BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali and Saifuddin Mahmood, Hassan Radhi & Associates
The Vice-Chairman The vice-chairman shall take the role of the chairman in their absence. The Directors Jointly, the directors must fulfil the role of the board in the management of the company. Sev - erally, 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 . 4.3 Board Composition Requirements/ Recommendations The composition of the board of directors is as set out in 4.1 Board Structure . The board of joint stock companies must include independent and non-executive directors, and may also include non-independent and execu - tive directors as detailed in 4.5 Rules/Require- ments Concerning Independence of Directors . In the case of CBB licensees, half of the board of directors, including the chairman, are required to be independent. 4.4 Appointment and Removal of Directors/Officers Directors are nominated by appointment or elec - tion by the general meeting of the shareholders. The general 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, subject to the size of the board and the requirements of director -
ship and approval requirements in case of CBB licensees. Shareholders not eligible to appoint or those who do not choose to appoint a director may use their percentage to elect directors by cumu - lative voting. There are generally no restrictions to appoint - ment but general guidelines set out in the CCL are as follows: • having legal capacity to act; • not having been convicted of a crime involv - ing 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; • the restriction on the Chairman and Deputy Chairman holding the same position as the most senior executive in the company; • special independence conditions for directors of CBB-licensed companies; and • these are in addition to any restrictions stipulated in the memorandum and articles of association of the company. 4.5 Rules/Requirements Concerning Independence of Directors Independent directors are those that are deemed by the board to be independent of any specific shareholder and who do not have any significant business interest with the company. Non-independent directors are those who repre - sent a shareholder or those who have a business interest with the company. A director is consid - ered non-independent if they:
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