Companies raising capital through public offerings in one or more States parties, or whose securities are listed on the stock exchange of one or more States Parties are required to have a board of directors.
The board of directors of companies referred to in articles 828 to 853 of the Uniform Act of the OHADA Law of 2014 shall be composed of a minimum of three (3) members and a maximum of fifteen (15) members when the company shares are admitted to trading on the stock exchange.
However, in the event of a merger involving one or more companies whose securities are admitted to trading on the stock exchange of one or more “States parties”, the number fifteen (15) may be exceeded the total number of directors in office for more than six (6) months in the merged companies, but shall not exceed twenty (20).
There shall be neither an appointment of new directors nor a replacement of directors who passed away or left office, as long as the number of directors has not been reduced to fifteen (15) when the company shares are admitted to trading at the stock exchange of one or more States parties.
Where a company listed on the stock exchange of one or more States parties has just been removed from the stock markets, the number of directors shall be reduced to twelve (12) as soon as possible.
Within the various limits stipulated above, the number of directors shall be freely determined in the articles of association.
The board of directors of companies referred to in articles 828 to 853 of the Uniform Act is required to have an audit committee.
The audit committee shall be composed exclusively of non-employee directors who do not hold any position of chief executive officer, general manager, or deputy general manager within the company. The board of directors shall ensure that directors appointed members of the audit committee are qualified.
The main duties of the audit committee include:
- examine accounts and ensure the relevance and consistency of accounting methods adopted in the preparation of the company’s consolidated accounts;
- monitor the process of reporting financial information;
- monitor the effectiveness of internal control and risk management systems;
- issue a recommendation on candidates for the post of auditors proposed by the general meeting.
It shall present regular reports to the board of directors on the performance of its duties and raise the flag on any problems encountered without delay.
The chief executive officer, the general manager, the deputy general manager of a company whose shares are admitted to trading at the stock exchange of a State party, and the natural person or legal entities performing the duties of directors in the company are required to, within the time fixed in the second paragraph of this article, to put in the nominative form the shares belonging directly to them, or those that belong to their unemancipated minor children issued by the company itself, its subsidiaries, a company of which it is a subsidiary or by other subsidiaries of the latter company when these shares are listed on the stock exchange of one or several/more States parties.
The time limit provided in the preceding paragraph is one month from the date on which these persons acquire the capacity in which they are subject to the provisions of the preceding paragraph. The time limit shall be twenty (20) days from the date of entry into possession when these persons acquire the shares referred to in the first paragraph of this article.
The same obligation shall apply to permanent representatives of legal entities performing the duties of a director in companies whose shares are admitted to trading at the stock exchange of one or more States parties as well as to non-physically separated spouses of all the people referred to in this article.
Before the meeting of shareholders, companies making public offerings for placement of their securities or whose securities are registered in one or more States parties are required to publish, in newspapers authorized to publish legal notices of the State party of the headquarters location and, where appropriate, of other States parties where public offerings are made, a notice containing, in addition to the information provided for in article 257-1 of the Law, the following information:
1) the agenda of the meeting;
2) the draft resolutions presented to the meeting by the board of directors;
3) the venue where shares shall be delivered;
4) except in the case where the company distributes to shareholders a mail ballot form, the venue (s) and conditions for obtaining these forms.
Notwithstanding the provisions of article 541 of the law, the right to attend general meetings of companies making public offerings is evidenced by the accounting registration of shares on behalf of the shareholder or the intermediary listed on his behalf, on the third business day preceding the meeting at midnight, local time, or in the register of nominative instruments held by the company, or in the bearer security accounts register held by an authorized depository.
The chairman of the board of directors shall present a report to be attached to the report mentioned in articles 525 2) and 547-1 of the law, the composition of the board, the conditions for preparing and organizing the work of the board, as well as internal audit and risk management procedures implemented by the company, by providing details, in particular on the procedures about the preparation and processing of reporting the company accounting and financial information and, where appropriate, of consolidated accounts. Without prejudice to the provisions of articles 487 and 488 of the law, this report shall also disclose potential limitations to the powers of the general manager by the board of directors.
Where a company voluntarily refers to a corporate governance code drafted by business organizations, the report provided in this article shall also identify the provisions that have been rejected and the reasons therefor this. In addition, the report shall also disclose the location where this code can be consulted. Where a company does not refer to such a corporate governance code, this report shall state the rules adopted in addition to legal requirements and shall explain the reasons why the company has decided not to apply any provision of such corporate governance code.
The report provided for in this article shall also specify the special rules relating to the participation of shareholders in the general meeting or refer to the provisions of the articles of association setting out these terms.
The report provided for in this article shall be approved by the board of directors and made public.
The report referred to in the foregoing article shall also present the principles and rules set by the board of directors to determine the remuneration and benefits of any kind extended to company representatives.
This report shall also state the total remuneration and benefits of any kind paid during the fiscal year to company representatives, including in the form of allotment of capital securities, debt securities, or securities giving access to capital or giving the right to allotment of debt securities.
It shall state the amount of the remuneration and benefits of any kind that each of these company representatives has received during the fiscal year.
It shall describe by distinguishing them, fixed, variable and exceptional elements of remuneration and benefits as well as criteria under which they have been calculated or circumstances under which they were established. It shall also state commitments of all kinds, made by the company for the benefit of its representatives, corresponding to elements of remuneration, allowances, or benefits owed or likely to be due owing to the appointment, the removal or change of duties, or subsequent thereof. The information provided in this regard shall specify the procedures for determining these commitments. Except in cases of good faith, payments and commitments made in breach of this paragraph may be canceled.
The report shall also include the list of all the offices held and functions exercised in any company by each of these company representatives during the fiscal year.