UAE New Rules for Leadership in Public Joint Stock Companies

UAE Resolution 24 of 2025 introduces new leadership rules, allowing companies to combine Chairman and CEO roles under strict safeguards, with 75 percent independent boards and new oversight rules.

The United Arab Emirates (UAE) has revised its corporate governance framework for public joint stock companies (PJSCs) with the introduction of Chairman’s Board Resolution No. 24 of 2025(hereinafter referred to as “Resolution 24”). Effective August 26, 2025, Resolution 24 permits companies to merge the positions of Board Chairman and Company Manager (CEO) under specific conditions.

The reform updates the Governance Guide of 2020 and is intended to give companies more flexibility in their leadership structures.

Leadership structure reform

For several years, UAE corporate governance rules prohibited any one person from holding both the Chairman and CEO positions. Resolution 24 now allows this dual role, but only in certain circumstances. A company’s Articles of Association must authorize the arrangement, and shareholders must approve it through a special resolution. In this way, the reform recognizes the need for leadership flexibility but requires formal endorsement from both company rules and shareholder consensus.

The reform increases the emphasis on independent directors. If the Chairman and CEO roles are combined, at least 75 percent of the board must be independent, a much higher proportion than under the earlier framework. Permanent committees, Audit, Nomination, and Remuneration, must also be composed entirely of independent directors. It is meant to place independence at the center of the public joint stock companies’governance structure.

Governance committee oversight

A Governance Committee becomes mandatory under the new system. The committee, made up solely of independent directors, is responsible for monitoring the CEO’s performance and assessing whether the dual role remains appropriate. It must review the justification for combining positions each year and provide recommendations to shareholders.

The committee also determines when the Chairman must withdraw from discussions, particularly when executive performance, remuneration, restructuring, or audit findings are under review. In such cases, the Vice Chairman, who must also be independent, takes over leadership of meetings to maintain impartial oversight.

Shareholder approval and disclosure

Shareholders now have a more direct role in authorizing leadership arrangements. Boards must prepare a justification study whenever they propose combining the Chairman and CEO roles. The study explains why the model is being adopted, how independence will be protected, and what oversight mechanisms will operate in practice.

The findings must be presented at the general assembly, disclosed in governance reports, and published on company websites. Approval is time-limited which means the arrangement cannot extend beyond the board’s term and must be renewed by shareholders if it is to continue.

Risk management and conflict control

Concentrating authority in a single individual creates governance risks. The reform responds to these risks by strengthening recusal rules, expanding the authority of independent committees, and assigning a specific oversight role to the Governance Committee.

Companies are also required to put in place succession planning and conflict-handling procedures to prevent potential abuse of power. The Vice Chairman’s enhanced role during sensitive deliberations adds another safeguard to ensure decisions are not dominated by executive influence.

What it means for boards and legal teams

Resolution 24 carries practical consequences for board composition, committee structures, and internal governance processes. Companies may need to appoint additional independent directors to meet the 75 percent requirement and restructure committees to exclude executive members.

Legal teams and company secretaries will need to prepare justification studies, coordinate shareholder communications, and ensure that disclosure standards are met. Investor relations departments must also anticipate closer scrutiny from institutional investors, who are likely to examine governance rationales in detail before endorsing dual-role arrangements.

Compliance and next steps

As Resolution 24 is already in effect, companies must adapt quickly. The first step is to review Articles of Association to determine whether amendments are needed to allow combined leadership roles. Boards must also be restructured to meet independence requirements, and Governance Committees must be established with clear mandates.

Shareholder resolutions should be prepared in line with the new disclosure obligations, and governance reports and company websites must be updated to reflect these changes. Coordination among in-house counsel, company secretaries, and investor relations teams will be essential to ensure smooth implementation.

In short

Resolution 24 of 2025 represents a new stage in the evolution of UAE corporate governance. It introduces a measure of flexibility for leadership models but sets stricter conditions for board independence and transparency.

Companies that choose to combine the positions of Chairman and CEO must do so under close scrutiny from shareholders and independent committees. For those that maintain separate roles, the reform is still a reminder that independence and accountability remain central to regulatory expectations and to sustaining investor confidence in the UAE’s capital markets.

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