22-02-2025
MPs to vote on shareholder rights in board appointments
Parliament will vote on Tuesday on a proposal to grant shareholders holding at least 10% of a company's capital the automatic right to appoint board members in proportion to their stake, regardless of company rules.
The amendment to the Commercial Companies Law seeks to remove a clause in Article 175 of Decree-Law No. 21 of 2001, which currently allows firms to override this right through their founding agreements. Supporters argue that the change would give minority shareholders a stronger voice in company decisions. The Bahrain Chamber of Commerce and Industry has backed the proposal, saying it would create a fairer balance among shareholders and prevent larger stakeholders from monopolising board seats. However, it suggested further review on how the rule would apply to companies with existing shareholder agreements.
The Bahrain Businessmen's Association has also endorsed the move, calling it beneficial for the business sector.
The proposal has been submitted by MPs Ahmed Sabah Al Salloom, Khalid Buanaq, Maryam Al Dhaen, Basma Mubarak, and Ali Saqer Al Doseri.
Under the amendment, shareholders with at least 10% of a company's capital would have the right to appoint board members in proportion to their stake, with fractional shares rounded to the nearest whole. Shareholders who do not exercise this right or lack enough shares to appoint a member could instead use their stake for voting. If the right is not exercised, it would be forfeited for that board election cycle.
The amendment consists of three articles: the first revises Article 175 to reflect the change, the second repeals any conflicting laws, and the third stipulates that the amendment would take effect the day after its publication in the Official Gazette.
