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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