Former Institutional Discipline and Governance Standards

Chairman decision setting institutional discipline and governance standards for public joint stock companies, now listed by the CMA among superseded regulations.

Summary

Decision No. 7/R.M of 2016 set the institutional discipline and corporate governance standards for UAE public joint stock companies listed on a UAE market. Issued in Abu Dhabi on 28 April 2016 under Federal Law No. 4 of 2000 and the Companies Law (Federal Law No. 2 of 2015), it took effect the day after publication in the Official Gazette (Article 55) and repealed conflicting resolutions and controls (Article 54). Decision No. 3/R.M of 2019 amended several articles, and Decision No. 33/R.M of 2019 replaced the definition of material information from 1 December 2019. The Capital Market Authority (the former Securities and Commodities Authority) now lists it among superseded regulations; governance of joint stock companies is now set by the Governance Guide issued by Decision No. 3/Chairman of 2020.

Article 2 applied Chapter 1 (institutional discipline) and Chapter 3 (general provisions) to all local listed public companies, their directors, managers and auditors, and Chapter 2 (corporate governance) to the same companies except Central Bank-supervised banks and finance firms; foreign listed companies were outside it. Article 3 required secret cumulative voting for board elections, a UAE national chairman and majority, and government board seats where government held 5% or more. Article 4 separated the chairman from executive roles, and Article 5 required four board meetings a year.

Article 14 required conflicted directors to declare and abstain. Article 15 required board approval for related party transactions up to 5% of capital and general assembly approval, with an accredited valuation, above that. Article 19 gave holders of 5% or more rights of inspection and court action. Article 21 capped board remuneration at 10% of net profit. Article 40 required at least one-third independent directors and female candidates, and Article 53 set warnings, fines and referral to prosecution.

Who it applies to

Local public joint stock companies listed on a UAE securities market, their chairmen, board members, senior executives and auditors; Chapter II did not apply to Central Bank-supervised banks and finance companies, and none of it to foreign listed companies.

Contents

English official text in 55 articles. Open the full text or jump to a provision:

1. Article 1 — Definitions [2][3]
2. Article 2 — Scope of Resolution Application and Effect
3. Article 3 — The Formation of the Board of Directors
4. Article 4 — Chairman of the Board of Directors
5. Article 5 — Board of Directors’ Meeting
6. Article 6 — Participation in the Board of Directors Meeting Via
7. Article 7 — Board of Directors Decisions by passing
8. Article 8 — Minutes of the Board of Directors Meetings
9. Article 9 — Delegation of Administration
10. Article 10 — Vacancy of the Board Member Position
11. Article 11 — Obligations of a Member of the Board of Directors
12. Article 12 — Register of Insiders [6]
13. Article 13 — Confidentiality of Data and Information
14. Article 14 — Conflict of Interests
15. Article 15 — Transactions With Related Parties
16. Article 16 — Related Parties Record
17. Article 17 — Company's Disclosure of related Parties’
18. Article 18 — Related Party Disclosure
19. Article 19 — Access to Transactions Concluded With related
20. Article 20 — Obtaining the Opinion of an External Consultant
21. Article 21
22. Article 22 — Dismissal of a Board or Executive Management
23. Article 23 — General Assembly Meeting
24. Article 24
25. Article 25 — The Record of the Minutes of Meetings of the General
26. Article 26
27. Article 27 — General Assembly Meeting Arrangements
28. Article 28 — Listing an Item in the General Assembly Agenda
29. Article 29 — Issuance of a Special Resolution
30. Article 30 — Implementation of the Resolutions of the General
31. Article 31 — Increasing the Company’s Capital
32. Article 32
33. Article 33 — The Required Controls to Ensure Shareholders’
34. Article 34 — Distribution of Profits
35. Article 35 — Investor Relations
36. Article 36 — Selection of the Auditor
37. Article 37
38. Article 38 — Prohibitions of Auditors
39. Article 39
40. Article 40 — Controls of Nomination for Board Membership
41. Article 41 — Terms of Nomination for Board Membership
42. Article 42 — Duties of the Chairman of the Board of Directors
43. Article 43 — Duties of the Board of Directors
44. Article 44 — Duties of the Non-Executive Board members
45. Article 45
46. Article 46
47. Article 47 — The Nominations and Remunerations Committee
48. Article 48 — Audit Committee
49. Article 49 — Duties of the Audit Committee
50. Article 50 — Internal Control
51. Article 51 — Compliance Officer
52. Article 52 — Corporate Governance Report
53. Article 53 — Breach of the Resolution
54. Article 54 — Repeal of Conflicting Provisions
55. Article 55 — Publication and Enforcement of the Decision

Key provisions

Penalties

Article 53 allowed the Authority to issue a written warning to the company, its directors, managers or auditors, impose a fine up to the maximum in the Companies Law, or refer the breach to the Public Prosecution, with conciliation available under Board Decision No. 42 of 2015.

History and citations

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