At the beginning of this year, the Securities Commodities Authority of UAE has issued a new Resolution number 03 of 2020 which relates to the Corporate Governance Guidelines for public listed companies or Public Joint-Stock Companies. The concerned resolution will invalidate the existing resolution number 7 of 2016 regarding standards of Institutional Discipline for Listed Companies. The Corporate Lawyers of Dubai has witnessed significant changes in the new Resolution and therefore feels the need for informing the readers about the same.
First and foremost, the Resolution is applicable only to Public Joint Stock companies registered with the country and is not applicable on international companies even though they are listed in UAE stock market. In reference to the significant amendments in the new Resolution, the SCA has carefully scrutinized the changing economic environment and has issued following changes in the Resolution:
- The company is now obliged to appoint a secretary on the board of directors;
- A prerequisite that most of board individuals should be autonomous, non-official individuals;
- Minimum 20% of the board shall be occupied by females and the company is obliged to disclose this information in the yearly governance report, along with a necessity for the board to build up strategies concerning variety of gender in the board;
- The presentation of an intricate wellness criteria for board individuals;
- The presentation of a discretionary reception of a double administration structure whereby two board advisory groups are shaped: an official panel and an administrative council;
- Carrying greater lucidity and detail to the risk-management techniques;
- Carrying greater information to administration related revelations including the substance of the yearly corporate administration report and the necessity to present the report for endorsement at the yearly comprehensive gathering;
- It is the duty of the board members to inform the company, whenever required of any amendment in the interest of the company and the secretary so appointed shall review such changes to verify its accuracy;
- The acquaintance of rules with control the administration of auxiliary organizations, requiring the parent organization’s directorate to set out and support the gathering’s corporate administration structure and guarantee that the administration of the auxiliary organization receives a fitting corporate administration system; and
- The presentation of reconsidered arrangements requiring the organization to have set up corporate social duty approaches and projects.
The Resolution further informs that the adoption of the aforementioned principles is an obligation on all Public Joint-Stock Companies. The Resolution sets out the punishments for violators, which incorporate warning, fines, and, sometimes, referral of the infringement to the open investigator. Infringement of the Resolution will be dependent upon the arrangements of the SCA’s Board of Directors Resolution No. (42) of 2015 concerning the controls and systems for compromise in violations identified with Public Joint-Stock Companies. Every single recorded organization are required to survey and correct their articles of affiliation, inner approaches and strategies to consent to the Resolution. The Resolution gives an elegance time of until the finish of 2020 for organizations to agree to the new necessities.
Copyright © of this article is retained by the author and/or other copyright owners. We explicitly grant you permission to download a copy, without any alteration, of this article for personal non-commercial research or study, without prior permission or any charge. This article can be utilized on your website or for marketing, however, we grant you permission to host this article on your website and no other rights. This content should not be altered in any way or sold commercially in any format without prior permission of the copyright holder. During reference of this article, full biographic details entailing the name of the author, his designation, the institute and the publishing date of the article shall be provided.
