‘New CAMA will lead to improved corporate governance’

to the Companies and Allied Matters Act, 2020, thus amending and succeeding the Companies and Allied Matters Act 1990. While a significant part of the provisions of the former CAMA was restated or clarified, there were notable amendments which altered the framework, procedural requirements, corporate governance provisions and detailed compliance protocols that should enable a more-conducive business environment.

There is a further requirement under Section 275 for public companies to have at least three independent directors on their boards. These independent directors are expected to act as strong, objective voices on the board, with the goal of improving transparency in the decision-making process for public companies.

According to section 434 of the Act, the directors of a company can now make a proposal to the company’s creditors for a composition in satisfaction of its debts or a scheme of arrangement of its affairs. This proposal will provide for a nominee, who is an insolvency practitioner, to act as a trustee and otherwise supervise the implementation of the voluntary arrangement.

The import of all this new provision is that the insolvency framework has been expanded and there are more enforceable options available to choose from for the stakeholders of the company to address the issue of insolvency should it arise. It would now be left to each creditor or other stakeholder of the company to seek sound legal advice in choosing what option would best achieve their objectives.

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