Following on from our recent article on the Capital Market
Authority's (CMA) recent Circular (E/10/2016) clarifying
aspects of the new Code of Corporate Governance for Public Listed
Companies (the Code), we now discuss some of the other salient
points the Circular covers.
Holding board meetings by circulation, video conference or
Any ambiguity as to whether board meetings can be held by
circulation, video conference or teleconference has finally
The Code states that board meetings can be held by circulation.
The Circular's additional guidance is that the exact rules and
policy for how circular resolutions are adopted should be set by
the company, ideally in its Articles of Association.
Under the Code, board meetings can also be held by video
conference. The Circular clarifies that where only a few directors
participate by video conference, these meetings do not count as one
of the two video conference board meetings permitted per annum
under the Code.
A further key point clarified by the Circular is that meetings
held by teleconference are not permitted as directors should be
able to see and hear each other.
The role of the board secretary
Under the Fifth Principle of the Code, the board shall appoint
an experienced and qualified secretary to assist the board in
complying with the Code and applicable laws and regulations.
The CMA advises that boards should consider appointing a new
secretary from time to time to ensure impartiality.This is based on
the CMA's past experience which has demonstrated that board
secretaries who remain in their posts for long periods may become
influential and thereby impede board efficiency and
The direction is that the secretary should report in performing
his/her duties to the board only. The Circular clarifies
that it is permissible for the secretary to hold other positions
within the company (such as the compliance officer, internal
auditor or the secretary of other committees), but there should be
safeguards in place to protect the secretary from the influence of
the senior executive management or from conducting two roles that
both report to the board (e.g. the secretary should not also be the
CEO, general manager or the CFO). Secretaries should have
suitable experience of not less than five years and listed
companies can engage a professional firm as long as they meet the
requirements under the Code.
The role of the nomination and remuneration committee
The role of the nomination and remuneration committee, as the
Circular clarifies, is, amongst other things, assisting and
advising the shareholders to evaluate director nominees. The
final decision on the selection of directors remains with
the general assembly and not with the nomination and
Further guidance in the Circular is that it is permissible for
members of the audit committee and the executive committee to also
act as members of the nomination and remuneration committee with
the exception that the chairperson of the audit committee should
not be a member of any other committee of the board.
Dentons, Muscat has more than three decades of experience of
advising corporates in corporate governance issues in
Oman. For any points of clarification on the new Code, the
Circular and on aspects the Code discussed in this article, please
do not hesitate to contact us. We would be very happy to hear
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