Article 67 of the Saudi Companies Law

المادة 67 من نظام الشركات · الفرع الأول: مجلس الإدارة

The article requires a joint stock company to be managed by a board of at least three members, and allows each shareholder to nominate himself or other shareholders or non-shareholders for membership.

Official text (Arabic)

This article has not been amended since the law was issued.

1- يدير شركة المساهمة مجلس إدارة على ألا يقل عدد أعضائه عن (ثلاثة).

2- يحق لكل مساهم ترشيح نفسه أو شخص آخر أو أكثر من المساهمين أو من غيرهم لعضوية مجلس إدارة شركة المساهمة.

This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers

Article 67 explained in plain English

This article sets two basic rules on the management of a joint stock company.

First rule: management is in the hands of a board of at least three. A joint stock company is managed by a board of directors, and its members may not number fewer than (3). The article sets a minimum only, so it does not prevent the number from being higher.

Second rule: the right to nominate is open. Each shareholder may nominate:

himself, or
one or more other shareholders, or
one or more persons who are not shareholders.

The article therefore does not require the nominee to be a shareholder of the company, and does not limit the right of nomination to major shareholders but gives it to every shareholder.

Article 68 complements this provision: it provides that the ordinary general assembly elects the board members, requires the members to be natural persons, refers the voting method to the regulations, and limits the term of membership to no more than four years.

Anyone who wishes to stand for election, or who faces a dispute over the board's composition, should consult a lawyer specialized in companies.

Practical example

Sarah owns a small percentage of the shares of a joint stock company in Riyadh, and she knows a financial expert who owns no shares in the company. Under this article she may nominate him for board membership, and she may also nominate herself. The ordinary general assembly then conducts the election.

Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.

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