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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
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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)
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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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.”
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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.
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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
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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
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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.”
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Evaluation of performance
• Annual review of performance
• Board operation/practice
• Committee performance
• Director performance
• Board composition
• Help of external experts, when
appropriate
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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
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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
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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
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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.”