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Hue Mi
03-06-2013, 07:22 PM
The powers of the General Assemblies of the companies (http://alhayat.com/OpinionsDetails/488136)

Ziad Dabbas *
Saturday March 2, 2013

During this period of each year, the annual general assemblies of public shareholding companies. Either source the importance and strength, they are the big powers of the assemblies as the highest authority in the organization structure of the corporations. Comes in by these powers, absolve the boards (or acquitted) for their actions during the previous year, and dismissal of the President or members of the Board or each if they failed to maintain the rights of shareholders and achieve a good return on their investment.

Also, for the General Assembly to appoint auditors and to isolate them. Notes that the past four years saw the overthrow of a large number of heads heads of boards of public joint stock companies and its members, both in the region and globally, through general assemblies of the companies after studies found most companies back in the form of the failure of the departments and not to the fallout of the global financial crisis.

Competent departments have initiated that are the backbone of any public company and with high professionalism and a clear strategic vision and experience, to change and revision strategies, with the beginning of the global financial crisis, commensurate with the financial and economic developments and investment politics, whether regional or global, as appropriate and change the courses of Economics and various sectors.

It also focused on risk management, reduce costs and manage liquidity and asset disposal living fair premium, and on other steps that keeps the company's strength and good performance and power flows and financial solvency, and preserve the rights of shareholders and the value of its shares in the market.

Interestingly, many of the companies listed in some markets in the region, is still exposed to loss or decline in profits for the fourth consecutive year, resulting in the loss of shareholders a significant proportion of their wealth and their investments, without taking any action against directors or management boards.

The reason is in the form of the basis to the President of the Council and its members, an important share of equity or their delegates from the shareholders to vote on their behalf at the annual general assemblies, and eventually do away with the important decisions taken during the assemblies.

In contrast to the failure of small shareholders, or so-called minority voting strength as a result of a decline in the number of shares they own in the company, when taking any decision in this regard to dismissal or acquittal or not accounting Board of Directors and the Executive Management on their work during the year.

Here comes the role of corporate control services and securities commissions take action and develop appropriate mechanisms to safeguard the rights of all shareholders, including those who do not have large stakes in these companies.

It has ignored their claims during the annual general assemblies in previous years by the Board of Directors, the absence of most of these meetings and limiting them to the members of the Governing Council and from there, so their cases that conservation law and notably invited to attend assemblies and annual management discussion and the Board on all matters relating to the work of companies during the year.

It should be pointed out in this respect, that certain securities, central banks in the region, requiring prior approval on the list of candidates for membership on the boards of public companies to ensure their integrity and professionalism, experience and ability, that Member is selected by the President of the Council on the basis of criteria of patronage and friendship and mutual interests.

* Capital markets Adviser at National Bank of Abu Dhabi»