BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali and Saifuddin Mahmood, Hassan Radhi & Associates
• hold 10% or more of the shares of the company, the parent company, or any of its subsidiaries or associates; • represent a legal person who holds 10% or more of the shares of the company, parent or any of its subsidiaries or associates; • served in an executive position in the com - pany, its parent or any of its subsidiaries or associates, in the two years preceding their nomination; • are a first-degree relative of an existing direc - tor or any person in a key executive manage - ment position in the company, its parent, or any of its subsidiaries or associates; • are a director of the company’s parent or any of its subsidiaries or associates; • were employed by any of the company’s contracting parties such as external auditors, major suppliers, etc, in the two years preced - ing their nomination; • were employed by the parent company or any of its subsidiaries or associates in the two years preceding their nomination; • have made or received payment from the company in the value of over BHD50,000 (around USD132,625), apart from directors’ remuneration if they are an existing director in the past year; • are a relative of a partner in the company’s external auditor or an employee thereof, or has been in the past two years; or • are an employee or partner at a company that provides consulting services to the com - pany, its parent, or any of its subsidiaries and associates (this does not apply if the parent company is owned at least 75% by the gov - ernment or is a government entity). Executive directors are those who hold senior management positions within the company. Executive directors are not considered inde - pendent.
Non-executive directors are those who are not involved in the day-to-day management of the company or a controller of a company, subsidi - ary or affiliate thereof. 4.6 Legal Duties of Directors/Officers The legal duties of directors of a company may be summarised as follows: • to participate in the management of the com - pany in a diligent, skilful and efficient manner in accordance with the law and the Constitu - tional Documents; • to serve the company as a representative of the interests of all the shareholders, and not one or a specific group of shareholders; and • to disclose any personal interest they may have in any of the issues discussed in board or general meetings and to refrain from voting in respect of any of these issues. 4.7 Responsibility/Accountability of Directors Once a director is on the board, they owe a duty towards all the shareholders, and the interests of all the shareholders must be considered. However, any stakeholder affected by any deci - sion of the board or a director has the right to lodge a claim at court in accordance with Article 185 and 18 bis of the CCL (detailed in 5.4 Share- holder Claims ). 4.8 Consequences and Enforcement of Breach of Directors’ Duties The consequence of a breach of directors’ duties includes dismissal from office, and pos - sibly a claim at court in accordance with Article 18 bis of the CCL (as detailed in 5.4 Shareholder Claims ).
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