BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali and Saifuddin Mahmood, Hassan Radhi & Associates
• the corporate governance committee is in charge of reviewing the company’s corporate governance policy and making recommenda - tions to ensure compliance – this commit - tee may be merged with the nomination and remuneration committee. 3.2 Decisions Made by Particular Bodies The board of directors of a joint stock compa - ny has the authority, by law, to do 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 resolutions. The CBB Rulebook provides more detailed guid - ance 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, ensuring that financial statements are pre - pared in a manner that accurately reflects the company’s financial position, monitoring man - agement performance, convening and preparing the agenda for shareholder meetings, monitor - ing conflicts of interest and preventing abusive related party transactions and assuring equitable treatment of all shareholders, including minority shareholders. Unless allowed by a company’s Constitutional Documents, the board shall not have the power to issue securities, conclude loans for more than three years, sell the company’s assets or busi - ness, mortgage such assets, provide guarantees for third parties, discharge the company’s debt - ors from their liabilities, reach a settlement in respect thereof or donate the company’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 5.3 Shareholder Meetings . 3.3 Decision-Making Processes The Shareholders The shareholders are required to hold one ordi - nary general meeting within three months from the end of the fiscal year, and an extraordinary general meeting whenever required. The details of the process of each type of meeting are found in 5.3 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 chairman of the board (the “chairman” ) or at least two direc - tors; the board issues resolutions for the management of the company. • The quorum for the meeting is half the num - ber of directors, subject to a minimum of three, unless a higher amount is required in the Constitutional Documents. • There shall be no attendance by proxy unless allowed by the Constitutional Documents. Decisions are issued by a majority vote of the directors in attendance. In case of a tie, the chairman 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 outcome, the minutes will serve to absolve the objecting director of liability. • Meetings of the board may be attended by video or teleconference if the Constitutional Documents allow.
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