The Capital Market Authority has recently sought the opinion of public companies, audit firms, law firms and the public on the draft amendments to the Code of Corporate Governance which was prepared by the Corporate Governance Committee constituted by CMA to review the Code to develop corporate Governance practices in the Sultanate.
The updated draft was posted on CMA website in Arabic and English for access and feedback on the provisions and processes for best practices after consideration of the opinions and feedback on the initial draft by public companies, audit firms and law firms.
The new draft includes additions to certain provisions to enhance the principles of wise governance including special procedures for independent directors in the boards of public companies with new requirements to ensure independence of the director. There are also procedures for constitution of two committees “ audit committee and nomination and remuneration committee” as standard for constitution of other committees of directors. There is also a requirement banning the chairman of the audit committee from acting in any other committee to enhance independence and ensure non-interference as one of the pillars of governance.
The Committee set up standards and rules for related parties in accordance with the Executive Regulation of the Capital Market Law and IFRS. At least 25% was added as standard for individual control affecting the related party in addition to interpretations for the parent companies, subsidiaries and affiliates.
The provisions relating to the responsibilities of the directors were reviewed beside the requirements of corporate social responsibility.
It is noteworthy that the review of the Code of Corporate Governance was initiated by the need for continued upgrading of the Corporate Governance standards and practices to enhance investor confidence in the capital market and to protect the rights and interests of shareholders further to the benefits of corporate governance on more production and growth.
CMA had has constituted a work team to redraft the Code of Corporate Governance with the participation of representatives of public companies, family companies and law firms.
The updated draft was posted on CMA’s website in order to allow the public to provide input to upgrade the efficiency of the Omani capital market.
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