HC-8.1 HC-8.1 The Board
HC-8.1.1
Licensees should be headed by an effective, collegial and informed Board of Directors ('the Board').October 2019Role and Responsibilities
HC-8.1.2
All members of the board of directors should understand the Board's role and responsibilities under the Bahrain Commercial Companies Law (2001) and its amendments and any other laws or regulations that may govern their responsibilities from time to time. In particular:
(a) The Board's role as distinct from the role of the shareholders (who elect the Board and whose interests the Board serves) and the role of officers (whom the Board appoints and oversees); and(b) The Board's fiduciary duties of care and loyalty to thelicensee and the shareholders (see HC-8.2).October 2019HC-8.1.3
The Board's role and responsibilities include but are not limited to:
(a) The overall business performance and strategy for thelicensee ;(b) Causing financial statements to be prepared which accurately disclose thelicensee's financial position;(c) Monitoring management performance;(d) Approving the agenda for shareholders' meetings;(e) Monitoring conflicts of interest and preventing abusive related party transactions; and(e) Assuring equitable treatment of shareholders including minority shareholders.October 2019HC-8.1.4
The members of the board of directors are responsible both individually and collectively for performing the responsibilities outlined in Paragraph HC-8.1.3. Although the Board may delegate certain functions to committees or management, it may not delegate its ultimate responsibility to ensure that an adequate, effective, comprehensive and transparent corporate governance framework is in place.
October 2019HC-8.1.5
When a member of the board of directors is inducted, the chairman of the Board, assisted by company legal counsel or compliance officer, should review the Board's role and duties with that person, particularly covering legal and regulatory requirements and Module HC.
October 2019HC-8.1.6
The
licensee should have a written appointment agreement with each director which recites the directors' powers and duties and other matters relating to his appointment including his term, the time commitment envisaged, the committee assignment if any, hisremuneration and expense reimbursement entitlement, and his access to independent professional advice when that is needed.October 2019HC-8.1.7
The Board should adopt a formal Board charter or other statement specifying matters which are reserved to it, which should include but need not be limited to the specific requirements and responsibilities of board directors.
October 2019Composition
HC-8.1.8
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.October 2019HC-8.1.9
Potential
non-executive directors should be made aware of their duties before their nomination, particularly as to the time commitment required. The Board should regularly review the time commitment required from eachnon-executive director and should require eachnon-executive_director to inform the Board before he accepts any Board appointments to another company. 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.October 2019Decision Making Process
HC-8.1.10
The Board should be collegial and deliberative, to gain the benefit of each individual director's judgment and experience.
October 2019HC-8.1.11
The chairman should take an active lead in promoting mutual trust, open discussion, constructive dissent and support for decisions after they have been made.
October 2019HC-8.1.12
The Board should meet frequently but in no event less than four times a year. All directors should attend the meetings whenever possible and the directors should maintain informal communication between meetings.
October 2019HC-8.1.13
The chairman should 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. All directors should receive the same Board information. At the same time, directors have a legal duty to inform themselves and they should ensure that they receive adequate and timely information and should study it carefully.
October 2019Directors' Communication with Management
HC-8.1.14
The Board should encourage participation by management regarding matters the Board is considering, and also by management members who by reason of responsibilities or succession, the CEO believes should have exposure to the directors.
October 2019HC-8.1.15
Non-executive directors should have free access to thelicensee's management beyond that provided in Board meetings. Such access should be through the Chairman of the Audit Committee or CEO. The Board should make this policy known to management to alleviate any management concerns about a director's authority in this regard.October 2019
