The Egyptian Financial Regulatory Authority (FRA) has issued its decision no. (47) of 2020 (the Decision) which addresses all the listed companies in the Egyptian Stock Exchange (EGX), currently 115 companies. In a demarche to align with the best international practices in relation to corporate governance, the FRA has prohibited by virtue of the Decision that a person combines the position of a chairman with the position of the managing director or the CEO of a listed company.
Such prohibition to separate between the executive role carried out by the managing director or the CEO and the supervisory role carried out by the chairman and the rest of the non-executive board members (including independent members). For the sake of enhancing the supervisory environment in the company, limiting the harmful practices, avoiding conflict of interest, and concentrating on long-term goals, which serve the interests of all the company’s shareholders.
All listed companies shall abide to the Decision within one year as of the Decision’s date or during the first elections of the board of directors of the listed company.
This Decision will shed more light on the FRA’s continuous role to enhance the corporate governance rules and assure a appealing investment environment to minority investors’ (shareholders) interests; as recommended in the “Doing Business Report”, a Word Bank’s flagship report published annually and presenting quantitative indicators on business regulations and the protection of property rights that can be compared across 190 economies.