SOEs directors: Framework for appointment, evaluation, disclosure tightened

Business Recorder reported that the government has tightened the rules on appointing, evaluating and disclosing interests of directors at state-owned enterprises (SOEs). Under updated guidelines issued by the Finance Division's Central Monitoring Unit (CMU), boards must explain which skills a new member needs and carry out yearly performance reviews and interest disclosures.

When an independent director seat falls vacant at a board, the board must promptly send the Board Nominations Committee (BNC) its view on the skills already present and those still needed. Boards nearing the end of their term must file a performance report with the BNC at least three months ahead, covering targets, failures and skill gaps. Each vacancy requires at least three candidates, and the BNC will conduct its own assessment if a board fails to provide timely skills recommendations.

Conflict-of-interest rules have also been tightened: every SOE must keep a register of interests, and conflicted directors must abstain from discussion and voting and cannot count toward quorum. Boards and individual directors will be evaluated each year, at the end of tenure or on resignation, with results shared with the CMU's central database. Newly appointed directors without a completed Directors Training Programme must finish it within three months.