Company management rules in Malta are comprised in the Code of Principles of Good Corporate Governance that was designed as a completion to the Companies Act. These principles were created in order enable a better conduct for company management and to enhance the existing regulations. The Code of Good Corporate Governance in Malta is based on the Organization for Economic Cooperation and Development (OECD) regulations.
According to the Companies Law, each company in Malta must have a management board. The key role of the management board is to run and control the company. According to good corporate governance conduct, the directors of a company must enhance a company’s value and always keep in mind the shareholders’ interest. All directors must have an integer conduct and judgment whenever making decisions regarding the company’s activities. According to the Corporate Governance Code, directors must have comprehensive experience and skills in order to manage a company in Malta. The directors of a company must perform their duties prudently and effectively, must be responsible for the decisions they make, must define the company’s goals and must review the management’s performance all the time and make sure it has the necessary human and financial resources to do its job appropriately.
The Code of Principles of Good Corporate Governance provides for the following composition of the management board in a Maltese company:
In the case of companies listed on the Maltese Stock Exchange, the Code recommends a minimum number of non-executive directors in order to ensure a balance in the decision making process.
The management board must:
Non-executive directors are not required to get involved in the day-to-day management of the company. However, their main role is to oversee executive and managing directors and intervene in conflicting situations.
With respect to the legal obligations towards the company, non-executive directors will have the same duties as the managing and the executive ones. Maltese non-executive directors also detach themselves from the other ones through independence, meaning they cannot have any type of business or family relations with the shareholders or the other directors.
The Corporate Governance Code has many provisions regarding the best measures for company management and our lawyers in Malta can provide you all the relevant details. You can also contact us for business registration in Malta.
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