The Securities and Commodities Authority has reported that there are three main cases through which a member of the board of directors of public joint-stock companies is removed, or stripped of his position, which is the general assembly, or a judicial ruling is issued proving that the chairman or any of the company’s board members, or any of its executive management By concluding deals or transactions involving a conflict of interest, or in the event of a court ruling of imprisonment or a fine, or any of them due to a complaint from a shareholder against the Chairman of the Board of Directors, or any of the members of the Board of Directors or the Executive Committee, including removal from membership or stripping him of His job.
The General Assembly
In the recent Governance Manual issued by the Authority, the Commission clarified that the General Assembly may remove the Chairman of the Board of Directors, or any member of the Board or all members of the Board of Directors, in which case the General Assembly must authorize whom it deems appropriate to chair the General Assembly meeting, and take measures to open the door for candidacy. And calling the general assembly to elect new members to the board of directors, instead of those who were removed, at a time when it is not permissible to re-nominate the person who was removed to the board membership, three years before the date of the issuance of the dismissal decision.
Conflict of interest
She added that the second case that requires dismissal is the case of a judicial ruling proving that the chairman or any member of the company’s board of directors, or any of its executive management, has concluded deals or transactions involving a conflict of interests that are removed from his position, and his candidacy for the chairmanship or membership of the board of directors is not accepted. Or, he performs any duties in the executive management of any joint stock company, except after at least three years have passed from the date of his dismissal.
She drew "securities" to the application of Article (145) of the Companies Law, regarding occupying the new position of membership of the Board of Directors, and in the event of removal of all members of the Board of Directors, the Authority or whoever he delegates to manage the company took over until the first general assembly is held.
Contributor complaint
She explained that in the event of a court ruling of imprisonment or a fine or any of them, due to a complaint from a shareholder against the Chairman of the Board of Directors, or any of the members of the Board of Directors or the Executive Committee including removal from membership, or stripping him of his position, he may not continue to His job, or to re-nominate himself for membership in the board of directors of this company, or any other company until at least three years have passed from the date of the judicial ruling.
Vacancy is vacant
The guide dealt with the vacancy of the position of a member of the Board of Directors through four methods, stating that, subject to the provisions of Article (143) of the Companies Law, if the position of a member of the Board becomes vacant, the Board may appoint a member to the vacant position, provided that this appointment is presented to the Association The General Assembly at its first meeting to confirm his appointment or the appointment of others, unless the company's articles of association stipulate otherwise and the new member completes the term of his predecessor. The guide pointed out that if the vacant positions reach a quarter of the number of council members, the remaining council members must invite the general assembly to convene within (30) days at most from the date of the last vacancy center to elect those who fill these centers.
In the event that a member of the board of directors represents the government or any legal person in the membership of the board of directors according to a letter issued by his representative, then this authority may change who represents it in the membership of the board of directors, according to an official letter addressed to the company in this regard, and the new member completes the term of his predecessor.
Vacancy Board member
The position of a member of the Board of Directors shall be vacant in one of the following cases:
■ If he dies or is injured by a symptom of eligibility, or otherwise becomes unable to carry out his duties as a member of
Board of Directors.
■ If he is convicted of any crime against honor and honesty.
If he declares bankruptcy or stops paying his commercial debts, even if this is not accompanied by declaring bankruptcy.
If he resigned from his position under written notice, he will send the company to this effect.
If a decision is issued by the General Assembly to dismiss him.
If a member of the Board of Directors is absent from attending the Board meetings for three consecutive or five sessions
Intermittent, during the term of the Board of Directors without an excuse acceptable to the Board.
If his membership violates the provisions of the Companies Law.
- If the vacant positions reach a quarter of the number of members of the Council, the General Assembly must be convened.
A judicial ruling of imprisonment or a fine preventing the re-nomination for membership to the Council for at least 3 years.