Muscat: Oman’s market watchdog Capital Market Authority (CMA) clarified that video conferencing facility will be allowed for board meetings of listed firms, if majority of directors are physically present and only few of them attend through video conferencing.
“A meeting where a majority of directors are present in person and few directors participate by video conference would not be counted for the maximum permitted video conference meeting,” CMA said in a circular.
This is part of clarification issued by the market regulator on the recently announced code of corporate after receiving several question from listed companies.
The maximum permitted limit of two board meeting by video conferencing per annum is applicable only to the board meetings when entire board or majority of board members meets through video conference. Board meeting by telephone conference is not allowed.
Corporate governance is a set of rules to ensure that the listed firm is governed in the most possible fair and ethical manner in an apparent move to protect the interest of all stakeholders.
An internal auditor can be secretary to the board of directors, but a chief financial officer cannot become secretary to the board. Also, the role of a board secretary may be outsourced if the company does not have enough human resource due to small size, noted the CMA.
Another important clarification is that two listed companies cannot have same person as board secretary. A director in a subsidiary company cannot be considered as an independent director in a parent company board.
Also, the owner of an entity or a person who is a major supplier of the company cannot be appointed as independent director even if he does not hold any shares of the company.
Another decision is that each and every sales or purchase transaction with related party does not need to be approved by the board and annual general meeting. The company should get a total amount pre-approved at the annual general meeting (AGM) at the beginning of the year and all related party procurement or sales should be within that maximum limit.
Also, board must formulate and approve the rules for passing resolution by circulation.