New CMA Governance Code of Oman by Derek Hendrikz covers Corporate Governance in Oman, CMA, capital market authority in Oman, Muscat Securities Market, MSM, changes in the governance code of Oman, nominations and remuneration committee,

1. Code of Corporate
Governance
Issued by the Capital Market
Authority (CMA) in Oman
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2. Effective from July 2016 and
applicable to all public companies
listed in the MSM
(Muscat Securities Market).
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3. Changes introduced by the code…
1. All board members should be Non-Executive Directors (NED’s);
2. Formation of a ‘Nomination and Remuneration’ committee;
3. The general meeting has the authority to remove one or all board
members;
4. The chairperson of the audit committee cannot be a member of any
other board sub-committee;
5. The chairperson of a board committee or sub-committee cannot be
the chairperson of any other board sub-committee (e.g. the chair of
risk committee cannot be chair of investment committee).
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4. Changes introduced by the code (cont.)…
6. The secretary of the board cannot be a EXCO member or
senior manager and should have a legal, accounting, auditing
or secretarial background;
7. The audit committee will directly appoint an external auditor
(not through the CFO, CEO, etc.)
8. Auditors can now report any suspected material fraud
directly to respective regulators, such as CMA, CBO, AER,
TRA) without an approval from the company’s board.
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5. Changes introduced by the code (cont.)…
9. Comprehensive definition of independent director included;
10. Audit committee chair and committee members must be independent
• No relationship with the company, parent company, subsidiaries or
associates;
• May not hold 10% shares or more or represent a juristic person who owns
10% shares or more;
• May not be a employee or senior executive during past two years or first
degree relative to any senior executive director or first degree relative to
any of the directors.
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6. Changes introduced by the code (cont.)…
11. An independent director should notify the board within 30
days when any of the aforesaid conditions are applicable to
him due to change in circumstances and provide annual
confirmation of being independent to the board;
12. Only up to two board meetings a year by video conference;
13. Board to approve a formal succession plan for executive
management and CEO of a listed company
14. EXCO cannot hold the same position at subsidiaries.
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7. Nomination and Remuneration
Committee
1. Comprises of board members;
2. Must assist in appointment and
remuneration of executive management;
3. Must ensure that the boards performance is
measured by a third party (other than
external or internal auditors).
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8. What did not change…
1. Restriction on board remuneration not changed (lower
of RO 200,000 or five per cent of net profit);
2. No changes affecting internal audit (e.g. no requirement
for Quality Assurance Review of internal audit, as
required by the Institute of Internal Auditors).
3. No requirements for Directors’ Liability insurance and
code of conduct for directors (to be developed by each
company).
Derek Hendrikz Consulting

9. Boards will now have to consider the
following questions…
1. What should the required code of
conduct for Directors include?
2. What criteria will the third party use to
assess Board performance?
Derek Hendrikz Consulting