Corporate Governance in Bahrain

Bahrain has a Corporate Governance Code (the Code) to establish best-practice corporate governance principles in the country and to provide protection for investors and other company stakeholders through compliance with those principles. International experience has proven that good corporate governance attracts investment, protects investors and other stakeholders, and enhances companies’ value.

The Code aims to bring international corporate governance standards to public companies, and in particular financial institutions, incorporated under the Bahrain Commercial Companies Law (the Companies Law). The Code came into effect on 1 January 2011, with full compliance to be met by public companies by the end of the same year.

Commercial Companies Law in Bahrain

The Companies Law already implements several corporate governance standards that the Code seeks to supplement and expand on. In this regard, it should be noted that the Code is not a stand-alone law and should be read in conjunction with the Companies Law.

Among the eight corporate governance principles addressed in the Code are those relating to board and director duties, remuneration for directors and officers, internal financial controls, management structure of the board and the board’s communication with shareholders.