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Company Law – Article 183: The chairman of the board is the company’s chairman, and represents it before third parties, and his signature is considered as a signature of the board of directors before third parties.

Among the board members, one person is elected as Chairman of the Board of Directors. Bahrain Company Law requires that the board chairman should be elected for a period of one year unless the company’s articles of association provide for another period (Article 181).

Basel Committee on Banking Supervision explains the role of the chairman as critical in the proper functioning of the board. In the document “Principles for Enhancing Corporate Governance” (released in October 2010), the Basel Committee states:

•The chairman of the board provides leadership to the board and is responsible for the board’s effective overall functioning, including maintaining a relationship of trust with board members. The chairman should possess the requisite experience, competencies and personal qualities in order to fulfil these responsibilities.

•The chairman should ensure that board decisions are taken on a sound and well-informed basis. He or she should encourage and promote critical discussion and ensure that dissenting views can be expressed and discussed within the decision-making process.

•To achieve appropriate checks and balances, an increasing number of banks require the chairman of the board to be a non-executive, except where otherwise required by law. Where a bank does not have this separation and particularly where the roles of the chair of the board and chief executive officer (CEO) are vested in the same person, it is important for the bank to have measures in place to minimise the impact on the bank’s checks and balances of such a situation (such as, for example, by having a lead board member, senior independent board member or a similar position).

Companies may also seek assistance from UAE’s Code of Corporate Governance while defining responsibilities of chairman of the board. UAE Code of Corporate Governance (Article 4) states that:

The tasks and responsibilities of the Chairman of the Board of Directors shall include without limitation:

•to ensure the efficiency and timely performance and discussion of any and all main issues by the Board of Directors;

•to be mainly responsible for drafting and approving the agenda of every meeting of the Board of Directors taking into consideration any matter proposed by the other Directors, this responsibility can be conferred by the Chairman to a Director or the Reporter of the Board of Directors;

•to encourage all Directors to fully and efficiently participate in handling the affairs of the Board of Directors for ensuring that the Board of Directors is working in the best interests of the Company;

•to take the proper actions for ensuring efficient communication with Shareholders and communicating their opinions to the Board of Directors; and

•to allow efficient participation of the Non Executive Directors in particular and to promote constructive relations between Executive and Non Executive Directors.