«Securities»: Experience and time are prerequisites for members of the boards of directors of a public joint-stock company

At least one third of the members of the Board of Directors must be independent, non-executive.

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The Securities and Commodities Authority stated that members of the boards of directors of public joint stock companies must have practical experience, and have sufficient time and interest for their membership.

This came in an amendment made by the Authority to the Corporate Governance Manual, issued by a decision of the Chairman of the Authority's Board of Directors, Muhammad Ali Al-Sharfa Al-Hammadi.

In its decision, the Authority indicated that Paragraph 5 of Article 9 of the Public Shareholding Companies Governance Guide has been amended, to become as follows: “The statute determines the executive and non-executive members and the independent members, provided that at least one-third of the members of the board of directors are independent non-executives, Who should have practical experience and technical skills, in the interest of the company.

In all cases, when selecting non-executive members of the company, it must be taken into account that the member is able to allocate sufficient time and attention to his membership, and that membership does not represent a conflict with other interests of him.

Paragraph 4 of Article 40 of the same guide was also amended, to read: The General Assembly may appoint one or more representatives, on behalf of the shareholders, to be nominated by the company’s board of directors, according to the company’s need, to attend the meetings of the General Assembly, vote on its decisions on behalf of the shareholders, and determine their fees. This is from the law firms registered in the roll of lawyers working in the state or financial analysts accredited by the authority, in accordance with the following provisions:

■ The company shall include on the agenda attached to the announcement of the invitation to the shareholders the names and contact information of the representatives of the shareholders who may represent the shareholders in attending the meetings of the general assembly and voting on its decisions.

■ The company bears the fees for the representatives of the appointed shareholders.

The shareholder authorizes the appointed representative by filling out the proxy form attached to the announcement of the invitation addressed to the shareholders, and sending it to the company at least five days before the date set for holding the general assembly, provided that the proxy form clearly and explicitly includes the shareholder’s instructions to vote on the items listed in the assembly’s agenda public, provided that the following is taken into account:

■ The appointed representative may not vote on the items on the agenda of the general assembly for which the shareholder has not issued voting instructions.

■ Shares in respect of which power of attorney were issued are counted within the quorum for the meetings of the general assembly.

■ Shares for which the shareholder has not issued voting instructions are not counted within the quorum for the issuance of the resolution.

■ The appointed representative must manage and disclose a conflict of interest between his duties as an appointed representative and his relationship with the company.

The appointed representative must also attend the meeting in person.

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