A basic principle of corporate governance relates to the Board of Directors of the company, wherein the company shall be headed by an effective, collegial and informative Board. Herein, you need to ask yourself, where do we stand? To achieve the goal, members of the Board should understand their role and responsibilities as stipulated in the “Company Law” and M o A, the corporate culture and the governance code. This highlights that the role of the Board is different from the role of shareholders (whose interests the Board serves) and, the role of executives \ officers in the company. In particular, the Board should fully understand their fiduciary duties of care and degree of loyalty to the company and shareholders. Members of the Board are responsible both individually and collectively for performing the responsibilities, which cannot be transferred or delegated to other persons or bodies of the company.
The Chairman assisted by the legal advisor, should review the Boards role and duties with all members of the Board, particularly covering the legal and regulatory requirements and the Code of Corporate Governance. The company should have a written appointment letter \ agreement with each member of the Board including powers and duties in addition to other matters of his appointment including his term, time commitment envisaged, committee assignment if any, remuneration and expense reimbursement, and access to independent professional advice when needed.
The Board should consider adopting a formal Board “Charter” specifying matters which are reserved to it, which include but not be limited to the specific items stated in the Company Law. An alternative is a formal statement or by-law stating the functions and authority delegated to the officers as mentioned in the Company Law.
The Board of Directors should be collegial and deliberative for the sake of gaining the benefit of each member, judgment and experience. The Chairman should take an active lead in promoting mutual trust, open discussion, constructive dissent and support for decisions after they have been made. The Board should meet frequently, usually more than the minimum required by law. All should attend meetings, and maintain informal communication between meetings. Unexcused absence(s) is not welcomed as it may disturb the functions of the Board and indicates that the person is not the type of the needed for efficient Board as stipulated in the Corporate Governance Code.
Commitment and accountability reflects the effectiveness of the Board and are essentially required and should be observed by all, taking in account that they are supposed to excel and give good example to related parties in the company, the shareholders and community stakeholders.
Dr. AbdelGadir Warsama
LEGAL COUNSEL
Email: AWARSAMA@WARSAMALC.COM
