Capital Markets Authority (Corporate Governance) Regulations

1. These Regulations may be cited as the Capital Markets Authority (Corporate Governance) Regulations,

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. Subject to section 14 and Table F of the Companies Act, Cap. 106 these Regulations shall apply to a public listed company and market intermediaries

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. "Authority" means the Capital Markets Authority as established under section 4 of the Act;
2. "independent director" means a director who has no relationship or interest in the company or any of its subsidiaries or affiliates or their related interests;
3. "non-executive director" means a director who is not involved in the administrative or managerial operations of the company; "substantial shareholder" means a person who holds not less than fifteen percent of the voting rights of a public listed company and has the ability to exercise a majority voting.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) A public listed company shall in addition to the requirement to file a statement of compliance with the Registrar of Companies and the Capital Markets Authority under section 14 (4) of the Companies Act, Cap. 106 include in the company's corporate annual report a statement of compliance with these Regulations.
2. (2) A market intermediary may file a statement of compliance with these Regulations with the Authority and the principles prescribed in the statement of principles of corporate governance in the annual report.
3. (3) The statement of compliance required under subregulation (1) and (2), shall include a detailed explanation on how a public listed company or market intermediary has applied the principles prescribed in the statement of principles of corporate governance specified in Schedule 1 to these Regulations.
4. (4) A public listed company shall file with the Authority an annual report that discloses the information specified in Schedule II to these Regulations.
5. (5) Where a public listed company has not applied a principle stipulated under these Regulations, the Directors shall disclose in their annual report the reasons for departure.
6. (6) Where the Authority is not satisfied with the reasons for departure under subregulation (5), shall require the public listed company to comply with the principles provided for under these Regulations.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) A board of-
2. (a) a public listed company shall be composed of at least five directors who are fit and proper persons consisting of executive and non-executive directors; and
3. (b) a market intermediary shall be composed of a minimum number of directors prescribed by the authority and shall consist of executive and non-executive directors.
4. (2) A person shall not be appointed to the board of a public listed company or market intermediary unless the person is qualified to be appointed a director under the Companies Act, Cap. 106. ensure that the independent non-executive directors form at least onethird of the membership of the board.
5. (4) The composition of the board shall fairly reflect the company's shareholding structure and shall not be biased towards representation by a substantial shareholder.
6. (5) Where there is no majority shareholder but there is a single substantive shareholder, the board shall exercise judgment in determining the board representation of such shareholder and those of the other shareholders, which reflects the shareholding structure of the company.
7. (6) The board, shall on an annual basis, review its required mix, skills and expertise which the executive directors and independent or non-executive directors, bring to the board and disclose the same in the annual report.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) The board members of a public listed company or market intermediary shall be appointed by the shareholders in accordance with the Companies Act, Cap. 106.
2. (2) The shareholders shall while appointing the board members ensure that there is a formal and transparent procedure that is complied with.
3. (3) A person offering him or herself for appointment as a board member shall disclose any potential area of conflict of interests that may undermine his or her position as a board member.
4. (4) A person appointed as an executive director shall have a fixed service contract not exceeding five years and may be reappointed subject a to satisfactory performance appraisal. disclose all appointments and resignation of any serving board member in- (a) a newspaper of wide circulation;
5. (b) the company's website immediately upon appointment or resignation; and
6. (c) the annual report at the end of the financial year.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (3) A public listed company shall disclose in the annual report, policies for remuneration including incentives for the board and senior executive.
2. (4) The annual report referred to in sub regulation (3) shall include the remuneration for Directors in the following categories- (a) executive director's fees; (b) executive director's emoluments; (c) non-executive directors' fees; (d) non-executive directors' emoluments; (e) share options; (f) loans or any other credit facility; and (g) any other form of compensation.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. The board of a public listed company or market intermediary shall be accountable for the performance and long-term success of the company and, in the performance of its duties, the board is expected to act in good faith, with due diligence, reasonable care and in the best interests of the company

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (2) The board charter referred to in sub-regulation (1) shall include-
2. (a) general duties and responsibilities of the board and its committees; (b) board composition including minimum number of independent non-executive directors;
3. (c) the role of the board chairperson and the role of the managing director and other executive directors; (d) directors' nomination process; (e) the tenure and retirement age of directors; (f) remuneration of non-executive directors; (g) succession planning for board members; (h) areas that may constitute conflict of interest in relation to board operation and its activities; (i) matters reserved for the board and those delegated to its committees or to the management; (j) terms of reference of board committees; (k) composition of the board committees, quorum, purpose and any other matter related to board committees; (l) the role of the company secretary; (m) internal controls, risk management framework and monitoring mechanisms; and (n) general operations of the board including, board evaluations, and remuneration.
4. (3) The board evaluation referred to in subregulation (2) (n), shall be carried out at least once in every two years.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) A person shall not be appointed a chairperson of the board of directors of a public listed company unless, the person is qualified to be appointed as an independent non-executive Director and is not a board member of a securities exchange on which the company's securities are listed.
2. (2) A person shall not be appointed as a board chairperson to serve for more than two public listed companies or a subsidiary of a public listed company simultaneously.
3. (3) The board chairperson shall possess experience and competence to perform the functions of a chairperson of a public listed company or market intermediary.
4. (4) In exercise of the functions of the chairperson, the chairperson shall-
5. (a) promote high standards of integrity and governance across the public listed company or market intermediary; and
6. (b) promote effective communication between the board, management, shareholders and other stakeholders.
7. (5) The chairperson of the board shall not serve as a chairperson or member of a sub-committee of the board.
8. (6) A public listed company or market intermediary that wishes to appoint or designate a vice chairperson of the board shall follow the same procedure and requirements for the appointment of the chairperson of the board and define the functions of the deputy chairperson in the board charter.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (e) take lead role in the assessment, improvement and development of the board; (f) facilitate effective communication between the board, management shareholders and other stakeholders; and (g) represent the public listed company or market intermediary, together with the managing director to customers, the public, the media and staff.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (2) The managing director shall report to the board of directors.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (2) Where it is impracticable to separate the role of a chief executive officer and board chairperson, a public listed company or market intermediary may, with the approval of the shareholders combine the roles of the chairperson and chief executive officer subject to the following conditions-
2. (a) that the combination of the roles is for a specified period of time not exceeding two years; (b) that a public listed company or market intermediary shall appoint a deputy chairperson who is an independent director; and (c) that a public listed company or market intermediary shall disclose the rationale for combining the roles of the chief executive officer and chairperson in the annual report of the company.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) A public listed company or market intermediary shall have a succession policy to prepare for vacancies of chairperson of the board and chief executive officer.
2. (2) The board charter shall include a policy statement outlining the process the board shall follow to plan for the replacement of chairperson and chief executive officer.
3. (3) The board shall develop a staggered retirement plan to facilitate orderly succession of chairperson of the board and chief executive officer.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. A person shall not be appointed to be a board member in more than three public listed companies simultaneously

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (2) The company secretary shall report to the board, through the chief executive officer.
2. (3) The duties of the company secretary shall be defined in the board charter and shall include- (a) drawing up the annual calendar for board meetings; (b) circulating to the board members the meeting agenda and board packs at least seven days before the scheduled meeting; (c) organising and sending out notifications of board meetings and meetings of shareholders;
3. (d) recording and producing minutes of the board, board committees, annual general meeting and extraordinary meetings; (e) advising directors and shareholders on the legal and governance implications of proposed resolutions; (f) extracting and filing resolutions for registration with the relevant registries; (g) communicating board resolutions to the relevant persons; (h) coordinating the review of the board charter and committee terms of reference periodically for alignment with changes in the operating environment; and (i) monitoring changes in the shareholding of the financial institution and maintaining a shareholders' register.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) The board shall establish board committees for better utilisation of its resources and attaining more in-depth review of issues or areas relating to the operations of a public listed company or market intermediary.
2. (2) The board committees shall include the-
3. (a) audit and risk management committee; (b) nominations and remunerations Committee; and (c) any other committee as the board may determine.
4. (3) A board committee shall have approved terms of reference that outline the committee's functions, mandates and working procedures, including its membership, tenure for its members and a viable rotation schedule.
5. (4) The chairperson of the board committee shall maintain appropriate records, minutes and supporting documentation evidencing reviews and resolutions passed during the execution of functions specified in the terms of reference.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (2) The functions of the nomination and remuneration committee of the board shall include-
2. (a) recommending to the board the remuneration of the executive directors and the structure of their compensation package;
3. (b) responsible for leading the process for appointment of directors;
4. (c) ensuring plans are in place for orderly succession to both the board and senior management roles; (d) overseeing the succession planning for directors and senior positions;
5. (e) overseeing the board performance evaluation process;
6. (f) have delegated responsibility for setting remuneration for all executive directors and the chairman, including pension rights and any compensation payments, and
7. (g) recommending and monitoring the level and structure of remuneration for senior management.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) The board of directors shall constitute from among its members a committee on audit and risk with the majority directors being independent non-executive directors.
2. (2) The board should satisfy itself that at least one member of the audit and risk committee has recent and relevant experience in finance, accounting or auditing.
3. (3) The chairperson of the committee shall be an independent non-executive director and neither the chairperson of the board or the chief executive officer shall be members of the audit and risk committee. disclose the composition of the audit and risk committee in the annual report.
4. (5) The functions of the audit and risk committee of the board shall include- (a) overseeing the financial reporting process and the internal controls of the company; (b) reviewing and making recommendations on management programs established to monitor compliance with the code of conduct; (c) overseeing the process of selection of the external auditor, determination of the audit fees and any questions of resignation or dismissal of the external auditor; (d) providing oversight of the internal and external auditors; (e) reviewing and approving the audit scope and frequency; (f) ensuring that management is taking appropriate corrective actions in a timely manner to address control weaknesses, non-compliance with policies, laws and regulations and other problems identified by internal and external auditors;
5. (g) reviewing the independence of the company's external auditor on a regular basis; and (h) reviewing and monitoring the integrity of the quarterly, half- yearly and year-end financial statements of the company, and ensuring their compliance with International Financial Reporting Standards and other legal and regulatory requirements.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) The internal audit function shall have a direct reporting line to the board through the audit and risk committee of the board.
2. (2) The audit function shall be independent of the operational aspects of the public listed company or market intermediary. appoint an internal auditor.
3. (4) An internal auditor appointed under subregulation (3), shall have adequate seniority to be able to carry out the internal audit mandate with sufficient standing and skills. (5) The head of internal audit shall have the following powers- (a) have full and unfettered access to any records of a public listed company or market intermediary; (b) conduct his or her functions in line with the national and international audit standards; (c) follow up on internal audit issues identified in a timely manner; and (d) perform an audit of the public listed company or market intermediary's risk management framework commensurate with the level and depth of operations conducted by the public listed company or market intermediary at least annually. provide resources and adequate staff with adequate skills and knowledge to effectively audit the business lines and functions of the company.
4. (7) The head internal audit shall while exercising the audit function report to the audit and risk committee of the board.
5. (8) The performance of the head of internal audit shall be evaluated at least annually by the audit and risk committee of the board.
6. (9) The audit and risk committee of the board may use its discretion to seek the views of the chief executive officer with regard to the performance of the administrative tasks assigned to the internal auditor.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) A board meeting shall not be convened without at least seven days' notice to the board members.
2. (2) The board and board committee meetings shall be held atleast once every three months. (3) The company secretary shall ensure that minutes of board meetings are clearly recorded, complete and signed.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (2) A shareholder of a public listed company or market intermediary shall receive relevant information on the company's performance through the distribution of regular annual reports and accounts, half-yearly results and quarterly results.
2. (3) The board of a public listed company shall ensure that every shareholder participates in making decisions including-
3. (a) changes to articles of incorporation or similar governing documents of the company; and (b) authorisation of additional shares, rights issues, share splits, bonus issues, major disposal of company assets, restructuring, takeovers, mergers, acquisitions or reorganisations.
4. (4) The board of the public listed company shall ensure that every shareholder receives proof of ownership of his or her shares in the company which may include a certificate of shares or certified statement evidencing such ownership where such shares are held in an immobilised format in an approved Securities Central Depository.
5. (5) Every shareholder shall have the right to participate and vote at the general shareholders' meeting including the election of directors. (6) Every shareholder shall be entitled to ask questions or seek clarification on the company's performance as reflected in the annual reports and accounts or in any matter that may be relevant to the company's performance or promotion of shareholder's interest and to receive explanation from the directors and management.
6. (7) Every shareholder shall be entitled to distributed profit in form of dividends and other rights for bonus shares, scrip dividends or rights issues as applicable and in the proportion of its shareholding in the company's share capital.
7. (8) The annual report and accounts to shareholders shall disclose a list of major shareholders of the company and their shareholding.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) The board of a public listed company or market intermediary shall provide every shareholder with sufficient and timely information concerning the date, location and agenda of the general meeting as well as full and timely information regarding issues to be decided during the general meetings.
2. (2) A public listed company shall protect the shareholders right to participate at a general meeting.
3. (3) For purposes of subregulation (2), the public listed company shall-
4. (a) provide shareholders with information in a simplified, accessible and understandable manner; (b) provide shareholders sufficient information on voting rules and procedures; (c) allow sufficient time for shareholders' questions on matters pertaining to the company's performance;
5. (d) provide an opportunity for shareholders to amend or adopt an agenda; and
6. (e) allow shareholders to vote in person or by proxy.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) Where a public listed company or market intermediary convenes and or holds a general meeting by electronic means the board of a public listed company or market intermediary shall ensure that the selected mode- (a) does not restrict shareholder participation and facilitates participation in the meeting to the same degree as a person in physical attendance; and (b) takes into account its historic practices with respect to shareholder meetings, its shareholder base, shareholders' previous level of attendance and engagement.
2. (2) In addition to all mandated meeting notices, make public and widely circulate the procedures for shareholder access to and participation in virtual meetings just as they would for in person meetings and adhere to those procedures to ensure that all shareholders receive a meaningful opportunity to participate in the meeting.
3. (3) The board of a public listed company or market intermediary shall communicate to the shareholders within a reasonable time before the meeting, any changes to the procedures for accessing the meeting or related to the mode of the meeting
4. (4) The board of a public listed company or market intermediary shall use its best endeavors to ensure that the online platform on which the meeting is to be conducted is easily accessible to all shareholders, to the best practicable extent.
5. (5) The board of a public listed company or market intermediary shall establish procedures to validate online meetings' participants as shareholders, shareholder's proxy or invited attendees and take reasonable measures to verify that each person deemed present and permitted to vote at the meeting is a shareholder or the holder of a valid proxy from a shareholder.
6. (6) The board of a public listed company or market intermediary shall establish processes that guarantee accurate and proper recording of attendance and shareholder's views.
7. (7) The board of a public listed company or market intermediary shall ensure that the selected electronic platform provides shareholders and proxy holders a reasonable opportunity to participate in the meeting by viewing and hearing meeting proceedings as they happen through utilising a platform and participating by commenting and asking questions.
8. (8) The board of a public listed company or market intermediary shall establish clear procedures on how shareholders can present shareholder proposals during the meeting.

4 further items remain in the statutory text above.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) The Authority shall have power to enforce compliance with these Regulations by the public listed company or market intermediary through investigation or inspection of the affairs of a public listed company or market intermediary.
2. (2) Where the Authority determines, through an inspection or investigation, that a public listed company or market intermediary is not in compliance with these Regulations, the Authority may impose any or all of the corrective actions provided for under sections 19, 56 or 145 of the Act.
3. (3) Notwithstanding subregulation (2), the Authority may where it considers it to be in the interest of the public or the public listed company or market intermediary, direct for the removal from office a chairperson, director or the chief executive officer for failure to comply with these Regulations and order that another person be appointed in that office.

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. (1) In addition to the remedial measures under regulation 25 of these Regulations, the Authority may impose any or all of the following administrative sanctions with regard to a public listed company or market intermediary that is not in compliance with these Regulations- (a) in the case of market intermediaries-
2. (i) suspension from on-boarding new clients; (ii) suspension from disposal of fixed assets; or (iii) prohibition from declaring or paying dividends. (b) in the case of public listed company-
3. (i) prohibition on declaring or payment of dividends (ii) suspension of the company's counter from trading on an exchange on which it is listed

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

1. A public listed company or market intermediary shall be required to comply with the requirements of these Regulations within twelve months from the date of commencement of these Regulations SCHEDULES Regulation 4(3) SCHEDULE 1 STATEMENT OF PRINCIPLES OF CORPORATE GOVERNANCE

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.