Up Again Bahrain: Governance


1. What are the key topics that boards should focus on to ensure proper discharge of their duties as directors, as their businesses return to work following a lockdown?

The competent authorities in Bahrain have not issued any specific guidance or changes to corporate governance policies or recommendations during the COVID-19 pandemic – save for some flexibility in the form of AGMs, which may now be conducted electronically.

Directors should continue to act in compliance with their obligations (which will vary depending on the type of company and the specific obligations set out in the company's constitutional documents).

In particular, directors should not exceed the limits of their authority in dealing with unusual or unprecedented circumstances.

For companies facing financial distress as a result of the COVID-19 pandemic, boards should be mindful of their obligations under relevant legislation, including the Commercial Companies Law and Bankruptcy Law. A failure to act properly can result in personal liability for the directors.

Bahrain continues to implement restrictions on the number of employees allowed in commercial locations and imposes certain health and safety obligations. Directors should conduct a proper analysis of return-to-work logistics.

2. Should boards adopt particular governance practices in this context?

None as of yet.

3. To what extent are boards being encouraged to take into account corporate purpose and values in the context of COVID-19 and a return to work?

There has been no formal encouragement for boards of companies in Bahrain to take into account corporate purpose and values in the context of COVID-19 and a return to work. However, such considerations should undoubtedly form part of a board's decision-making.