01
Law, statute and regulatory layer
Commercial Companies Law regulates company forms, capital, bodies, meetings, audit, conversion and liquidation. The Corporate Governance Code is mandatory for joint-stock companies registered in Bahrain, except for CBB licensees: for them governance is determined by the corresponding CBB Rulebook.
The Company may explain deviations from the guideline Code, but not from mandatory Commercial Companies Law or other legislation.
02
Governance depends on legal form
- W.L.L.
- Participants, manager(s), memorandum and reserved matters
- B.S.C. closed
- Board at least 3 members; joint-stock governance
- B.S.C. public
- Board at least 5 members; public disclosure
- Branch
- Head-office authority, branch manager and POA
- Holding
- Subsidiary inspection, financing and group approvals
- CBB licensee
- Separate fit-and-proper and governance perimeter
03
Board composition for joint-stock company
Code provides for no more than 15 directors; minimum - five for public and three for closed joint-stock company. As a rule, at least half should be non-executive, at least three should be independent, and in any case at least one independent director is needed. The Chairman must be independent and not combine the role of CEO.
- Skills
- Finance, sector, legal, risk and technology
- Independence
- Annual verification of circumstances and declaration
- Chair / CEO
- Separation of management and execution
- Secretary
- Agenda, minutes, records and corporate calendar
- Committees
- Audit, nomination/remuneration and governance by Code
04
Board manages the system, not the operations
The Council approves the strategy, budget, capital structure, financial statements, risk appetite, internal control, major expenditures and related-party framework; controls management and ensures equal treatment of shareholders.
Goals, budget, investments and performance.
Risk appetite, controls and compliance.
CEO, succession and remuneration.
Accounts, audit and disclosure.
06
The solution must be provable
- Authority
- Which body has the right to resolve the issue?
- Notice
- Deadline, recipients, agenda and materials
- Quorum
- Charter, law and conflict exclusions
- Vote
- Required majority and dissent
- Minutes
- Discussion, decision, signatures and applications
- Implementation
- Sijilat, bank, contract and accounting entries
07
Related parties and conflict of interest
Transactions with related parties undergo review by a governance officer and audit committee before execution, and then board approval in cases provided for by the Code. The concerned director or executive discloses the conflict and should not turn the corporate opportunity into personal gain.
08
Three lines of control
Owner of the process and daily controls.
Framework, monitoring and challenge.
Independent verification of design and effectiveness.
Opinion on financial statements and statutory duties.
09
Annual governance cycle
A joint-stock company appoints a governance officer, approves a written manual, includes an independent governance report in the annual report and a separate issue in the agenda general assembly. The Code specifies the submission of a governance report to the MOIC within six months after the financial year-end and storage of records for at least ten years.
10
Board readiness
- 01
Check law, memorandum, Sijilat and license conditions.
- 02
Update board charter, committees and authority matrix.
- 03
Get independence and conflict declarations.
- 04
Check related-party register and approvals.
- 05
Agree on the annual report, AGM and regulatory filings.