Manama: The Bahrain Economic Development Board (EDB), in cooperation with the Ministry of Industry, Commerce and Tourism, and the Central Bank of Bahrain, held a workshop to discuss proposed reform to the current legal provisions that regulate the liability of Directors and Managers within the Company Law.
The proposed reform was presented for discussion after the participants benefited from the insight of legal experts on how the issue of Directors and Managers Liability is regulated around the world.
The workshop commenced with a presentation by Dr. Riyadh Seyadi, a judge at the commercial courts of the Kingdom of Bahrain on the current legal provisions that regulate directors and managers liability. Dr. Jameel Alalawi, Senior Legal Advisor at the Economic Development Board spoke on the Aspects and Paraments of Regulating Directors and Managers under Comparative Law, especially in the European Union, USA, UK, Japan and Korea.
International experts spoke on how the liability of directors and mangers duties is regulated in the UK, USA, France and Germany. The international experts included Hussein Baxter, a Senior Associate of Freshfields Bruckhaus Deringer’s Corporate team; Norbert Knapke, a corporate partner in the Chicago office of Kirkland & Ellis LLP; Dr. Thorsten Volz, a Partner and Head of the Dusseldorf Office of Watson, Farley & Williams, and Dr. Myriam Mailly, a business Lawyer in France who has been teaching since 2006 at law schools as well as at the SKEMA Business School.
As company directors and mangers have a sensitive role in the period approaching insolvency, Sameera Musayeva from the United Nations Commission on International Trade Law (UNCITRAL) outlined the commission’s recommendations for regulating the duties of company directors in the vicinity of insolvency.
The proposed reform was presented to the participants by Dr. Jameel Al Alawi and Ameena Al Onaisi, head of the Corporate Legal Affairs at the EDB.
Legislation regulating directors and managers liability specifies the duties of directors and the executive management, and places liability for failure to carry out such duties. Amongst the aims of specifying such obligations is to protect the directors and managers when making business decisions in good faith, after being adequately informed, and they rationally believe that the decision is in the best interest of the company. Specifying such duties also helps to protect the legitimate interests of creditors and other stakeholders and guide directors and managers in taking the necessary step in a timely manner to minimize losses to creditors and avoid depleting the company assets and exposing the creditors to further risk when the company is experiencing financial distress that may lead to its insolvency.
The Commercial Companies Law has been the subject of regular assessment by the authorities over the past few years, resulting in significant enhancements in many areas.
Commenting on this workshop, Dr. Jameel Al Alawi said: “We’re happy to be part of such an event and contribute to a meaningful discussion between legal experts from the public and private sector. It’s important to exchange views with the industry and be aware of the latest updates on laws and regulations around the world and keep up with the latest trends to better improve and enhance business related laws in Bahrain”
