UAE Ministry of Economy finalises 'Governance Regulations of Private Shareholding Companies'

The 'Governance Regulations of Private Shareholding Companies' was drafted by a special committee appointed by the Ministry in view of the UAE Government's recognition of the growing role of private shareholding companies in the economic growth of the country.

H.E. Hamaid Ali Bin Butti Al Muhairi, Assistant Under Secretary for Companies and Control Affairs, Ministry of Economy, commented "The Ministry developed a special regime for the 'Governance Regulations of Private Shareholding Companies' to create a set of regulations, standards and procedures that achieve institutional discipline in corporate management in accordance with global standards and techniques. The number of private shareholding companies has greatly increased, along with the magnitude of their investments and the wide base of shareholders, which has tremendously boosted their contribution to the economic development of the country."

"The resolution specifies the responsibilities and duties of the board members and the executive management of the company, taking into account the protection of the shareholders' and the concerned parties' rights. It also aims to control and provide internal auditing of procedures undertaken by the company in order to verify its commitment to laws, regulations, and decisions governing its work," added H.E. Al Muhairi.

The new resolution details the specific roles and functions of the members of the Board of Directors (BOD), including the Chairman, of concerned companies. It also mandates the BOD to create permanent committees for follow-up/remuneration, which handles policies regarding remuneration, privileges, motivations and salaries; and auditing, whose main duties involve auditing the company's accounts and financial systems.

Also incorporated in the resolution are the rights of shareholders and rules of occupational conduct applicable across all levels of the company.

To optimise the effectiveness of the new law, the Ministry conducted a series of initiatives, including posting a draft version of the resolution on its website, to gather the opinion and proposals of concerned parties. The Ministry also held a number of discussions where it received valuable inputs from private shareholding companies.