Corporate Governance
Corporate Governance In UAE
Corporate governance describes the entire process of how a company operates under direction and control. The system of corporate governance consists of established rules and processes that direct business operations for decision-making and operational success. The UAE requires strong corporate governance systems because they ensure transparency, legal compliance and maintain accountability. Good governance establishes trust among investors while supporting long-term business growth. It also protects shareholder rights and other stakeholder interests.
At HHS Lawyers, we provide UAE businesses with assistance to establish and maintain efficient corporate governance systems. Our legal experts guarantee that your governance practices fulfill all requirements of the UAE Commercial Companies Law together with Securities and Commodities Authority (SCA) regulations and other relevant laws and guidelines. Our UAE corporate governance lawyers provide assistance to both new and established businesses to maintain market compliance while reducing legal risks and building a strong market reputation.
Legal Framework for Corporate Governance in the UAE
The UAE corporate governance system relies on multiple essential laws that direct companies to maintain optimal management practices together with transparency and accountability standards.
The following list includes essential regulations that control corporate governance in the UAE:
- Federal Decree-Law No. 32 of 2021 on Commercial Companies: The law established the base for corporate governance standards that apply to most businesses operating in the UAE.
- Chairman of Authority’s Board Resolution No. 3/R.M of 2020: The public joint-stock company governance requirements receive their detailed framework through this resolution.
- Ministerial Resolutions No. 228 of 2015 and No. 539 of 2017: The governance structures for private joint-stock companies receive their regulatory framework through these ministerial resolutions.
- Central Bank Circular No. 83/2019: The circular establishes corporate governance standards that apply to banks together with financial institutions.
- Securities and Commodities Authority (SCA) Guidelines: The guidelines establish transparency standards that simultaneously protect investor rights and shareholder interests.
DIFC and ADGM Corporate Governance Regulations: The regulations apply to all businesses that operate within the Dubai International Financial Centre and Abu Dhabi Global Market free zones.
Why Corporate Governance Matters in the UAE
The governance of companies providing services in the UAE is not just a legal requirement but rather a great business strategy. Companies having better governance enjoy such advantages as:
- Operationally efficient and better performing
- Increased trust of investors, regulators, and business partners
- Decreased risk of legal issues and better compliance with the laws of the UAE
- Stronger financial controls and management systems
- Long-term growth and corporate reputation.
It is mandatory for companies listed on any of the UAE stock exchanges, such as the Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX), to adhere to the corporate governance rules of the Securities and Commodities Authority (SCA).
At HHS Lawyers, we assist companies, whether public, private, or family-owned, in establishing and maintaining governance systems that comply with legal requirements and promote sustainable growth.
Our Corporate Governance Legal Services
Our corporate governance legal services support clients from local businesses to multinational corporations and family-owned entities and publicly listed entities that operate in the United Arab Emirates (UAE). Our services include:
Corporate Governance Framework Development
Our team assists organizations in building customized governance systems that match their operational structure, size and their business sector while adhering to UAE Commercial Companies Law requirements and regulatory standards.
Board Structuring and Advisory
Our legal experts provide advisory on board composition, roles, independence, and responsibilities. Our team provides support for creating board charters and governance manuals as well as committees’ terms of reference.
Policy and Procedure Drafting
We establish fundamental corporate governance policies, which include
- Code of Conduct and Ethics
- Anti-Bribery Policy
- Conflict of Interest Policy
- Risk Management and Internal Controls Policy
- Related Party Transactions Policy
Shareholder and Stakeholder Rights
Our company provides complete systems to safeguard shareholder rights while facilitating their involvement in vital business choices and fulfilling UAE disclosure requirements.
Regulatory Compliance and Reporting
Our team assists companies to fulfill SCA regulations and free zone authority requirements and prepares governance reports and disclosures for regulatory bodies.
Board and Management Training
Our experts also provide information relating to the importance of corporate governance to board members and senior management teams and compliance officers about their legal duties along with ethical responsibilities.
ESG and Sustainability Advisory
Your governance strategy will benefit from our ESG and sustainability advisory services to fulfill both international requirements and UAE sustainability objectives.
Legal Audit and Governance Health Check
Our governance audits reveal non-compliant areas and then present actionable steps to improve both regulatory adherence and transparency alongside risk management practices.
Corporate Governance in Different UAE Jurisdictions
Businesses operating in the UAE need to understand that corporate governance rules vary based on their location of registration. At HHS Lawyers, we provide you with the correct regulatory guidance for all your business operations throughout mainland UAE, free zones and DIFC or ADGM financial centers.
Mainland UAE (Onshore)
All companies operating in the mainland UAE must comply with Federal Decree-Law No. 32 of 2021.
Key points include:
- The Securities and Commodities Authority (SCA) rules apply to all public companies.
- Private companies follow Ministerial Resolution No. 228 of 2015 and Ministerial Resolution No. 539 of 2017.
- The Cabinet Decision No. 77 of 2022 defines board roles and reporting obligations for LLCs in mainland UAE.
Dubai International Financial Centre (DIFC)
The DIFC Law No. 5 of 2018, as amended, applies to all DIFC companies. This system is based on English common law and focuses on
- Independent boards
- Risk management
- Clear reporting and transparency
Abu Dhabi Global Market (ADGM)
The ADGM Companies Regulations 2020 serve as the foundation of the English common law system used by this jurisdiction. It requires
- Strong board oversight
- Audit and risk committees
- ESG (Environmental, Social, Governance) reporting
Free Zones (e.g., JAFZA, DMCC, DAFZA)
Each free zone has its own rules. Companies operating in the UAE Free Zones need to implement board governance structures and internal controls while following free zone authority guidelines.
Why Choose HHS Lawyers for Corporate Governance in the UAE?
HHS Lawyers operates as a leading UAE corporate law firm that offers complete corporate governance advisory and implementation solutions. Our services include:
- Corporate Governance Policy Drafting: We create governance policies that suit your organization’s structure and industry needs.
- Board Advisory Services: The firm delivers legal guidance regarding board member selections as well as director obligations and governance standards.
- Shareholder and Stakeholder Agreements: The legal firm drafts and reviews agreements that safeguard the interests of all parties involved.
- Regulatory Compliance: Our team ensures your company meets requirements from the UAE Commercial Companies Law as well as SCA rules and Central Bank directives and free zone authority standards.
- Risk Management and Internal Audit Support: Internal audit systems and risk registers undergo our design and review to create effective control systems.
- Governance for Family-Owned Businesses and SMEs: We provide family-run businesses with guidance about succession planning, transparency and dispute resolution strategies.
Speak to Our Corporate Governance Compliance Lawyers Today
Whether starting a new enterprise or revisiting the governance model of an existing one, HHS Compliance Lawyers can provide the necessary guidance. Our highly skilled corporate governance lawyers in the UAE offer clear legal advice and practical solutions according to individual business requirements.
Contact us for a consultation to ensure your company is compliant with the UAE corporate governance law and attains its expected growth.
Frequently Asked Questions (FAQs) About Corporate Governance
Q1. What are the three types of corporate governance?
The three types are:
- Public companies focus on board accountability to shareholders.
- Private companies focusing on owner management.
- Non-profits or NGOs, emphasizing trustee accountability to donors and beneficiaries.
Q2. Who is responsible for corporate governance in a company?
The board of directors is primarily responsible for corporate governance. Senior management, shareholders, and other stakeholders also play a role.
Q3. What are the 4 pillars of corporate governance?
- Accountability
- Transparency
- Fairness
- Responsibility
Q4. What are the 7 rules of governance?
7 Principles are:
- Honesty
- Integrity
- Objectivity
- Accountability
- Selflessness
- Openness
- Leadership
Q5. What is CSR in corporate governance?
Corporate Social Responsibility (CSR) in corporate governance refers to a company’s commitment to operate ethically and contribute to sustainable economic development while improving the quality of life for its workforce, their families, the local community, and society at large.
It encourages business leaders to consider the social, environmental, and ethical impact of their decisions and take steps to minimize harm, promote positive change, and uphold stakeholder trust.
Key areas of CSR include:
- Environmental sustainability
- Ethical labor practices
- Community engagement
- Human rights
- Corporate philanthropy
Q6.What are common corporate governance issues?
- Conflict of interest
- Lack of board independence
- Poor disclosure and transparency
- Inadequate risk management
- Executive compensation misalignment
