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According to the corporate governance code taking effect from April 30, shareholders of listed companies will have the authority to withhold administrative board bonuses.
Dr Ashraf Abdel Monem, legal consultant, Emirates Securities and Commodities Authorities (Esca), said that Resolution 518 of 2009, Concerning Corporate Governance Rules and Corporate Discipline Standards, and its amendment No48 of 2010, which applies to public shareholding companies stressed that for the administrative board to enjoy a bonus, the company should have distributed no less of five per cent dividend. "Should the rate be less, the administrative board cannot enjoy bonuses," he said.
However, if a company makes a profit, but decides to expand its businesses rather than distribute dividend, shareholders have the right to vote on the bonus during the company's general assembly meeting, Dr Monem said. The maximum bonus that administrative board members can enjoy is set at 10 per cent after profit distribution, he said.
This requirement, together with other conditions that should be met by public shareholding firms, were discussed in a forum held by the Ras Al Khaimah Chamber of Commerce and Industry in co-ordination with Esca yesterday.
Dr Monem said that Esca is looking for the co-operation of shareholders. The resolution granted the right to shareholders to file a case against the administrative board should their welfare be affected
