BENIN Law and Practice Contributed by: Nicolin Assogba, D2A SCPA
A Broader Regulatory Movement These developments form part of a general strength - ening of the regional framework. The transformation, in 2021, of the former Regional Council for Public Savings and Financial Markets ( Conseil Régional de l ’ Épargne Publique et des Marchés Financiers ; CREP - MF) into the AMF-UMOA, and the adoption of a uni - form law to strengthen the protection, transparency and integrity of the regional financial market, reflect a drive to align the market with international standards. The AMF-UMOA now approves the appointment of the statutory auditors of listed companies, enhancing control over the quality of financial information. 2. Corporate Management 2.1 Principal Bodies or Functions A Three-Function Architecture The governance of a commercial company is organ - ised around three essential functions: • a deliberative function, exercised by the members in general meeting; • an administration and supervision function, entrust - ed to the board of directors; and • an executive function, carried out by executive management. To these is added a control body, the statutory auditor, responsible for certifying the accounts. This architec - ture, provided for by the AUSCGIE, varies according to the corporate form. The Public Limited Company The SA may be administered under two models. Under the first, it has a board of directors of 3–12 members, with the chairpersonship and general man - agement either combined in a chairperson-and-man - aging director or separated between a chairperson of the board and a managing director. Under the sec - ond, available to companies with no more than three shareholders, it is run by a general administrator who combines administration and management.
admission conditions. Only a public limited company making a public offering is eligible. Enhanced Governance Requirements Listed companies are subject to more demanding governance obligations than private companies. The AUSCGIE already requires companies making a public offering to have a board of directors, to meet enhanced disclosure obligations and to establish spe - cialised committees of the board (audit, governance and remuneration). To this is added the Corporate Governance Code for BRVM-listed companies, which sets out the expected best practices regarding the functioning of the board, the independence of direc - tors and the information provided to shareholders. Mandatory or Voluntary Status The distinction between mandatory and voluntary rules is essential. The provisions of the AUSCGIE and of the AMF-UMOA regulation are mandatory, with breaches attracting civil and even criminal penalties. The Governance Code, by contrast, operates on a “comply or explain” basis: companies are encouraged to apply it and, failing that, to explain any departures in their periodic disclosures. 1.4 Stock Exchange Requirements Developments The Adoption of a Regional Governance Code The most significant development of recent years is the adoption, in 2022, of the Corporate Govern - ance Code for BRVM-listed companies, the first such framework on the regional market. Built around 11 founding principles, it places shareholders at the forefront of stakeholders and sets out expectations regarding the functioning of the board of directors and its relationship with executive management. Implications for Boards and Shareholders The Code has concrete consequences for the compo - sition and functioning of boards. It promotes the pres - ence of independent directors and a better gender balance, with no single gender to exceed two-thirds of the board. For shareholders, it strengthens advance disclosure and the free exercise of their rights, particu - larly at general meetings.
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