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On 13 January 2025, the Ministry of Commerce, Industry, and Investment Promotion (MoCIIP) issued the Principles of Corporate Governance for Closed Joint Stock Commercial Companies operating in the Sultanate of Oman under Ministerial Decision 5/2025. The new Corporate Governance Law comprises nine chapters and serves as the primary document for Corporate Governance in closed joint stock commercial companies. It is based on the Commercial Companies Law (CCL) established by Royal Decree 18/2019 and the Commercial Companies Regulation issued under Ministerial Decision 146/2021. This landmark decision introduces a comprehensive framework to strengthen governance practices within closed joint stock companies, fostering accountability, transparency and sustainable growth.

In this report, we present some of the key provisions of the Corporate Governance Law that board members should be aware of including those related to the process of establishing and appointing board members, the specific duties of care as part of the board of directors� responsibilities, the financial oversight and disclosure requirements, delegating specific tasks as part of the power of authorities, and provisions to mitigate and avoid conflict of interest for board members. Furthermore, according to the Ministerial Decision, the new law will take effect the day after its official publication. As stipulated in Article II, the companies addressed must rectify their status within one year from publication to comply with the new law’s provisions.

The Corporate Governance Code for public joint stock companies has been in effect since 2016, established by the Financial Services Authority (FSA). In contrast, closed joint stock companies (SAOCs) were governed solely by the Commercial Companies Law, which did not specify detailed requirements for the board and its sub-committees.

However, with Royal Decree 5/2025, detailed requirements for the board and its committees have now been introduced for SAOCs. Our document outlines the key differences between these three Corporate Governance regulations.

Roshni Ahuja
Associate Director, Governance, Risk and Compliance Services