The Capital Market Authority called on the public and all concerned with governance of government owned companies, audit firms, law firms and academicians to give their opinion on the draft code of governance for government owned companies prepared by CMA based on Article 20 of the Commercial Companies Law promulgated by Royal Decree No. 18/2019 which provides “ The CMA shall set out governance principles for public joint stock companies and the companies in which the government owns shares.”
The draft has been posted on the CMA’s website for two weeks for public consultation as part of CMA’s methodology in posting draft laws and regulations for public opinion and comments before final approval to attain community participation in the legislative systems governing the capital market and insurance sectors to avail their expertise for best practices and the interests of stakeholders.
The issuance of code of governance for government owned companies comes from the role the governance plays in the management and control of the companies to achieve sustainability of the purposes for which they are established such as sustainable development and robust economy through striking balance between the economic and social goals of the government and the goals of the community and to encourage efficient use of human and financial resources to create a framework regulating accountability and responsibility of all stakeholders.
The principles aims to create a minimum reference framework for governance of pension fund, State General Reserve Fund and the companies in which the government owns shares to assist such companies to formulate their internal regulations relating to governance to include a set of specific policies, processes and procedures and to oblige them to monitor the governance of their subsidiaries.
The code will oblige the government owned companies to disclose through the their respective websites and the unified portal to be created by CMA, the quarterly financial statements and external auditors’ reports which shall show the constitution of the board of directors, independent directors, subcommittees, remuneration of directors and senior management (most senior five executives) and the details of the fixed remuneration, performance related bonuses and the financial burden for carrying out non-economic national services.
The code comprises eleven principles on wise management the first is that the government owned company is a commercial company carrying out business on commercial basis and is subject to all the laws governing commercial companies in Oman. The second principle is that the company must have efficient regulatory and legal framework, the third is that the government is owner and shareholder in the company and acts accordingly. The other principles contains details relating to constitution of the board of director, responsibilities, powers and accountability of directors in addition to the code of conduct of directors, equal treatment of other shareholders other than the government further to clauses regulating related party and stakeholders transaction and the corporate social responsibility.
It is noteworthy that public joint tock companies in which the government holds share are subject to the code of corporate governance issued in 2015.
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