{"id":131716,"date":"2026-03-06T11:53:44","date_gmt":"2026-03-06T11:53:44","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=131716"},"modified":"2026-03-06T11:53:44","modified_gmt":"2026-03-06T11:53:44","slug":"egypt-corporate-governance","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/egypt-corporate-governance\/","title":{"rendered":"Egypt: Corporate Governance"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-131716","comparative_guide","type-comparative_guide","status-publish","hentry","guides-corporate-governance","jurisdictions-egypt"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Khodeir &amp; Partners<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/03\/Khodeir-Partners-Logo.jpeg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Khodeir &amp; Partners<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/03\/Khodeir-Partners-Logo.jpeg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Corporate Governance laws and regulations applicable in Egypt<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the most common types of corporate business entity and what are the main structural differences between them?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The most common corporate structures are:<\/p>\n<p><strong>1.1. Joint Stock Company (\u201cJSC\u201d)<\/strong><\/p>\n<p>A JSC is a company with capital divided into equal value shares. The liability of shareholders is limited to their contributions to the share capital.<\/p>\n<p>Key features of JSC:<\/p>\n<ul>\n<li>At least three founders are required.<\/li>\n<li>It could be either public or closed.<\/li>\n<li>Minimum capital:<br \/>\n&#8211; Public JSC: 500,000 EGP (Five Hundred Thousand Egyptian Pounds).<br \/>\n&#8211; closed JSC: 250,000 EGP (Two Hundred Fifty Thousand Egyptian Pounds).<\/li>\n<li>Capital is divided into shares, each share with a nominal value at least 1 EGP and shall not exceed 1,000 EGP.<\/li>\n<\/ul>\n<p><strong>1.2. Limited Liability Company (LLC)<\/strong><\/p>\n<p>a flexible form of companies, in which the liability of partners is limited to their contributions to share capital.<\/p>\n<p>Key features of an LLC:<\/p>\n<ul>\n<li>From 2 up to 50 partners.<\/li>\n<li>No minimum capital is required.<\/li>\n<li>Nontransferable shares.<\/li>\n<li>Transfers of ownership require written approved consent by the partners.<\/li>\n<li>The purpose of the company may be incorporated in its title together with one or more partner\u2019s names.<\/li>\n<\/ul>\n<p>The capital of LLC is divided into quotas of equal value.<\/p>\n<p><strong>1.3. One Person Company (\u201cOPC\u201d)<\/strong><\/p>\n<p>Each individual or legal person may incorporate a company in accordance with the provisions of Companies Law.<\/p>\n<p>Key features of the OPC:<\/p>\n<ul>\n<li>It consists of only 1 shareholder.<\/li>\n<li>The minimum capital required is 1000 EGP.<\/li>\n<li>The capital shall be due in advance within the incorporation procedures<\/li>\n<li>The terms &amp; provisions of the LLC are applied to the OPC company.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the current key topical legal issues, developments, trends and challenges in corporate governance in this jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A recent trend in Corporate Governance is the digitalization of the services of the General Authority for Investment and Free Zones (GAFI). As of the first quarter of 2025, GAFI has started rolling out Egypt\u2019s digital transformation agenda through the rollout of integrated online investment services. Through this portal, investors can establish companies, apply for licenses and regulatory approvals, submit statutory filings, obtain the Investment Gazette of the company through QR code instead of obtaining a hardcopy and track application status entirely online without physical attendance. The system consolidates services from multiple government entities into a platform, incorporates electronic payment and digital signature functionality.<\/p>\n<p>Complementing these services is Egypt\u2019s Unified Digital Verification Platform (di.gov.eg), a national digital identity platform that enables secure authentication and single sign-on access to government platforms. By linking verified digital identities to investment and licensing procedures, this integration makes governance much more streamlined.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Who are the key persons involved in the management of each type of entity?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>JSC and LLC have different frameworks within management roles and authorities according to Companies Law.<\/p>\n<p><strong>a. JSC<\/strong><\/p>\n<ul>\n<li>JSCs are governed by the shareholders of the company and the BoD.<\/li>\n<li>Shareholders elect the company\u2019s BoD.<\/li>\n<li>The BoD manages the company\u2019s daily business.<\/li>\n<li>Major decisions are approved and ratified by the General Assembly of the shareholders.<\/li>\n<\/ul>\n<p><strong>b. LLC<\/strong><\/p>\n<ul>\n<li>LLCs are managed by partners, and the partners may elect managers for the business operations.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are responsibility and management power divided between the entity\u2019s management and its economic owners? How are decisions or approvals of the owners made or given (e.g. at a meeting or in writing)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The management divided between the shareholders and the Board of Directors.<\/p>\n<p>The shareholders exercise their powers through general assembly meeting, whiles the BoD exercise their powers through BoD meetings.<\/p>\n<p>The decisions or approvals are taken or given by the shareholders and the BoD of the company in the meeting or electronically through E-Magles.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the principal sources of corporate governance requirements and practices? Are entities required to comply with a specific code of corporate governance?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The primary legislative sources governing corporate governance in Egypt include:<\/p>\n<ul>\n<li>Companies Law promulgated by law No. 159 of 1981<\/li>\n<li>Capital Market Law promulgated by law No. 95 of 1992<\/li>\n<li>Investment Law promulgated by law No.72 of 2017<\/li>\n<li>Executive Regulations and Decrees.<\/li>\n<\/ul>\n<p>However, the Egyptian Institute of Directors (\u201cEIOD\u201d), which is a subdivision of the Financial Regulatory Authority (\u201d FRA\u201d) plays a vital role in promoting and guiding companies on principles of corporate governance. In an effort to promote corporate governance EIOD issued the Egyptian corporate governance code which is a general guiding framework that encompasses a set of rules of corporate governance based on international and regional best practices issued by the Egyptian Institute of Directors, which is a subdivision of the FRA. In addition, the Regulations Book issued by the Central Bank of Egypt (\u201cCBE\u201d) which outline the fundamental principles of corporate governance to ensure compliance, accountability, and fairness among the shareholders of the companies.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is the board or other governing body constituted? Does the entity have more than one?  How is responsibility for day-to-day management or oversight allocated?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Companies Law regulates the composition of the board of directors, granting shareholders the right to appoint board members and executives provided that they shall comply with all the legal requirements of the board members.<\/p>\n<p>The board may be composed of members representing a shareholder or independent individuals with no ties to the shareholders.<\/p>\n<p>The entity cannot have more than one board at the same time.<\/p>\n<p><strong>BoD Responsibilities:<\/strong><\/p>\n<p>Core Duties<\/p>\n<p>The BoD is responsible for:<\/p>\n<ul>\n<li>Ensuring compliance with laws and internal regulations.<\/li>\n<li>Approving financial statements.<\/li>\n<li>Overseeing risk management.<\/li>\n<li>Implementing succession plans.<\/li>\n<li>Consulting with management on company matters.<\/li>\n<li>Delegating authority and overseeing the results from committees and executive management.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are the members of the board appointed and removed? What influence do the entity\u2019s owners have over this?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The board of directors is appointed and removed by the general assembly. The law allows for unlimited renewal of board terms unless there is a limitation of periods stated in the company\u2019s articles of association.<\/p>\n<p>The entity\u2019s owners (shareholders) have significant role in appointing the BoD or the managers of the LLC.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Who typically serves on the board? Are there requirements that govern board composition or impose qualifications for board members regarding independence, diversity, tenure or succession?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The law sets the standards and requirements of board members. Anyone convicted of a criminal offense related to credibility and financial integrity is not eligible to serve on the board of directors.<\/p>\n<p>The law grants the shareholders full discretion in selecting the most competent and trustworthy individuals to manage the company.<\/p>\n<p>In certain types of companies, the law requires some diversity in the board composition requiring at least two female members or a minimum of 25% female representation, minimum number of years of experience for the managing director, or a legal expert as a board member.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the role of the board with respect to setting and changing strategy?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Board of Directors serves as the cornerstone in guiding the company, acting both as the mastermind that formulates plans and strategies and as the executive authority responsible for their implementation to achieve the organization\u2019s objectives. It is entrusted with broad managerial powers, enabling it to make critical decisions that drive growth and sustainability in alignment with the company\u2019s purpose.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are members of the board compensated? Is their remuneration regulated in any way?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally, the BoD does not receive salaries except for the executive members who may receives salary.<\/p>\n<p><strong>Compensation Regulations<\/strong><\/p>\n<ul>\n<li>Board remuneration is capped at 10% of net profit.<\/li>\n<li>Attendance allowances for meetings are permitted.<\/li>\n<li>Executive members (i.e. the managing director) might receive salaries for the executive role.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do members of the board owe any fiduciary or special duties and, if so, to whom? What are the potential consequences of breaching any such duties?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are indemnities and\/or insurance permitted to cover board members\u2019 potential personal liability? If permitted, are such protections typical or rare?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Egyptian Law permits professional indemnity insurance of BoD members. However, this practice is not widely spread.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How (and by whom) are board members typically overseen and evaluated?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The General Assembly oversees the performance of the Board of Directors (BoD) by electing, dismissing, and assessing board members based on their fiduciary responsibilities. It also examines financial statements and annual reports to ensure transparency and accountability.<\/p>\n<p>Egyptian law mandates the appointment of an independent external auditor, who directly reports to the General Assembly, providing an independent assessment of the company\u2019s financial situation and regulatory compliance. The FRA enforces transparency in the listed companies by requiring specific time for the disclosure of financial and operational information.<\/p>\n<p>To strengthen corporate governance, companies establish internal committees such as:<\/p>\n<ul>\n<li>Audit Committee \u2013 Monitors financial reporting, risk management, and legal compliance.<\/li>\n<li>Nomination Committee \u2013 Evaluates board performance and recommends qualified candidates.<\/li>\n<\/ul>\n<p>Additionally, GAFI ensures companies comply with corporate laws and regulations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the board required to engage actively with the entity\u2019s economic owners? If so, how does it do this and report on its actions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The BoD communicates with shareholders at least once per year through the OGM, where it presents its annual report, financial statements, and the auditor\u2019s report.<\/p>\n<p>Certain major decisions beyond the board\u2019s authority require shareholder approval through an EGM to address significant company matters.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are dual-class and multi-class capital structures permitted? If so, how common are they?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Egyptian companies can issue different classes of shares with various rights and privileges. The most common types include:<\/p>\n<ul>\n<li><strong>Ordinary Shares:<\/strong> Provide voting rights and dividends, typically preferred by investors.<\/li>\n<li><strong>Preferred Shares:<\/strong> Offer fixed dividends and priority in liquidation but usually lack voting rights.<\/li>\n<li><strong>Enjoyment Shares:<\/strong> Used in industries involving natural resource exploitation, granting financial benefits without full ownership rights.<\/li>\n<\/ul>\n<p>Egyptian law allows dual-class and multi-class structures, but they are rarely used. Most companies issue ordinary shares to ensure equal voting rights and transparency in corporate governance.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What financial and non-financial information must an entity disclose to the public? How does it do this?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Listed joint stock companies have a fundamental obligation to disclose both financial and non-financial information to the public for certain transparency purposes. This transparency helps investors and stakeholders in taking decisions.<\/p>\n<p><strong>a. Financial Information Disclosures:<\/strong><\/p>\n<p>Any listed company shall provide FRA with semi-annual reports of the company\u2019s activity and progress, the actual financial position of the company, its balance sheet, financial statements and an adequate summary of the BOD report, such documents shall be published on EGX screens and the company\u2019s website at least 21 days prior to the convening of the general assembly.<\/p>\n<p><strong>b. Resolutions Publication:<\/strong><\/p>\n<p>Listed companies shall provide the FRA and EGX with its OGMs and EGMs resolutions, the company shall provide EGX with a summary of its BODs resolutions that contain substantial circumstances, EGX shall immediately publish such resolutions on its screens and website.<\/p>\n<p><strong>c. Public Disclosure of Material changes and substantial circumstances:<\/strong><\/p>\n<p>Listed companies shall provide EGX with information that contains any substantial circumstances that significantly impact on its activity, its financial position, tradable prices, or affects investor decisions, or influences market trading trends, which shall be published by EGX on its screens. such circumstances including, inter alia the following:<\/p>\n<p>a) Proposed new bond issuances and any related guarantees or liens.<\/p>\n<p>b) Decisions resulting in the calling or cancellation of previously issued registered securities.<\/p>\n<p>c) Proposed change in the financing or capital structure exceeding 5% of shareholders&#8217; equity based on the latest periodic financial statements.<\/p>\n<p>d) Contracts valued at more than 5% of the revenues of the previous financial year.<\/p>\n<p>e) Cash distributions or distributions of free shares.<\/p>\n<p>f) Modifications of the nominal value of the company&#8217;s shares.<\/p>\n<p>g) Proposed agreements resulting in strategic investors purchasing a stake in the company&#8217;s shares.<\/p>\n<p>h) The filing of lawsuits or arbitration against the company or any judgments related to its activities or any of its investments or other owned assets exceeding (2%) of the company&#8217;s equity according to the latest approved financial statements (annually or quarterly), which may influence trading prices or the investment decisions of the traders.<\/p>\n<p>i) The filing of lawsuits against any member of the company&#8217;s board of directors or any of its executives concerning matters related to the company and associated with alleged violations by any of them.<\/p>\n<p>j) Governmental decisions affecting the company&#8217;s activities and any amendments or cancellations of such decisions.<\/p>\n<p>k) Commercial transactions with related parties.<\/p>\n<p>l) Amendments to the disclosures previously attached to listing applications or changes in the data or the information contained in the disclosure report for the purpose of listing on the EGX or the public offering, adhering to Capital Market Law provisions against price manipulation and insider trading.<\/p>\n<p>m) Judicial judgments imposing a custodial penalty against any member of the board of directors or any of its key officials.<\/p>\n<p>Moreover, the company must ensure, in its disclosures, that any data, facts, or information are accurate, complete and sufficient. Disclosures must be clear and not misleading, supported by appropriate documentation, and must not omit or conceal any information that could materially affect the disclosed data or information.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can an entity\u2019s economic owners propose matters for a vote or call a special meeting? If so, what is the procedure?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, the shareholders may propose matters for a vote through an ordinary meeting or extraordinary meeting. The OGM is called upon by at least 5% of the economic owner\u2019s capital in the company. While the EGM is called upon by at least 10% of the company\u2019s capital. The Procedures includes several steps:<\/p>\n<ul>\n<li><strong>Submission of Request:<\/strong> Shareholders must provide a bank certificate confirming the deposit of shares and commit to not withdrawing them until the EGM concludes.<\/li>\n<li><strong>Formal Communication:<\/strong> The request must be submitted via registered letter with acknowledgment of receipt or delivered directly to the company&#8217;s headquarters in exchange for a receipt<\/li>\n<li><strong>Content of the Request:<\/strong> The request must outline the reasons for calling the EGM and the matters to be discussed, along with evidence of share deposits.<\/li>\n<li><strong>Shareholding Structure:<\/strong> The shareholding composition of the requested Shareholders must be included in the request.<\/li>\n<li><strong>Failure to Convene:<\/strong> If the BOD does not convene within one (1) month of receiving the request, the Shareholders may escalate the matter to the General Authority for Investment and Free Zones (\u201cGAFI\u201d), which will then be responsible for calling the meeting.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What rights do investors have to take enforcement action against an entity and\/or the members of its board?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Shareholders and stakeholders have various courses of action to be taken against a company or its board, i.e. i- Filling Complaints for supervision and inspection before GAFI or the FRA, depending upon competences; ii- Requesting to Review Company Documents; iii- Shareholders\u2019 right to request Inspection of BoD Activities.<\/p>\n<p>In this respect, the shareholders may file complaints related to non-compliance with governance requirements and financial irregularities. Further, the shareholders may file a complaint before the relevant authority against the activities of the BoD. Additionally, the shareholders or stakeholders may request to review the company\u2019s documents, records, minutes, and reports. This access to documents enables them to ensure that the company complies with the provisions of Companies Law, fostering transparency and accountability.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is shareholder activism common? If so, what are the recent trends? How can shareholders exert influence on a corporate entity\u2019s management?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The concept of activist shareholder is relatively uncommon in Egypt. while the Egyptian law does not explicitly prohibit the activist shareholders, its\u2019 practical application is limited as it may be applied in certain cases through employees\u2019 stock owners and some other exceptional cases by shareholders. However, it does not qualify to be customary practice within the corporate landscape.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are shareholder meetings required to be held annually, or at any other specified time? What information needs to be presented at a shareholder meeting?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Annual General Meeting (\u201cOGM\u201d) is a mandatory yearly meeting of shareholders. the general assembly of Shareholders shall be convened by the invitation of the Chairman of the board of directors (\u201cBOD\u201d) at the time and place specified in the company&#8217;s Articles of Associations (\u201cAoA\u201d). The OGM shall be held at least once a year, within the first three (3) months following the end of the company&#8217;s fiscal year. Also, the BOD may decide to call for an OGM whenever necessary. During the OGM, Shareholders review the company&#8217;s performance and vote on critical issues, such as:<\/p>\n<ul>\n<li>Election and dismissal of the BOD;<\/li>\n<li>Monitoring BOD activities and considering their discharge from liability;<\/li>\n<li>Approval of the budget, profit, and loss statements;<\/li>\n<li>Full Financial statements of the company;<\/li>\n<li>The Auditor Report;<\/li>\n<li>The BoD Report;<\/li>\n<li>Distribution of dividends; and<\/li>\n<li>Any matters deemed necessary by the BOD, relevant authorities, or Shareholders holding at least 5% of the company&#8217;s capital.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any organisations that provide voting recommendations, or otherwise advise or influence investors on whether and how to vote (whether generally in the market or with respect to a particular entity)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Egypt currently lacks organizations specializing in advising investors and shareholders on voting recommendations and decision-making process. Nevertheless, the governmental entities (i.e GAFI and FRA) publish periodicals awareness materials that inform shareholders about voting rights and the mechanism involved.<\/p>\n<p>In Addition, Business Advisors and Law Firms in Egypt offer technical assistance to investors in certain limited cases leveraging their technical expertise. Law firms play a pivotal role in guiding and influencing investors through the decision-making process ensuring compliance with corporate governance regulations by providing valuable insights into potential legal risks associated with decisions that may violate applicable laws and regulations post decision-making processes, thereby supporting a more informed and compliant investment environment.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What role do other stakeholders, including debt-holders, employees and other workers, suppliers, customers, regulators, the government and communities typically play in the corporate governance of a corporate entity?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Stakeholders play a significant role in the corporate governance of the company, influencing decisions in various ways. For instance, debt holders can share in the voting rights of shareholders when shares are pledged. In such cases, the pledgor and the lender often reach agreements regarding matters that the lender may decide, allowing debt holders to participate indirectly in the corporate governance of the company.<\/p>\n<p>In addition, the Egyptian Companies Law and its Executive Regulations set forth specific mechanisms for employee participation in the management of joint-stock companies, which must be included in the company&#8217;s Articles of Association. These mechanisms are as follows:<\/p>\n<p><strong>Method One: Employee Representation on the Board of Directors<\/strong><\/p>\n<p>The AoA may allow for employee representation on the board of directors, which must specify the number of employee representatives and their selection process. The number of employee representatives must not exceed one-third of the total board members, and they must be elected by the company&#8217;s employees rather than by shareholders or the board. Employees\u2019 representatives must also have the same qualifications as other board members.<\/p>\n<p><strong>Method Two: Employee Participation via Labor Shares<\/strong><\/p>\n<p>Companies may issue labor shares that are collectively owned by the employees of the company, providing a mechanism for employee participation in management. This method must be clearly stipulated in the company&#8217;s Articles of Association.<\/p>\n<p><strong>Method Three: Formation of an Auxiliary Administrative Committee<\/strong><\/p>\n<p>The Articles of Association of the company may also provide for the establishment of an auxiliary administrative committee, comprising employee representatives. This committee, formed at the discretion of the board, meets at least once every two months. The chairman, elected from among its members, attends board meetings of the company and vote in the meeting. The committee&#8217;s responsibilities include examining employee-related matters, wage and salary plans, and other issues referred to by the board of the company. Additionally, it prepares an annual report outlining its recommendations and findings, thereby reinforcing transparency and integrating employee perspectives into the decision-making process.<\/p>\n<p>The suppliers, customers have no rule in the corporate governance of a corporate entity.<\/p>\n<p><em><strong>\u2022 Government Participation in Corporate Governance<\/strong><\/em><\/p>\n<p>The FRA periodically issues decrees that regulate corporate governance for specific sectors. Such as decree No. 101 of 2015, which addresses governance rules for private insurance funds, and decree No. 100 of 2020, which regulate governance rules for non-banking financial services. These regulations establish fundamental principles, as follows:<\/p>\n<ul>\n<li><strong>Good governance principles:<\/strong> defining fundamental principles of good governance of the company.<\/li>\n<li><strong>General assembly procedures:<\/strong> outlining the process of convening general assembly meetings and determining decision-making framework.<\/li>\n<li><strong>BoD:<\/strong> defining the criteria for selecting the board members and specifying their powers and responsibilities.<\/li>\n<li><strong>Auditor appointment methods:<\/strong> regulating the criteria for appointing the company\u2019s auditor.<\/li>\n<li><strong>Conflict of interest rules:<\/strong> identifying potential conflict of interest situations and specifying the procedures to mitigate them.<\/li>\n<li><strong>Disclosure and transparency:<\/strong> Defining the information that must be disclosed and outlining the methods for disclosure.<\/li>\n<li><strong>Administrative committees:<\/strong> regulating the formation of administrative committees of the company and specifying their powers and responsibilities.<\/li>\n<li><strong>Internal Control Framework:<\/strong> outlining the procedures necessary to ensure detecting and mitigating risks.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are the interests of non-shareholder stakeholders factored into the decisions of the governing body of a corporate entity?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Corporate decisions, specifically profit distribution, consider the interests of non-shareholder stakeholders like employees. The Companies Law outlines how profits are allocated after the general assembly approves the financial statements, ensuring employees receive fair compensation. The Executive Regulation of Companies Law mandates that at least 10% of distributable net profit shall be allocated to employees, not exceeding their total annual wages. Company\u2019s Internal regulations may allow for a higher share, but any amount above 10% must be placed in a special fund for employees\u2019 benefits, which could be used in years without profits.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What consideration is typically given to ESG issues by corporate entities? What are the key legal obligations with respect to ESG matters?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Companies generally give due consideration to ESG issues within the limits of legal requirements. However, there are minorities to give higher consideration to ESG issues.<\/p>\n<p>In light of Egypt\u2019s Sustainable Development Strategy of 2030, Egypt has strived to promote and safeguard ESG issues attempting to reach international standards. By way of example, the constitution safeguards the &#8216;Right to a Healthy Environment&#8217;, a principle that is clearly implemented under the Environmental Law.<\/p>\n<p>In addition, governing bodies have issued decrees and guidelines that clearly protect and promote for ESG issues. In this respect, the FRA by virtue of decrees No.107 of 2021 and No.108 of 2021 mandates ESG disclosures for companies listed on the Egyptian Stock Exchange as well as companies operating in non-banking financial activities whose issued capital or net ownership rights are not less than 100 million Egyptian pounds.<\/p>\n<p>Further, GAFI\u2019s release of the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, set out the foundation for proper business practices, human rights, environmental protection, labor standards and anti-corruption mechanisms. In this release GAFI strived to align its initiatives with the UN&#8217;s Sustainable Development Goals as well as Egypt\u2019s Sustainable Development Strategy of 2030.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What stewardship, disclosure and other responsibilities do investors have with regard to the corporate governance of an entity in which they are invested or their level of investment or interest in the entity?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The law does not specifically regulate disclosures regarding an investor\u2019s involvement in corporate governance, level of investment in a company or interest in such. On another note, investors are not legally responsible to participate in corporate governance but rather have the right to do so through active participation and voting in OGMs and EGMs.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the current perspectives in this jurisdiction regarding short-term investment objectives in contrast with the promotion of sustainable longer-term value creation?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In practice, Egyptian Companies Law and corporate governance frameworks lean towards long term value creation. This is manifested in the keenness to maintain international corporate governance standards promoting ESG and CSR and the due consideration given to the protection of various stakeholders such as employees, creditors and the society. Long term value creation as a goal is clearly manifested in the standard term of a company set in standard AoAs available at GAFI which states that an initial term of a company is 25 years, which shall be extended by virtue of an EGM decision of a company.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">4336<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/131716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=131716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}