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Joint Stock Companies and New Companies Laws

Corporate governance

Corporate governance may be defined as rules, structures, processes, and relationships regulating and managing organizations. It is a standard framework in which the concerns of numerous stakeholders associated with the organization are protected. It encompasses all aspects of governance and contributes to creating a structure for its goals. For example, the SCA “Securities and Commodities Authority” was built in 2000 under Federal Regulation Number four of the United Arab Emirates. The Authority’s mission is to oversee and manage joint-stock companies and wealth management. As a result, every firm whose stocks are traded on the UAE Securities Exchange is subject to the SCA’s laws..

Joint Stock Companies and New Companies Laws Amendments

This year, a new amendment was created that clarified the yearly corporate governance framework criteria.. The details under Article 77 of the revised Resolution Number 3-RM 2020 are as follows: 

  • There must be specific identifications of “members of the board,” chief executive, chairman, and vice-chairman. Similarly, comprehensive biography of every member will also be presented along with the experience and qualifications of the members.  
  • Members of committees and the Board of Directors and the Authority and responsibilities handed to them and the actions carried out throughout the year.
  • Members of committees and the Board of Directors and the Authority and responsibilities handed to them and the actions carried out throughout the year.
  • The number of Board and Management Board meetings held and the identities of those that attended. The identities of the key shareholders who control more than 5% of the company’s equity wholly or partly and a quick explanation of the shareholder’s equity transformation.
  • Include the following in the assessment on the management framework and corporate governance:
  • The applicable rules of corporate governance
  • The methodology of the identity of the Board’s competence
  • The breadth of the Board’s complete implementation of internal audit processes.
  • Every Board member and board subcommittee gives remuneration and bonuses during the fiscal year and their reasons.
  • A list of the company directors, first and second grades, as listed in the company’s organizational structure, their operations, dates of initial consultation, detailed information of compensation packages, bonuses earned by each of them independently, or other remuneration obtained from the firm, along with the evaluation for such compensation packages..
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