Al Salmi: 

The Executive President of Capital Market Authority confirmed that the approval of a special code for governance of state-owned companies comes as an interpretation of the royal directions of H.M.’s speech on February 23, 2020 regarding improving the business of state-owned companies, improving their performance and raising their efficiency.Moreover, the Code represents a qualitative leap in the organization of businesses of this category of companies, due to the importance of governance in controlling their management and ensuring the link between sustainable development goals and the purposes for which these companies were established. This would lead to achieving comprehensive development and solid sustainable economyby achieving a balance between the state's economic and social objectives, and encouraging the efficient use of human and financial resources, and the available assets, and wouldcreate a framework that organizes and facilitates accountability processes for stakeholders.

H.E. Sheikh Abdullah Al-Salmi explained that the Capital Market Authority has prepared The Code for Corporate Governance for state-owned companies based on Article 20 of the Commercial Companies Law promulgated by Royal Decree No. 18 of 2019, which states; “The Authority shall set the principles regulating governance, to which the shareholding public companies and state-owned companiescomply ... "

H.E indicated that Code preparation followed the usual methodology by CMA in preparing the regulations and laws governing the capital market and insurance sectors, and due tothe importance of these principles of state-owned companies governance, they were formulated in consultation with the relevant entities besides presenting them to the public in a broad societal participation. These principles are based on the concept that the state-owned companies are companies that operate according to commercial and economic principles and are subject to all laws that regulate the work of commercial companies in the Sultanate unless the government specifies other principles. Therefore, the Code comes to stress the importance of stating and reviewing the purpose of these companies. The principles of the Code came to represent the minimum practices that must be followed as a frame of reference in drafting the governance systems for state-owned companies of various legal names. This would help these companies to formulate their internal governance systems to include a series of clear and specific policies, processes and procedures that are consistent with the provisions of this Code provided that these companies are concerned with following up the implementation of the provisions of the Code.

It is worth mentioning that the Code’s drafting relied on a number of basic principles ; as the best practices adopted by the Organization for Economic Cooperation and Development (OECD) were taken into consideration and in line with the legislative and regulatory environment of the Sultanate. H.E.pointed that the principles recommended by the Organization for Economic Cooperation and Development (OECD) emphasize the importance of unifying the ownership of state assets and the state-owned companies under one specialized umbrella that acts as a holding company and has sufficient power to set governance standards for its subsidiaries and the group, and follow up implementation of these standards. As a whole, follow-up and implementation of these standards. In this context, CMA sought to establish principles for corporate governance for state-owned companies where a general national framework that represents the minimum ofgovernance practices on which some entities such as the Oman Investment Authority will rely on. Oman Investment authority as a sovereign investment entity that enjoy broad powers and specializations would use this framework in setting its own standards for companies under its management consistent with these principles.

Speaking about the most prominent features of the Code, Al-Salmi indicated that state-owned companies will be obligated to disclose their unaudited quarterly or annual audited financial statements to the public through the company's website or through the electronic publishing platform that the CMA will approve for disclosure purposes. H.E. explained that the issue of transparency and disclosure is one of the fundamentals in the implementation of corporate governance due to its importance in enhancing levels of integrity and in highlighting the financial position of companies in a way that contributes to obtaining facilities and contracts from the relevant parties.

It is worth mentioning that the Code includes eleven principles of good governance, where the first principle is formed on the basis that the state-owned companies are commercial companies, and they must operate according to commercial and economic principles and are subject to all laws that regulate the work of commercial companies in the Sultanate. The second principle clarifies that a government company must have an effective regulatory and legal framework, and that it should be applied with care and diligence. While the third principle indicates that the government is considered an owner and a shareholder in the company and has the right to act according to this principle. The other principles clarifies many details regarding formulation of Boards of Directors, their responsibilities, specializations and authorizations. They also clarify the framework that organizes the accountability processes of members of Boards of Directors, the Code of Professional Conduct for board members, and the equal treatment of shareholders other than the government. They also include other regulatory provisions governing the transactions of related and interested parties, and other clauses that define the roles and powers of the executive management. The last principle came to define how to deal with social responsibility for this category of companies.