BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali and Saifuddin Mahmood, Hassan Radhi & Associates
Public Joint Stock Public joint stock companies are managed by a board with a minimum of five directors and a maximum of 15 directors, a maximum term of three years, and renewable by the general assembly. The board must include independent and non-executive members. The board of directors of joint stock companies must choose a chairman and vice-chairman from its members by way of secret ballot. The Ministry must be informed of the decision. For CBB licensees, the chairman 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 Bod- ies or Functions Involved in Governance and Management and 6.2 Disclosure of Corporate Governance Arrangements . Companies licensed by the CBB are subject to the independence requirements set out in the applicable Rulebook volume for their type of licence. 4.2 Roles of Board Members The Chairman The chairman is considered the head of the company. The chairman represents the compa - ny before third parties and their signature solely shall bind the company in its relationship with third parties, unless the Constitutional Docu - ments require the chairman to have joint sig - nature authority with one director or more. The chairman must ensure that the decisions of the board are executed.
• Decisions may be issued by circulation if the Constitutional Documents of the company allow for the same. Regarding the third bullet point, only a director or representative of a corporate shareholder may hold the proxy for a board meeting. A maximum of two directors may attend by proxy, and at least half the directors must attend in person, including the chairman, for the meeting to be valid, subject to a minimum of two in closed companies and three in public companies. Companies with limited liability may be man - aged by the partners or 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 powers shall be set out in the Constitutional Documents. Closed Joint Stock Closed joint stock companies are managed by a board of directors with a minimum of three direc - tors and a maximum of 15 directors, a maximum term of three years, and renewable by the gen - eral 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 Industry and Commerce and CBB may issue decisions to include more categories of closed joint stock companies to which this requirement is to apply. 4. Directors and Officers 4.1 Board Structure Companies With Limited Liability
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