BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali, Saifuddin Mahmood and Hasan Sanad, Hassan Radhi & Associates
include more categories of closed joint stock compa - nies to which this requirement is to apply. Public Joint Stock Companies Public joint stock companies are also managed by a board of directors (minimum of five and maximum of 15 directors, maximum term of three years, renewa - ble by the general assembly). The board must include independent and non-executive members. The board of directors of joint stock companies must choose a chairperson and vice-chairperson from among its members by way of secret ballot. The Min - istry must be informed of the decision. For CBB licen - sees, the chairperson is required to be an independent member and must be approved by the CBB for that position. The board of directors of public companies and some closed companies must form committees from amongst its members, as set out in 3.1 Bodies or Functions Involved in Governance and Manage- ment and 6.2 Disclosure of Corporate Governance Arrangements . Companies licensed by the CBB are subject to the independence requirements set out in the Rulebook volume applicable to their type of licence. 3.2 Board Members Chairperson The chairperson is considered the head of the com - pany. The chairperson represents the company before third parties, and their signature alone shall bind the company in its relationship with third parties, unless the Constitutional Documents require the chairperson to have joint signature authority with one director or more. The chairperson must ensure that the decisions of the board are executed. Vice-Chairperson The vice-chairperson shall take the role of the chair - person in their absence. Directors Jointly, the directors must fulfil the role of the board in the management of the company. Severally, each director must ensure that they work in the best interest
of the company and make the decisions and actions required to serve that interest. In addition to the committees within the board, the roles are set out in 3.1 Bodies or Functions Involved in Governance and Management . 3.3 Board Composition The composition of the board of directors is as set out in 4.1 Board Structure . The board of joint stock com - panies must include independent and non-executive directors, and may also include non-independent and executive directors, as detailed in 3.5 Rules/Require- ments Concerning Independence of Directors . In the case of CBB licensees, half of the board of directors, including the chairperson, are required to be inde - pendent. 3.4 Appointment and Removal of Directors/ Officers Directors are nominated by appointment or election by the general meeting of the shareholders. The gen - eral meeting of the shareholders is the authority with director removal powers. Pursuant to the CCL, any shareholder owning at least 10% of the capital of the company has the right to appoint a director, depending on the size of the board and the directorship and approval requirements in case of CBB licensees. Shareholders not eligible to appoint, or who do not choose to appoint, a director may use their percent - age to elect directors by cumulative voting. There are generally no restrictions on appointment but general guidelines are set out in the CCL, as follows: • having legal capacity to act; • not having been convicted of a crime involving negligent or fraudulent bankruptcy, or a crime related to honour, breach of trust or violation of the provisions of the CCL, unless reinstated; • not being prohibited from being a director in a joint stock company pursuant to the CCL or any other law in force in Bahrain;
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