• HC-1.3 HC-1.3 Decision Making Process

    • HC-1.3.1

      The board must be collegial and deliberative, to gain the benefit of each individual director's judgment and experience.

      January 2014

    • HC-1.3.2

      The chairman must take an active lead in promoting mutual trust, open discussion, constructive dissent and support for decisions after they have been made.

      January 2014

    • HC-1.3.3

      The board must meet frequently to enable it to discharge its responsibilities effectively but in no event less than four times a year. All directors must attend the meetings whenever possible and the directors must maintain informal communication between meetings.

      January 2014

    • HC-1.3.4

      Individual board members must attend at least 75% of all board meetings in a given financial year to enable the board to discharge its responsibilities effectively (see table below). Voting and attendance proxies for board meetings are prohibited at all times.

      Meetings per year 75% Attendance requirement
      4 3
      5 4
      6 5
      7 5
      8 6
      9 7
      10 8
      January 2014

    • HC-1.3.5

      The absence of board members at board and committee meetings must be noted in the meeting minutes. In addition, board attendance percentage must be reported during any general assembly meeting when board members stand for re-election (e.g. board member XYZ attended 95% of scheduled meetings this year).

      January 2014

    • HC-1.3.6

      In the event that a board member has not attended at least 75% of board meetings in any given financial year, the licensee must immediately notify the CBB indicating which member has failed to satisfy this requirement, his level of attendance and any mitigating circumstances affecting his non-attendance. The CBB shall then consider the matter and determine whether disciplinary action, including disqualification of that board member pursuant to Article 65 of the CBB Law, is appropriate. Unless there are exceptional circumstances, it is likely that the CBB will take disciplinary action.

      January 2014

    • HC-1.3.7

      To meet its obligations under Rule HC-1.3.3 above, the full board should meet once every quarter to address the board's responsibilities for management oversight and performance monitoring. Furthermore, board rules should require members to step down if they are not actively participating in board meetings. Board members are reminded that non attendance at board meetings does not absolve them of their responsibilities as directors. It is important that each individual director should allocate adequate time and effort to discharge his responsibilities. All directors are expected to contribute actively to the work of the board in order to discharge their responsibilities and should make every effort to attend board meetings where major issues are to be discussed. Licensees are encouraged to amend their articles of association to provide for telephonic and videoconference meetings. Participation in board meetings by means of video or telephone conferencing is regarded as attendance and may be recorded as such.

      January 2014

    • HC-1.3.7A

      At least half the Board meetings of Bahraini licensees in any twelve-month period must be held in the Kingdom of Bahrain.

      January 2014

    • HC-1.3.8

      All licensees are required to submit, on an annual basis, as an attachment to the year-end quarterly PIR, a report recording the meetings during the year by their board of directors. For a sample report, refer to Appendix BR-5.

      Amended: October 2014
      January 2014

    • HC-1.3.9

      The chairman is responsible for the leadership of the board, and for the efficient functioning of the board. The chairman must ensure that all directors receive an agenda, minutes of prior meetings, and adequate background information in writing before each board meeting and when necessary between meetings. Therefore it is vital that the chairman commit sufficient time to perform his role effectively. All directors must receive the same board information. At the same time, directors have a legal duty to inform themselves and they must ensure that they receive adequate and timely information and must study it carefully (See also Chapter HC-7 for other duties of the chairman).

      January 2014

    • HC-1.3.10

      The board should have no more than 15 members, and should regularly review its size and composition to ensure that it is small enough for efficient decision making yet large enough to have members who can contribute from different specialties and viewpoints. The board should recommend changes in board size to the shareholders when a needed change requires amendment of the licensee's Memorandum of Association.

      January 2014

    • HC-1.3.11

      Potential non-executive directors should be made aware of their duties before their nomination, particularly as to the time commitment required. Where there is a nominating committee, it should regularly review the time commitment required from each non-executive director and should require each non-executive director to inform the committee before he accepts any board appointments to another licensee.

      January 2014

    • HC-1.3.12

      One person should not hold more than three directorships in public companies in Bahrain with the provision that no conflict of interest may exist, and the board should not propose the election or reelection of any director who does.

      January 2014