10 Latest Developments in Corporate Governance Code in Bahrain
Khalid Khan
February 14
The Code is applicable to all joint stock companies incorporated in Bahrain and registered with Commercial Companies Law.

To establish best-practice corporate governance principles in Bahrain, and to provide protection for investors and other company stakeholders through compliance, monitoring performance and ensuring fair disclosure. It lays down guidelines to increase compliance and achieve good governance by providing minimum standards to establish best-practice corporate governance principles in Bahrain.

This Code supplements the Company Law goes beyond the Company Law's requirements on several points:

Voting by all shareholders in general meetings through Electronic Voting System.

Increasing female representation and gender statistics declaration in the Company's annual corporate governance report.

Complete record keeping for minimum 10 years.

Inclusion of shareholders' rights to inspect the Company's books, records, and documents.

Every company in every event should be expected either to comply with this Code or explain its noncompliance through a comply or explain report.

Disclosure of conflicting interests between directors and officers and their prohibition on attending, voting, and participating in such meetings.

Invalidation of decision or payment of compensation on any such non-disclosure of conflicting interests.

Appointment of external auditors and mandatory recording of compliance of governance principles in the report by both private and public joint stock companies.

Changes in audit committee composition with strict rules for Public Joint Stock companies.

Disclosures by Board about other work undertaken directly or indirectly in competition with the company during election of the Board members and its publication in company's annual report.

Disclosure in company's annual corporate governance report of the total remuneration, fees and all privileges paid to the Chairman and Board members each year and the total earnings of the executive management of the Company.

The Annual Report to shareholders must detail the totals received by the six highest remunerated executives of the Company expressly including the Chief Executive Officer and Chief Financial Officers.

Introducing penalties for violations like:
  1. Suspending the commercial registration of the company for a period not exceeding six months.
  2. Imposing an administrative fine not exceeding BD 1,000 per for the first time violation and BD 2,000 per day for subsequent violation within three years following the date on which a decision in respect of the previous violation against it had been issued. In all cases, the sum of the fine shall not exceed fifty thousand Bahraini Dinars.
  3. Imposing administrative fine not exceeding one hundred thousand Bahraini Dinars.
  4. Striking off the commercial registration of the company from the Commercial Register.