A Guide to Corporate Governance for UAE Listed Companies

Short answer

• Governance is mandatory for listed companies. The SCA's governance code and the Commercial Companies Law set binding board, committee and disclosure rules for every public joint-stock company.
• The board must be independent in part. At least a third of directors must be independent, and the audit committee must be made up entirely of independent directors.
• A 2025 reform changed the top of the board. A chairman may now also be CEO, but only if the board is 75 per cent independent and shareholders approve it.
• The rules are enforced, not aspirational. The SCA reviews governance reports and can fine, sanction or refer breaches, and a listing applicant must be compliant from day one.

Corporate governance for a UAE listed company is a binding regulatory regime, not a best-practice aspiration. A public joint-stock company on the Abu Dhabi or Dubai exchange operates under the Securities and Commodities Authority's governance code and the Commercial Companies Law, which together dictate how the board is composed, which committees must exist, how related-party deals are approved, and what the company discloses. Corporate lawyers in the UAE work on two versions of the same problem: companies preparing to list that have to build a compliant governance structure from a private-company base, and listed companies adjusting to rules that keep tightening.

The governance rules that bind a UAE listed company

Two instruments sit at the centre of the regime. The Commercial Companies Law, Federal Decree-Law No. 32 of 2021, sets the corporate framework for a public joint-stock company: how the board is elected, the duties directors owe, how general assemblies run, and how shares and securities are issued. The SCA's governance code, the Governance Guide issued in 2020, layers the listed-company standards on top, covering board independence, committees, disclosure, and environmental, social and governance reporting. The Abu Dhabi and Dubai exchanges add their own listing and disclosure rules.

The regime is mandatory and it is specific to public joint-stock companies. A private company in the UAE follows the Commercial Companies Law and whatever governance its shareholders choose to adopt, but it is not bound by the SCA governance code. The moment a company lists, or starts preparing to list, the full code applies, and the gap between a private-company board and a listed-company board is wide enough that closing it is a project in itself. The Commercial Companies Law was itself amended in late 2025, and the broader corporate-law changes are set out in our guide on the UAE Commercial Companies Law amendments.

How the board of a listed company must be composed

The board is where most of the governance work concentrates. Under the SCA code, the majority of a listed company's board must be non-executive, and at least one third of the directors must be independent. Independence is defined by the absence of a material relationship with the company, its executives or its controlling shareholder, and a director who fails that test cannot be counted toward the one-third minimum however the company labels them. The board must also include female representation, a requirement the SCA introduced to address the absence of women on UAE listed boards.

The directors carry real duties and real exposure. A board member of a UAE company owes duties of care and loyalty, can be removed for breach, and can face personal liability in defined circumstances, a risk we set out in our guide on director personal liability in the UAE. For a listed company those duties run alongside the disclosure and conflict rules the SCA enforces, which means a director's exposure on a listed board is wider than on a private one.

The harder governance question in the UAE is whether the independence is real. Many listed companies sit under a dominant family or government shareholder, and an independent director who is a long-standing associate of the controlling shareholder satisfies the form of the rule without delivering its substance. A board that never records a dissent, or whose independent directors have never voted against management, is a board where independence exists on paper. The SCA's tightening of the rules, and the market's growing attention to board quality, are both responses to that gap.

The committees a listed company must run

A listed company cannot run its governance from the full board alone. The SCA code requires permanent board committees, each with its own charter, mandate and reporting line. The audit committee is the most important and is mandatory. It must be composed of independent directors, with at least three members, and it oversees financial reporting, the internal control system, and the relationship with the external auditor. A weak audit committee is one of the first things a regulator and an investor look for.

The nomination and remuneration committee handles board appointments, succession and executive pay, keeping those decisions at arm's length from the executives who benefit from them. Financial institutions and some larger companies run a separate risk committee. Each committee has to meet on a defined schedule, keep minutes, and report to the board, and the governance report the company files each year has to show that the committees did real work rather than existing on an organisation chart.

The committee structure is also where a listing applicant is most exposed. A private company rarely has a functioning audit committee of independent directors before it decides to list, and building one, finding the right independent directors, writing the charters, and running the committees long enough to show a track record, takes time the IPO timetable does not always allow.

The 2025 reform that lets a chairman also be CEO

For years the SCA code drew a firm line at the top of the board. The chairman could not hold an executive role, and certainly could not be the chief executive. The SCA's 2025 reform, Chairman's Board Resolution No. 24 of 2025, effective from 26 August 2025, changed that. A chairman may now also serve as the company's chief executive, but only where the company accepts a much heavier independence and oversight burden in exchange.

The conditions are demanding. The company's articles of association must expressly allow the combination, shareholders must approve it through a special resolution supported by a board report explaining the justification and the safeguards, and that approval lasts only for the board's term before it has to be renewed. The independence threshold jumps: where a combined chairman and chief executive sits at the top, at least 75 per cent of the board must be independent, and all permanent committees must be composed entirely of independent directors. A dedicated governance committee, made up only of independent directors, has to monitor the chief executive's performance, review each year whether the combined role remains justified, and define the situations in which the chairman must recuse himself, such as votes on his own remuneration or on audit findings about management.

The reform is best read as a trade. It gives controlling shareholders and founders the flexibility to keep a single figure at the top, which suits many UAE companies, but it buys that flexibility with a level of board independence most companies do not currently have. For a founder who wants to list and stay in control, the combination is possible, but the price is a board the founder no longer dominates.

Disclosure, related-party deals and the rest of the regime

Beyond the board, the code runs on disclosure. A listed company has to publish periodic financial statements, disclose material events that could affect its share price, and file an annual governance report describing how it met the code. The disclosure regime is continuous, not annual, and a failure to disclose a material event on time is one of the more common enforcement triggers.

Related-party transactions carry their own controls. A deal between the company and a board member, a major shareholder, or an entity connected to them has to clear disclosure and approval thresholds, with larger transactions requiring shareholder approval and the interested party excluded from the vote. Insider trading rules, an internal audit function, and a risk management framework round out the operational requirements. Environmental, social and governance disclosure now sits inside the code as well, and the reporting expectations for listed companies are set out in our guide on ESG reporting requirements for UAE businesses.

The minority shareholder is also protected. The code and the Commercial Companies Law give minority holders rights to information, to add items to the general assembly agenda, and to challenge decisions taken without proper process. For a controlling shareholder used to running a private company by instruction, these protections are one of the larger adjustments that listing requires.

How should a UAE company prepare its governance for a listing or review in 2026?

Corporate governance for a UAE listed company is a structural commitment, not a compliance afterthought. The SCA code and the Commercial Companies Law set binding rules on board composition, committees, disclosure and related-party dealings, and the 2025 reform on the chairman and chief executive roles shows the direction of travel: more flexibility on structure, bought with more independence and more oversight. A listed company that treats governance as a reporting exercise meets the form. A listed company that builds it into how the board works meets the substance, and the substance is what survives an SCA review or an investor's scrutiny.

The most time-sensitive issue is the run-up to a listing. A company preparing to go public on the ADX or DFM cannot assemble a compliant board the month before the IPO. The independent directors, the committee charters, the disclosure controls and the related-party framework all have to be in place and operating long enough to show they work, which means the governance build belongs at the start of the listing plan, not the end. For a company that is already listed, the same logic applies to each tightening of the rules, and the 2025 reform did not come with a long runway.

For UAE companies preparing to list, restructuring a board to meet the independence rules, or reviewing a governance framework against the current SCA code, our corporate team advises on board composition, committee structures, related-party controls, and the governance build a listing requires.