www.corporatedirector.co.uk
director development centre
www.corporatedirector.co.uk
Corporate Governance Code
The practical applications of theThe practical applications of the
C...
www.corporatedirector.co.uk
Brefi Group
““Releasing Human Potential”Releasing Human Potential”
We help individuals and tea...
www.corporatedirector.co.uk
Brefi Group
Vision and purpose
World class processes
Competent people
www.corporatedirector.co.uk
Journey to Governance
Investors in People
Management Charter Initiative
Standards for the Boar...
www.corporatedirector.co.uk
Corporate Governance Code
Purpose and background
• Establish best practice
• Protect investors...
www.corporatedirector.co.uk
Application
All operating Joint StockAll operating Joint Stock
Companies incorporated under th...
www.corporatedirector.co.uk
Comply or Explain
• Minimum standard
• Written governance guidelines
• Report annually to shar...
www.corporatedirector.co.uk
UK guidance
In the UK, the Code is seen as: -
• a guide to principles, structure and
processes...
www.corporatedirector.co.uk
Principle 1
The company shall be headed byThe company shall be headed by
an effective, collegi...
www.corporatedirector.co.uk
Principle 2
The directors and officers shallThe directors and officers shall
have full loyalty...
www.corporatedirector.co.uk
Principle 3
The board shall have rigorousThe board shall have rigorous
controls for financial ...
www.corporatedirector.co.uk
Principle 4
The company shall have rigorousThe company shall have rigorous
procedures for appo...
www.corporatedirector.co.uk
Principle 5
The company shall remunerateThe company shall remunerate
directors and officers fa...
www.corporatedirector.co.uk
Principle 6
The board shall establish a clearThe board shall establish a clear
and efficient m...
www.corporatedirector.co.uk
Principle 7
The company shall communicateThe company shall communicate
with shareholders, enco...
www.corporatedirector.co.uk
Principle 8
The company shall disclose itsThe company shall disclose its
corporate governancec...
www.corporatedirector.co.uk
Principle 9
Companies which refer toCompanies which refer to
themselves as “Islamic” mustthems...
www.corporatedirector.co.uk
Aspirations of the Code
““Application of the nine principlesApplication of the nine principles...
www.corporatedirector.co.uk
Independent directors
At least half of a company’s board
should be non-executive directors
and...
www.corporatedirector.co.uk
Select’n, appointment, induct’n
Nominations committee independent
Limit of 15 directors per bo...
www.corporatedirector.co.uk
Roles and responsibilities
• Board role v. shareholders v. officers
• Board’s fiduciary duty o...
www.corporatedirector.co.uk
Relations with shareholders
Each director represents all shareholders
All directors attend sha...
www.corporatedirector.co.uk
Good practice behaviour
Independent chairman
Separation of chairman and CEO
At least half dire...
www.corporatedirector.co.uk
Evaluation of the Board
“The evaluation process is a
mechanism to improve board
effectiveness,...
www.corporatedirector.co.uk
Evaluation of performance
• Annual review of performance
• Board operation/practice
• Committe...
www.corporatedirector.co.uk
Corporate Governance Program
1. Briefing and process audit
2. Shadow attendance at meeting/
in...
www.corporatedirector.co.uk
Impact of the Code?
1. Roles and responsibilities of directors
2. Selection, appointment and i...
www.corporatedirector.co.uk
Free report
Visit our web site: -
www.CorporateDirector.co.uk
www.corporatedirector.co.uk
Richard WinfieldRichard Winfield
Director Development CentreDirector Development Centre
Brefi ...
www.corporatedirector.co.uk
director development centre
www.corporatedirector.co.uk
Impact of the Code?
Establish best practice
Protect investors and stakeholders
Attract investm...
www.corporatedirector.co.uk
Evaluation of the Board
Recommendation: While the evaluation is a
responsibility of the entire...
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The practical applications of the Bahrain Corporate Governance Code

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A talk to the Bahrain Management Society introducing the new Corporate Governance Code and its practical application and implications.

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The practical applications of the Bahrain Corporate Governance Code

  1. 1. www.corporatedirector.co.uk director development centre
  2. 2. www.corporatedirector.co.uk Corporate Governance Code The practical applications of theThe practical applications of the Corporate Governance CodeCorporate Governance Code Richard Winfield Brefi Group Limited, UK
  3. 3. www.corporatedirector.co.uk Brefi Group ““Releasing Human Potential”Releasing Human Potential” We help individuals and teams in organisations discover and achieve their potential so that they can become more effective with less stress
  4. 4. www.corporatedirector.co.uk Brefi Group Vision and purpose World class processes Competent people
  5. 5. www.corporatedirector.co.uk Journey to Governance Investors in People Management Charter Initiative Standards for the Board Corporate Governance Code
  6. 6. www.corporatedirector.co.uk Corporate Governance Code Purpose and background • Establish best practice • Protect investors and stakeholders • Attract investment • Enhance company value
  7. 7. www.corporatedirector.co.uk Application All operating Joint StockAll operating Joint Stock Companies incorporated under theCompanies incorporated under the Bahrain Commercial CompaniesBahrain Commercial Companies LawLaw 1. Introduction – 1/1/2011 2. Model for all other companies (Revisions for other types of companies)
  8. 8. www.corporatedirector.co.uk Comply or Explain • Minimum standard • Written governance guidelines • Report annually to shareholders ““Comply or explain”Comply or explain”
  9. 9. www.corporatedirector.co.uk UK guidance In the UK, the Code is seen as: - • a guide to principles, structure and processes • which gives freedom within the framework • it is to be adopted in spirit as well as the letter • boards should think deeply, thoroughly, on a continuing basis
  10. 10. www.corporatedirector.co.uk Principle 1 The company shall be headed byThe company shall be headed by an effective, collegial and informedan effective, collegial and informed boardboard 1.8 At least annually the board shall conduct an evaluation of its performance and the performance of each committee and each individual director
  11. 11. www.corporatedirector.co.uk Principle 2 The directors and officers shallThe directors and officers shall have full loyalty to the companyhave full loyalty to the company
  12. 12. www.corporatedirector.co.uk Principle 3 The board shall have rigorousThe board shall have rigorous controls for financial audit andcontrols for financial audit and reporting, internal control, andreporting, internal control, and compliance with lawcompliance with law
  13. 13. www.corporatedirector.co.uk Principle 4 The company shall have rigorousThe company shall have rigorous procedures for appointment,procedures for appointment, training and evaluation of the boardtraining and evaluation of the board 4.5 Induction and training of directors
  14. 14. www.corporatedirector.co.uk Principle 5 The company shall remunerateThe company shall remunerate directors and officers fairly anddirectors and officers fairly and responsiblyresponsibly 5.5 Officer’s remuneration refers to performance-based incentives
  15. 15. www.corporatedirector.co.uk Principle 6 The board shall establish a clearThe board shall establish a clear and efficient management structureand efficient management structure 6.2 At least annually the board shall review and concur in a succession plan … both in emergencies and in the normal course of business
  16. 16. www.corporatedirector.co.uk Principle 7 The company shall communicateThe company shall communicate with shareholders, encourage theirwith shareholders, encourage their participation, respect their rightsparticipation, respect their rights Recommendation: all directors should attend and be available to answer questions from shareholders at any shareholders meeting
  17. 17. www.corporatedirector.co.uk Principle 8 The company shall disclose itsThe company shall disclose its corporate governancecorporate governance 8.1 the board shall adopt written corporate governance guidelines … referring to the principles and numbered directives of the Code. Recommendation: The board shall establish a corporate governance committee.
  18. 18. www.corporatedirector.co.uk Principle 9 Companies which refer toCompanies which refer to themselves as “Islamic” mustthemselves as “Islamic” must follow the principles offollow the principles of Islamic Shari’aIslamic Shari’a
  19. 19. www.corporatedirector.co.uk Aspirations of the Code ““Application of the nine principlesApplication of the nine principles and directives of the Code willand directives of the Code will ensure that companies achieveensure that companies achieve long-term success in terms of theirlong-term success in terms of their mission and objectives – and thatmission and objectives – and that they maintain the confidence ofthey maintain the confidence of investors and other stakeholders.”investors and other stakeholders.”
  20. 20. www.corporatedirector.co.uk Independent directors At least half of a company’s board should be non-executive directors and at least three of those persons should be independent directors. The chairman of the board should be an independent director, and should not be the CEO.
  21. 21. www.corporatedirector.co.uk Select’n, appointment, induct’n Nominations committee independent Limit of 15 directors per board Limit of three directorships per person Regularly review time commitment Three year term, six year review Formal tailored induction Continuing orientation, education
  22. 22. www.corporatedirector.co.uk Roles and responsibilities • Board role v. shareholders v. officers • Board’s fiduciary duty of care • Understanding of Governance Code • Personal written agreement • Formal board charter
  23. 23. www.corporatedirector.co.uk Relations with shareholders Each director represents all shareholders All directors attend shareholder meetings Shareholders approve incentives Web site details shareholders’ rights
  24. 24. www.corporatedirector.co.uk Good practice behaviour Independent chairman Separation of chairman and CEO At least half directors independent Conflict of interest/personal interest All directors same board information Right to independent advice Succession planning/emergencies
  25. 25. www.corporatedirector.co.uk Evaluation of the Board “The evaluation process is a mechanism to improve board effectiveness, maximise strengths and tackle weaknesses, leading to an immediate improvement of performance throughout the organisation.”
  26. 26. www.corporatedirector.co.uk Evaluation of performance • Annual review of performance • Board operation/practice • Committee performance • Director performance • Board composition • Help of external experts, when appropriate
  27. 27. www.corporatedirector.co.uk Corporate Governance Program 1. Briefing and process audit 2. Shadow attendance at meeting/ introduction to corporate governance 3. Director profiles and360° feedback 4. Individual director appraisals 5. Collective board compliance report 6. Continued training and development
  28. 28. www.corporatedirector.co.uk Impact of the Code? 1. Roles and responsibilities of directors 2. Selection, appointment and induction of directors 3. Good practice board behaviour 4. Relations with investors and stakeholders 5. Evaluation of performance
  29. 29. www.corporatedirector.co.uk Free report Visit our web site: - www.CorporateDirector.co.uk
  30. 30. www.corporatedirector.co.uk Richard WinfieldRichard Winfield Director Development CentreDirector Development Centre Brefi Group LimitedBrefi Group Limited www.CorporateDirector.co.ukwww.CorporateDirector.co.uk Contact:Contact: Hussain RedhaHussain Redha EstisharatEstisharat hussain@estisharat.nethussain@estisharat.net
  31. 31. www.corporatedirector.co.uk director development centre
  32. 32. www.corporatedirector.co.uk Impact of the Code? Establish best practice Protect investors and stakeholders Attract investment Enhance company value
  33. 33. www.corporatedirector.co.uk Evaluation of the Board Recommendation: While the evaluation is a responsibility of the entire board, it should be organized and assisted by an internal board committee and, when appropriate, with the help of external experts. UK: “Evaluation of the board of FTSE 350 companies should be externally facilitated a least every three years.”

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