Corporate Governance: Mitigating Strategic Risks

The Egyptian Code of Corporate Governance serves as the benchmark for ethical and transparent management. While voluntary for some, its principles are increasingly enforced through FRA regulations and Stock Exchange listing rules.

Executive Liability

Directors in Egypt can be held personally and jointly liable for damages resulting from fraud, negligence, or non-compliance with the company's articles of association. Risk mitigation involves the rigorous documentation of board resolutions and the establishment of clear audit committees.

Procedural Clarity

The distinction between the board’s role and the General Manager’s powers must be clearly codified. Overlap in authority often leads to legal exposure when contracts are signed by individuals without valid "Power of Attorney" (Tawkeel) or board authorization.

Misconceptions on Compliance

A frequent error is assuming that annual filings at GAFI constitute complete compliance. True governance involves managing the internal conflict of interest registers and ensuring that related-party transactions are properly disclosed and approved.