Comparison of Corporate Governance Codes: Norway vs UAE

This article compares the corporate governance codes of Norway and UAE, focusing on their features, code compliance, board structure, remuneration, board committees, board meetings, whistleblowing, transactions with related parties, external auditor, internal control, and other aspects.

CORPORATE GOVERNANCE & ETHICS 0
CORPORATE GOVERNANCE & ETHICS
(student name)
11-11-2018

CORPORATE GOVERNANCE & ETHICS 1
Features Norway Code of CG
(wpstatic.idium.no, 2018) UAE Code of CG (dfm.ae, 2016)
Code
Compliance
“Comply or Explain” principle.
Companies need to comply with code
or they can explain the reason for
choosing an alternative approach.
The compliance officer is appointed
to ensure compliance with provisions
of lay by staff and the decisions and
regulation issued pursuant and to
internal procedures and policies of
companies. Webpage for investor
relation needs by be compliance
regularly with international
standards.
Code System The code system is for private and public
limited companies.
The code system is for public sharing
company
Structure of
BOD
The board structure is unitary for
both public and private limited
liability companies. Each member of
the board needs to be appointed as
director. Chief executive or any
executive personnel cannot be a
board of director’s member
Formation of BOD shall be
determined in articles of
association of the company.
Board of directors is elected by
the general assembly by
cumulative voting secretly. As per
company organizational structure,
the statement of the company’s
director, the positions, details of
salaries, appointment dates and
bonuses to each member or any
compensations are to be
mentioned.
Number of BOD
There are no maximum numbers of
directors, companies can decide on
the minimum or a maximum number
of directors that need to be mentioned
in articles of association. Chairman is
elected as the highest governing
body. The general committee elects
boards of directors.
If the government of the
company’s capital owns five
percent, the same proportion may
be appointed persons to the
number of members of the board
with a minimum of one member.
Remuneration
Remuneration of the board of
directors should not be connected to
the performance of the company and
should not provide the option of
share to board members. Any
remuneration to normal director’s
fees must be identified in the report
annually. Remuneration paid to
chairman must be resolute separately
from other board members. The
remuneration of each member must
Remuneration of members of the
board of directors and chairman is
made up of not more than ten
percent of the net profit of fiscal
year. Remuneration to the
auditors is fixed by the general
assembly. Board of directors is
also held responsible for the
appointment of a permanent
committee that is known as the
remuneration committee, where

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be provided in the annual report.
Board of directors prepares
remuneration of executive personnel,
which is specific, clear, and
understandable.
once a year, the meeting is
conducted.
Board
Committees
Board committees reflect structure
for directing and managing
companies that appreciably under the
Norwegian model. Role of board
committees includes preparing final
decision by the complete board.
Moreover, communicate material
information to all members of the
board.
It is duties of non-executive board
members to participate in board
committees in the organization.
Board Meetings
Board meeting notice is to be
provided in an appropriate manner
and in advance necessarily. Board of
directors deals all annual accounts
and reports of directors are presented
in a board meeting. These accounts
need to be signed by all directors.
The meeting of the board of
directors is conducted four times
in a year; the invitation needs to
be in written form from Board’s
chairman, which is to be sent at
least one week before the
mentioned date.
Whistleblowing The code does not disclose any code
for an aspect of whistleblowing
The code does not disclose any
code for an aspect of
whistleblowing
Level of
Disclosure and
Transparency
The security-trading act is imposed
that restrict notification and
obligations of disclosure on directors
that have shares in listed companies.
Disclosure of remuneration needs to
done in annual accounts.
Disclosure and transparency
policy and its implementation are
according to supervisory
authorities’ requirements and
legislation applicable. This
includes periodic report
disclosure, information to
shareholders, use of the website to
enhance transparency and
disclosure.

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Transactions
with Related
Parties
Related party transaction is a
transaction between the company and
a director under this law. To make
these transactions valid, it is essential
to get this approved by company
general meeting. The director’s duty
also includes, that they do not
participate in resolutions, where a
related party of the director is
considered as a financial interest or
special person in the matter.
A company should not accept any
related party transaction, without
Board of director’s consent, only
in case if the transaction value is
less than five percent of the
capital of the company.
External
Auditor
Auditing and auditors act is
applicable to present a report to the
audit committee on major
characteristics of an audit of the
previous accounting year.
The audit committee establishes
that has a duty to ensure
coordination between internal
control and external auditors
under review of auditor’s
assessment.
Internal Control
The responsibility of sound internal
control and risk management system
is of the board of directors, with
relation to the company’s activity
nature. The internal control system
of companies needs to be at a
minimum, address the company, and
execution of financial reporting of
Board of directors is responsible
for establishing a department of
internal control in order to follow
up the compliance with
regulations, applicable laws,
resolutions, supervisory bodies’
requirements, internal policy,
procedures, and regulation set by

CORPORATE GOVERNANCE & ETHICS 4
companies. Moreover, the board has
to conduct an annual review, where
most important aspect that is exposed
to risk are identified and
arrangements of internal control are
done
the board of directors.
Other CG
Aspects
Many organizations are associated
with this code, some of them are,
Association of Private Pension
Funds, Finance Norway, Norwegian
Institute of Public Accountants, Oslo
Børs, Norwegian Mutual Fund
Association.
This code of corporate
governance has been recently
established in 2016

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References
dfm.ae. (2016). The Chairman of Authority's Board of Directors' Resolution No. (7 R.M) of 2016
Concerning the Standards of Institutional Discipline and Governance of Public
Shareholding Companies. Retrieved from dfm.ae: https://www.dfm.ae/docs/default-
source/Rules/the-chairman-of-authority-s-board-of-directors-resolution-no-(7-r-m)-of-
2016-concerning-the-standards-of-institutional-discipline-and-governance-of-publish-
shareholding-companies.pdf?sfvrsn=2
wpstatic.idium.no. (2018). The norwegian code of practice for corporate governance. Retrieved
from wpstatic.idium.no:
https://wpstatic.idium.no/nues.no/2018/10/NUES_eng_web_okt2018.pdf