What the 2023 Companies Law asks of your board

Who it applies to

The Companies Law covers every company form in the Kingdom: joint-stock companies, limited liability companies and the newer simplified joint-stock company. Most of what follows is written for joint-stock companies, which is where the law is most specific about the board. A limited liability company has a lighter frame, but a family holding that has grown into several companies usually has at least one board that the stricter rules reach.

Meet at least four times a year

A joint-stock company’s board must meet at least four times in a financial year. In practice that means a calendar agreed before the year starts, with the meetings spaced so that the accounts, the budget and the general assembly fall where they should. A board that meets in a rush in December to make up the count has met the letter of the rule and little else.

Minutes signed by the people who were there

Minutes are signed by the chair, the secretary and the members who attended. Until they are signed they are a draft; after they are signed they are the record. The gap between the two is where most disputes about “what the board decided” begin. The habit worth building is a short cycle: draft within days, circulate, sign, lock.

Decide between meetings when you must

The law allows the board to pass resolutions by circulation, without meeting, where the articles permit it. A written resolution needs the same care as a vote in the room: a clear text, a deadline, each member’s answer recorded, and any objection kept with the resolution rather than lost in a reply-all.

Declare an interest and step out of the vote

A director with a direct or indirect interest in a matter before the board must disclose it, and must not take part in the vote on it. The disclosure belongs in the minutes, and the related-party transaction belongs in front of the assembly where the law requires. A register of interests kept alongside the agenda makes this routine rather than awkward.

Assemblies that members can attend from anywhere

General assemblies may be held with electronic attendance and voting. For a family with shareholders in three cities, this is the difference between a quorum and a postponed meeting. Votes are weighted by shares, and the count has to be shown, not asserted.

A family charter the law recognises

For family companies, the 2023 law gives the family charter legal standing: a document agreed by the family that governs ownership, succession, employment of family members and how disputes are settled. It is the first time Saudi law has named the charter directly, and it is covered in its own guide.

If you are listed

A listed company also answers to the Capital Market Authority’s corporate governance regulations, which add committees, an internal audit function and disclosure duties on top of the Companies Law. On Nomu the obligations are lighter, but a company planning to move up to the main market is judged on the record it has already kept.

In Govuno

The chair’s overview counts board meetings against the minimum for the year. Minutes go through a signature round and then lock. Written resolutions have a deadline and keep every objection. A conflict is declared on the agenda item, the director is left out of that vote, and the declaration goes into the register. Assemblies run with quorum and share-weighted votes. The family charter has versions, an assembly vote and a confirmation from every family member.