Corporate governance and executive employment in the UAE

A senior person here holds two things at once: an office the company gives them and an employment relationship they sign. The papers behind those two are written at different times by different people, and the day they disagree is usually the day of a decision nobody wants to redo.

Where the incentive itself is the question, that is stock option plans; the terms everyone else in the company signs are employment contracts.

What you get

• Powers written instead of assumed
• Office and employment in step
• A working list of reserved matters
• An exit that closes both halves
• The meeting calendar the law sets

Where the authority actually comes from

• The default. Unless the appointment contract or the constitution states the powers, the manager is authorised to exercise full powers to manage the company, and his acts bind it once he states that capacity.
• The borrowed rules. Beyond what the law says about limited liability companies, the provisions written for board members of joint stock companies apply to their managers.
• The competition bar. A manager may not run a competing company or deal in a competing trade without the general assembly’s approval, on pain of dismissal and compensation.
• The reporting duty. The manager prepares the balance sheet, the profit and loss account and an annual report within three months of the year end.

The calendar the law sets

• A general assembly at least once a year, within four months of the end of the financial year.
• The manager must call one at the request of partners holding at least 10% of the capital.
• The invitation goes out at least 21 days before, with the agenda and the quorum in it.
• Past 15 partners, a supervisory board of at least three partners is appointed for three years, and the managers do not vote on it.
• A resignation goes to the general assembly, which has 40 days to decide before it takes effect anyway, and the authority is notified within 30 days of the appointment ending.

Which employment law reaches the executive

• On the mainland the federal labour law applies to all establishments, employers and workers in the private sector.
• It does not reach government employees, the armed forces, police and security, or domestic workers, and the Cabinet may exclude further categories.
• Inside an ordinary zone two sets bind at once: what the zone issues, added to the federal law and never replacing it.
• Only the pair of financial zones differs: each operates an employment regime of its own, and the federal one steps aside there.

Formats of work

One executive, done properly

A single senior hire or exit, with the appointment, the powers and the employment terms drafted as one set rather than three.

The authority map

Every material decision traced from the owners through the board and the manager to whoever signs outside, with contradictions listed.

Standing cover

Appointments, resignations, powers and meeting papers handled as they come, with the calendar kept by us.

Sources: the default powers, the borrowed rules, competing activity, the reporting duty, the meeting, the 10% request, the 21 days, the supervisory board and the 40 days — articles 83, 84, 86, 87, 92, 93, 88 and 85 of Federal Decree-Law 32 of 2021; the scope of the labour law — article 3 of Federal Decree-Law 33 of 2021.