A.E.
Contents 1. Corporate Governance Requirements p.13 1.1 Corporate Forms and Governance Requirements p.13 1.2 Corporate Governance Legislation and Regulation p.14 1.3 Companies With Publicly Traded Shares p.15 1.4 Stock Exchange Requirements Developments p.16
5. Corporate Reporting and Disclosures p.24 5.1 Financial Reporting Requirements p.24 5.2 Corporate Governance Arrangement Disclosure p.24 5.3 Incorporation and Registration p.24 5.4 Global Anti-Money Laundering p.25 6. Audit, Risk and Internal Controls p.25 6.1 External Auditors p.25 6.2 Risk Management and Internal Controls p.25 7. Environmental, Social and Governance p.25
2. Corporate Management p.17 2.1 Principal Bodies or Functions p.17 2.2 Types of Decisions p.17 2.3 Decision-Making Processes p.18 3. Directors and Officers p.18
7.1 ESG Requirements p.25 7.2 ESG Developments p.26 8. Artificial Intelligence p.26 8.1 Board Oversight of AI p.26 8.2 AI Use-Related Risks p.26
3.1 Board Structure p.18 3.2 Board Members p.19 3.3 Board Composition p.19 3.4 Appointment and Removal of Directors/Officers p.19 3.5 Independence of Directors p.20 3.6 Legal Duties of Directors/Officers p.20 3.7 Responsibility/Accountability of Directors p.20 3.8 Breach of Directors’ Duties p.20 3.9 Other Claims/Enforcement Against Directors/Officers p.21 3.10 Payments to Directors/Officers p.21 4. Shareholders p.21 4.1 Companies and Shareholders p.21 4.2 Role of Shareholders p.21 4.3 Shareholder Meetings p.22 4.4 Shareholder Claims p.23 4.5 Shareholders in Publicly Traded Companies p.23
8.3 Liability Exposures Arising From AI Use p.26 8.4 Key Disclosure Requirements for AI Use p.26
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BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali, Saifuddin Mahmood and Hasan Sanad, Hassan Radhi & Associates
Hassan Radhi & Associates (HRA) is one of the larg - est and most reputable leading law firms in Bahrain and the Gulf region. The firm was founded in 1974 by senior partner Dr Hassan Ali Radhi. HRA has more than 50 years of experience in the legal sector, es - pecially in banking, finance and corporate law. The firm has a team of highly qualified lawyers, supported by a dedicated and professional administrative team
that provides exceptional legal services, locally and internationally, in Arabic and English. HRA, the only member of the Lex Mundi global network in Bah - rain, can provide its clients with access to more than 22,000 lawyers with in-depth experience in 125-plus countries worldwide, all from a single point of con - tact.
Authors
Noor Radhi is the deputy senior partner and head of the banking and finance group at Hassan Radhi & Associates. She manages the banking team with her extensive experience and in-depth knowledge of the rules
Saifuddin Mahmood is a senior legal consultant at Hassan Radhi & Associates with ample experience in banking and finance law, investment management, company law, commercial law, labour law, maritime
and regulations governing the banking and financial services industry in Bahrain. Noor has engaged in many due diligence projects, financing projects, mergers and acquisitions, liquidation procedures and dispute resolutions, in addition to advising on various legal issues relating to contracts, civil aviation, corporate, copyright and employment. She has been recognised internationally for her expertise in corporate finance and dispute resolution. Fatima Alali is a partner heading the corporate and M&A team at Hassan Radhi & Associates, and a certified arbitrator. She provides legal advice on various matters and has led a number of due diligence projects. She has also acted in the incorporation of various types of companies, including financial institutions licensed by the Central Bank of Bahrain, and in mergers and acquisitions, restructuring and liquidation projects, in addition to her work in dispute resolution (including local and international arbitration). Fatima has published works including Doing Business in Bahrain, as well as works on foreign direct investment and consumer protection.
law and international arbitration. Saifuddin is the co-author of a Doing Business in Bahrain chapter, a project of The World Bank, and has written many legal articles and participated in legal research.
Hasan Sanad is an associate at Hassan Radhi & Associates admitted before the Ministry of Justice and Islamic Affairs in Bahrain. He advises on corporate and banking matters, including corporate structuring,
regulatory compliance and banking transactions. Hasan has assisted with due diligence, mergers and transaction documentation. He also drafts and reviews commercial agreements and supports civil litigation matters as part of the firm’s corporate team. Hasan is a co-author of Doing Business in Bahrain.
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BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali, Saifuddin Mahmood and Hasan Sanad, Hassan Radhi & Associates
Hassan Radhi & Associates Office 91 and 92, 9th Floor, AlBaraka Tower (A) Building 372, Road 4611, Block 346 Bahrain Bay, Sea Front Manama PO Box 5366
Kingdom of Bahrain Tel: +973 1753 5252 Fax: +973 1753 5252
Email: Info@hassanradhi.com Web: www.hassanradhi.com
1. Corporate Governance Requirements 1.1 Corporate Forms and Governance Requirements Persons conducting business in Bahrain may choose from a set list of business structures set out in the Commercial Companies Law (CCL) promulgated by Decree Law No (21) of 2001, which is amended peri - odically. The most common types of business entities in Bah - rain are limited liability companies, public joint stock companies and closed joint stock companies – all entities in which the shareholders’ liability towards creditors is limited to their shareholding in the capital (ie, limited liability). Limited Liability Companies Limited liability companies are companies with one or more owners whose liability is limited only to the extent of the shareholding in the capital. Partners may not resort to public subscription for raising shares or loan capital. This type of company is barred from undertaking insurance activities, banking or fund investment for third parties (shareholders of this kind are referred to as “partners”). Limited liability companies are not required to have a board of directors unless the number of partners exceeds ten.
Joint Stock Companies These include the following.
• Closed joint stock company: Established with a minimum of two shareholders and a minimum share capital of BHD50,000 (around USD132,625); the shares of the company may not be publicly offered. The law permits such companies to be established by a single shareholder, subject to conditions to be issued by the Minister of Industry and Commerce. • Public joint stock company: Established by a num - ber of persons who subscribe to it via negotiable shares. The latter form is subject to a minimum share capital of BHD1 million (around USD2.6 million). Certain government-related companies operate under a special legal regime. Companies that are wholly or majority-owned by the state, or established by decree, are not fully subject to the CCL; instead, they are pri - marily governed by their founding instruments, with the law applying only where it does not conflict with those arrangements. General Partnerships/Simple Commandite Partnerships Less regulated types of business entities include gen - eral partnerships companies and simple commandite partnerships.
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BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali, Saifuddin Mahmood and Hasan Sanad, Hassan Radhi & Associates
1.2 Corporate Governance Legislation and Regulation The main legislation related to corporate governance that must be observed by companies incorporated in Bahrain is as follows. The CCL The CCL is the law governing commercial companies, including their types, formation and management. The CCL has been in force since 2001 and has subse - quently been amended, with the latest amendment issued in September 2025. It includes rules related to the segregation of powers and the scope of powers of the board of directors and shareholders, as well as accountability and cases of personal liability. Rules relating to disclosure of interests by board members and avoidance of conflict of interest are included in the CCL. The Corporate Governance Code The Corporate Governance Code was issued by Deci - sion No (19) of 2018 by the Minister of Industry and Commerce pursuant to Article 358 bis of the CCL. The Code provides the minimum required standards for corporate governance and applies to all joint stock companies incorporated in Bahrain, with the excep - tion of companies carrying out regulated financial ser - vices and licensed by the CBB. The Code includes 11 main corporate governance principles, as follows: • the board shall be effective, qualified and have the required expertise; • the directors and executive management shall have full loyalty to the company; • there must be rigorous controls for financial audit and reporting, internal control and compliance with the law; • the requirement for effective procedures for appointment, training and evaluation of the direc - tors; • fair and responsible remuneration for directors and senior officers; • the requirement for a clear and efficient manage - ment structure with defined job titles, powers, roles and responsibilities;
A general partnership company is owned by two or more persons whose liability is unlimited and who are jointly and severally liable to cover the company’s debts and commitments. The company’s name con - sists of the name of one or more of the partners with the addition of “and Co” to indicate the partnership. A simple commandite partnership is one established by two types of partners: joint partners and sleeping partners. In a commandite partnership, the joint partners are involved in the management of the company and have unlimited liability towards creditors. Sleeping partners are not involved in the management of the company and are only liable for the obligations of the company to the extent of their shareholding in the capital. Branches of Foreign Companies Another form of business entity is the branch of a foreign company, which must be guaranteed by the head office of the company. The activities of a busi - ness entity licensed as a “branch” shall match the activities of the head office. Branches licensed as rep - resentative offices are limited to gathering financial, economic and commercial information, carrying out general promotional activities and providing general assistance of a non-specific nature to customers of Holding companies are very common in Bahrain. They may be in the form of a public or private joint stock company, or a limited liability company. The role of holding companies is limited to the invest - ment of funds, ownership of shares in its subsidiaries, management of its subsidiaries and the provision of financing or guarantees for its affiliates. Commercial Companies Commercial companies are mainly governed by the CCL but may be subject to other laws and regulations depending on the nature of their activity. Most impor - tantly, companies licensed to provide regulated finan - cial services by the Central Bank of Bahrain (CBB) are subject to the laws and regulations concerning regulated services. the parent company. Holding Companies
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BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali, Saifuddin Mahmood and Hasan Sanad, Hassan Radhi & Associates
rate Governance Requirements for Companies With Publicly Traded Shares . 1.3 Companies With Publicly Traded Shares Within the CCL, the provisions for each type of com - pany are included in a separate chapter. The chapter relating to the management of public joint stock com - panies includes the most stringent rules. For exam - ple, the rules relating to the board of directors require a minimum of five directors, which must include independent and non-executive directors. The rules also cover director appointments and elections, the requirement to have an audit committee within the board and the limitation on director remuneration in years when no dividends are to be paid to sharehold - ers. The rules under the CCL are mandatory. The Corporate Governance Code applies to all types of companies, with an emphasis on the importance of compliance – especially by joint stock companies due to the role they play in the national economy. Compli - ance with the principles of the Corporate Governance Code is on a comply-or-explain basis, and the stand - ard applied by the Ministry of Industry and Commerce for listed and public joint stock companies is higher than that applied to the other forms of companies. In addition to the CCL and Corporate Governance Code, additional rules issued by the CBB and the Bahrain Bourse are put in place for listed companies, with the following including provisions related to cor - porate governance. Bahrain Bourse Listing Rules These Listing Rules were approved by Board of Direc - tors Resolution (3/5/2024) in its Meeting (5/2024) dat - ed 30/09/2024. Their purpose is to set out the require - ments that must be complied with by all applicants, issuers, directors, officers, advisers and other persons to whom these Listing Rules are directed. The Listing Rules are composed of requirements that have to be met before securities may be listed and continuing obligations that an issuer must comply with after list - ing. The principles on which these Listing Rules are based include the following:
• shareholder involvement (by encouraging commu - nication and participation); • disclosure of companies’ corporate governance; • for companies that offer Islamic services, adher - ence to the principles of Sharia; • integrity of financial statements and recognition of the importance of external auditors as a responsi - bility of the board; and • social responsibility. Boards of joint stock companies, closed and public, are required to form a corporate governance commit - tee, which appoints a corporate governance officer to ensure compliance with the corporate governance rules and submit a corporate governance report annu - ally to the Ministry of Industry and Commerce, setting out the measures taken to comply with each principle (and with a special section for related-party transac - tions). The principles of the Corporate Governance Code should be observed by all types of companies, includ - ing limited liability companies. The reporting require - ments, however, are enforced only on closed and public joint stock companies. The Rulebook of the CBB The Corporate Governance Code is embedded in the High-Level Control Module of the Rulebook of the CBB, applicable to each category of CBB licensee. This is issued by the CBB, and compliance therewith is supervised by the CBB. The Rulebook includes the first nine principles of the Corporate Governance The memorandum and articles of association of a company (the “Constitutional Documents”), produced by the company’s shareholders, provide company- specific rules pertaining to the authority of the board, the extent of its powers, its duties and remuneration. Rules, Regulations and Circulars The rules, regulations and circulars of the CBB and the Bahrain Bourse (the company taking over the powers of the Bahrain Stock Exchange) applicable to listed companies (all public companies and some listed closed companies) are detailed in 1.3 Corpo- Code listed in the foregoing. Constitutional Documents
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BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali, Saifuddin Mahmood and Hasan Sanad, Hassan Radhi & Associates
• issuers shall have acceptable standards of quality, operations, management experience and expertise; • investors and their professional advisers shall be kept fully informed by the issuer of all facts and information that might affect their existing or potential interests in the issuer – in particular, full, accurate and timely disclosure shall be made of any information that may reasonably be expected to have a material effect on the price of, value of or market activity in the securities of issuers; • all holders of any class of securities will be treated fairly and equitably; • directors, officers and advisers of issuers will main - tain the highest standards of integrity, accountabil - ity, corporate governance and responsibility; and • directors of an issuer shall act in the interests of shareholders as a whole. Disclosure Standards of the Bahrain Bourse Disclosure Standards were issued by Bahrain Mon - etary Agency (now known as the CBB) pursuant to its circular dated 3 December 2003. Except for the first chapter, which is superseded by the Offering of Securities Module under Rulebook 6, the Disclosure Standards still apply to listings, public offerings and sales of securities in Bahrain. The Disclosure Standards provide, inter alia: • guidelines for trading by directors and senior man - agement; and • policy pertaining to the immediate public disclo - sure of material information regarding an issuer’s affairs, or about events or conditions in the market that will affect the issuer’s securities, relating to business that would significantly affect the market price or value of any of the issuer’s securities – or that would reasonably be expected to have a major influence on any investor’s decisions. Offering of Securities Module Issued by the CBB This Module contains the CBB’s Directive (as amend - ed from time to time) relating to the issuing and offer - ing of securities. The directive in this Module is appli - cable to all market participants and relevant persons, including but not limited to:
• issuers of securities or any person acting on their behalf; • listed companies; • any person acting for or on behalf of listed compa - nies; and • shareholders of listed companies. This Module describes, among other things, the eli - gibility criteria for issuing securities and the applica - tion procedures for obtaining the regulator’s approv - al. Most importantly, it explains the requirement for companies to prepare a prospectus or offering circular when they offer their securities to the public or on private placement basis. The directors of the com - pany must accept responsibility for the accuracy of the content of such prospectus or offering circular. Takeovers, Mergers and Acquisitions Module of the CBB This Module applies to persons involved in, engaging in or intending to engage in an offer for, takeover or merger or acquisition of a controlling interest (30% or more) in a company whose primary listing of its ordinary equity securities is on a licensed exchange in Bahrain. Each director of an offeror and the offeree company, as well as those acting in concert and their professional advisers, has a responsibility to ensure, insofar as they are reasonably able, that the require- ments of the Module are complied with in transactions that are subject to it. While this Module applies to listed companies in which control may change, as mentioned previously, there are circumstances – such as where an unlisted company is a target of a listed company (reverse take - over) – in which it is necessary to consider the spirit, general principles, standards and rules of this Module wherever it is applicable. When there is any doubt as to whether a proposed course of conduct accords with the spirit, general principles, standards and rules of this Module, parties or their advisers should consult the CBB in advance. 1.4 Stock Exchange Requirements Developments The most recent amendments to the Bahrain Bourse Listing Rules, made in 2024, have strengthened cor - porate governance primarily through enhanced disclo -
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BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali, Saifuddin Mahmood and Hasan Sanad, Hassan Radhi & Associates
sure and transparency requirements. The key change is the introduction of mandatory ESG reporting, requir - ing listed companies to adopt an ESG framework and disclose related information within a set timeframe. In addition, the rules tighten ongoing disclosure obli - gations, including more robust reporting of material events, related-party and key person transactions, and capital changes. While the updates do not signifi - cantly alter formal board composition requirements, they increase board accountability, particularly around conflicts of interest and oversight. Overall, the chang - es enhance shareholder transparency and protection, aligning Bahrain’s framework more closely with inter - national governance standards. The management of the company encompasses: • the board of directors in joint stock companies, including the committees formed within the board; • the board of managers in limited liability compa - nies; and • the general meeting of the shareholders (ordinary and extraordinary, as detailed in 4.3 Shareholder Meetings ). The powers of the board of managers in limited liability companies pursuant to the CCL are determined by the company’s Constitutional Documents. 2. Corporate Management 2.1 Principal Bodies or Functions The board of directors of joint stock companies has the power to run the management of the company subject to certain restrictions that specifically require the approval of the general meeting of the sharehold - ers as detailed in 2.2 Decisions Made by Particular Bodies . Boards of joint stock companies are required to form an audit committee from amongst the members of the board. The audit committee shall have the mandate of reviewing the audit, accounting and financial prac - tices of the company, and the extent of compliance with the provisions of the law and the Constitutional Documents. To fulfil its mandate, the audit committee
shall be able to access all of the company’s records, documents and information, and shall submit a report of its work in the annual report to the shareholders. The Corporate Governance Code The Corporate Governance Code requires the com - panies subject to its provisions to set up audit, remu - neration, nomination and corporate governance com - mittees from amongst the board members as required by the Code, and allows the board to decide whether to set up additional specialised committees as neces - sitated by the activities of the company. • The audit committee is in charge of reviewing the company’s audit, financial and accounting proce - dures, and ensuring compliance with the law and the company’s Constitutional Documents. • The remuneration committee is in charge of review - ing and setting the basis for remunerating directors and senior managers. • The nomination committee is in charge of making nominations and recommendations for directorship and senior management positions in the company. It is also in charge of reviewing the independence criteria and status of directors on an ongoing basis – this committee may be merged with the remu - neration committee (and usually is). • The corporate governance committee is in charge of reviewing the company’s corporate governance policy and making recommendations to ensure compliance – this committee may be merged with the nomination and remuneration committees. 2.2 Types of Decisions The board of directors of a joint stock company has the authority, by law, to perform all actions necessary for the management of the company in accordance with its objectives, except as restricted by law, the Constitutional Documents or general meeting resolu - tions. The CBB Rulebook provides more detailed guidance on the role of the board, but this guidance can apply to all companies. This role includes: • setting the overall business strategy of the com - pany;
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BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali, Saifuddin Mahmood and Hasan Sanad, Hassan Radhi & Associates
• ensuring that financial statements are prepared in a manner that accurately reflects the company’s financial position; • monitoring management performance; • convening and preparing the agenda for share - holder meetings; • monitoring conflicts of interest; • preventing abusive related-party transactions; and • assuring equitable treatment of all shareholders, including minority shareholders. Unless allowed by a company’s Constitutional Docu - ments, the board shall not have the power to issue securities, conclude loans for more than three years, sell the company’s assets or business, mortgage such assets, provide guarantees for third parties, discharge the company’s debtors from their liabilities, reach a settlement in respect thereof or donate the compa - ny’s assets without approval of the general meeting of the shareholders – unless such actions fall within the essence of the company’s objectives. The shareholders participate in the management of the company through general meetings. There are two types of general meetings, each with a defined scope of powers, as detailed in 4.3 Shareholder Meetings . 2.3 Decision-Making Processes The Shareholders The shareholders are required to hold one ordinary general meeting within three months from the end of the fiscal year (six months for companies with limited liability), and an extraordinary general meeting when - ever required. The details of the process of each type of meeting are found in 4.3 Shareholder Meetings . The Board In joint stock companies, the following apply. • A board is required to meet at least four times a year, by invitation from the chairperson of the board or at least two directors; the board issues resolutions for the management of the company. • The quorum for the meeting is half the number of directors (minimum of three), unless a higher amount is required in the Constitutional Docu - ments.
• There shall be no attendance by proxy unless allowed by the Constitutional Documents. Deci - sions are issued by a majority vote of the directors in attendance. In case of a tie, the chairperson shall have the casting vote. • Any director who objects to a decision must minute their objection. If a case is lodged against the board on the basis of a decision with negative out - come, the minutes will serve to absolve the object - ing director of liability. • Meetings of the board may be attended by video or teleconference if the Constitutional Documents allow. • Decisions may be issued by circulation if the Con - stitutional Documents of the company allow for the same. Regarding the third bullet point, only a director or rep - resentative of a corporate shareholder may hold the proxy for a board meeting. A maximum of two direc - tors may attend by proxy, and at least half the direc - tors must attend in person, including the chairperson, for the meeting to be valid (minimum of two in closed companies and three in public companies). Companies with limited liability may be managed by the partners, or by a manager or board of managers appointed by the partners. A board of managers is not required unless the number of partners exceeds ten. The formation of the board of managers and its pow - ers shall be set out in the Constitutional Documents. Closed Joint Stock Companies Closed joint stock companies are managed by a board of directors (minimum of three and maximum of 15 directors, maximum term of three years, and renewable by the general assembly). The boards of closed joint stock companies that are listed in the Bahrain Bourse must include independent and non-executive directors. The Minister of Indus - try and Commerce and CBB may issue decisions to 3. Directors and Officers 3.1 Board Structure Companies With Limited Liability
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