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  • HC-1.5 HC-1.5 Independence of Judgment

    • HC-1.5.1

      The Board must ensure that it has sufficient non-executive and independent non-executive directors (in addition to its Chairman), in order to provide sufficient independent scrutiny of management.

      January 2011

    • HC-1.5.2

      In the case of a Bahraini investment firm licensee, which is part of an overseas group, where there is sufficient independent scrutiny of the operations of the firm on a group wide basis, the CBB will consider exempting the licensee from the independence requirements of Paragraph HC-1.5.1.

      January 2011

    • HC-1.5.3

      Every director must bring independent judgment to bear in decision-making. No individual or group of directors must dominate the Board's decision-making and no one individual should have unfettered powers of decision.

      January 2011

    • HC-1.5.4

      Executive directors must provide the Board with all relevant business and financial information within their cognizance, and must recognise that their role as a director is different from their role as an officer.

      January 2011

    • HC-1.5.5

      Non-executive directors should be fully independent of management and should constructively scrutinise and challenge management including the management performance of executive directors.

      January 2011

    • HC-1.5.6

      At least half of an investment firm licensee's Board should be non-executive directors and at least three of those persons should be independent directors. (Note the exception for controlled companies in Paragraph HC-1.6.2 and for possible exemption under Paragraph HC-1.5.2).

      January 2011

    • HC-1.5.7

      The chairman of the Board should be an independent director so that there will be an appropriate balance of power and greater capacity of the Board for independent decision making.

      Amended: January 2012
      January 2011

    • HC-1.5.7A

      The chairman and/or deputy chairman must not be the same person as the CEO.

      Added: January 2012

    • HC-1.5.8

      The Board must review the independence of each director at least annually in light of interests disclosed by them. Each independent director must provide the Board with all necessary and updated information for this purpose.

      Amended: April 2021
      January 2011

    • HC-1.5.9

      To facilitate free and open communication among independent directors, each Board meeting should be preceded or followed with a session at which only independent directors are present, except as may otherwise be determined by the independent directors themselves.

      January 2011

    • HC-1.5.10

      Where an independent director has served three consecutive terms on the board, such director will lose his/her independence status and must not be classified as an independent director if reappointed.

      Added: April 2021

    • HC-1.5.11

      Where a Chief Executive Officer of an investment firm licensee, who is also a Board member, no longer occupies the CEO position, whether due to resignation, retirement or termination, his/her Board Membership must also be immediately terminated.

      Added: April 2021