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Corporate Governance in Lebanon


The primary sources of corporate governance in Lebanon are included in the Lebanese Commercial Code dated December 12th, 1942, as amended by Law No. 126 dated March 29th, 2019 (“Commercial Code”). Companies and Banks are further guided by the Code of Corporate Governance (“CG Code 2006”) and the Corporate Governance Guidelines for Listed Companies (“CG Guidelines 2010”). Additionally, the Lebanese Central Bank (Banque du Liban) also provides corporate governance guidance for banks by Basic Decision No. 9382 dated July 26th, 2006 (“Basic Circular 106”).

The corporate environment in Lebanon is mostly dominated by family-owned businesses as they constitute the largest portion of the private sector. Banks have also played a critical role in the economic and social development of the country. The corporate governance revolves around both: (i) Listed companies (which also include the banks); and (ii) Non-listed companies (which represent the majority of companies). In practice, and up till now, the corporate governance practices have been mostly applied in the Lebanese banking sector.

Regarding the Board structure, in Lebanon, companies and banks are organized under a one-tier Board system (one board including the management and the supervisory role). The average size of the Board varies from a minimum of three (3) members to a maximum of twelve (12) members. According to the amendment of the Code of Commerce in 2019, one third (1/3) of Board members should be Lebanese nationals (previously the majority of members had to be of Lebanese nationality) and Board members are no longer required to be shareholders of the company. The same legislative amendment removed the requirement to have the position of Chairman of the Board and General Manager (CEO) combined. Indeed, prior to the amendment of the Law in 2019, the Chairman of the Board acted also as General Manager (CEO) of the company. Further to the said amendment, the General Manager (CEO) role has been completely separated from the position of the Chairman of the Board. However, and as at this date, the amendments mentioned above are poorly applied as: (i) The Board of directors, in most companies, remains mostly composed of shareholders and very few private companies have introduced independent members to their Boards; and (ii) similarly, the practice of combining the roles of General Manager and Chairman of the Board remains a practice that is widely spread in Lebanon. In practice, only banks in Lebanon (and even before the 2019 amendments) have independent directors on their respective Boards. Lastly, gender diversity in the Board is quite low.

With reference to the financial disclosure, listed companies are required to prepare and publish their financial statements in line with International Financial Reporting Standards (IFRS). As for the non-financial disclosure, listed companies are required to publish annual reports and comply with all relevant disclosure rules relating to disclosures of material issues. Also, listed companies are recommended to have a code of ethics.

Both banks and listed companies are required to establish audit committees that include non-executive board members. In banks, these committees must be chaired by an independent director, while in listed companies this is only recommended. However, there is no requirement or recommendation that these committees include a majority of independent board members. The changes to the Commercial Code from 2019 provide a definition of related party transactions (RPTS) and an approval process for RPTS. The reports prepared by the management and the auditors on RPTS must be published at the Commercial Registry. Also, no related party transaction may be entered into unless duly authorized in advance by the affirmative resolution of the General Assembly Meeting held, based on the recommendation of the Board. Granting loans, facilities, securities or any guaranties towards third parties is prohibited.

Additionally, the law requires the external auditor to be independent, and the overall tenure of the partner performing the external audit has been limited to five years. In 2019, Law No. 126 brought amendments to the Commercial Code by including provisions prohibiting external auditors to provide any non-auditing services to companies, including consultancy services. The prohibition is extended to shareholders (or shareholder group) that own 10% or more of the company's capital.

In extraordinary general meetings, resolutions are passed by a two-third majority of the shareholders attending or represented. The blocking minority as such is of 33%+1 share. The Law provides for the principle of one-share-one-vote as a general rule. In 2019, double voting right was abolished for companies created after July 1st, 2019. Previously, double voting rights were granted to shares that have been held by the same person for more than two years. The Lebanese law provides a free transferability of shares, except for founder's shares, which cannot be transferred for a period of two years following the registration of the company. Notice and agenda of the General Assembly Meeting must be provided to shareholders at least 20 days in advance of being held. The threshold for requesting a General Assembly Meeting by minority shareholders is 20% of voting rights.

In terms of the minority shareholders’ protection and shareholders’ access to information, shareholders have general inspection rights in relation to main corporate documents. Shareholders have pre-emptive rights in cases of capital increases by issuance of ordinary shares. For the issuance of preferential shares this possibility may be envisaged by the company's articles of association.

Finally, for the corporate governance structure and institutions, the main regulators in Lebanon are the Central Bank, the Banking Control Commission and the Capital Markets Authority. International audit firms have a material presence in the country. Nevertheless, the institutional environment is weak as there are limited enforcement capabilities. 


Eliane Gannagé el Khazen

Attorney at Law/ Senior Legal Consultant




Code of Commerce in Arabic language: PDF attached below

CG Code 2006:

CG Guidelines 2010 :

Basic Circular 106: PDF attached below




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