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Article 69 of the Saudi Companies Law

المادة 69 من نظام الشركات · الفرع الأول: مجلس الإدارة

The article regulates electing a new board before the term ends, the resignation of the board or one of its members, filling vacant seats, and interested parties' right to go to the judicial authority if an election cannot be held.

Official text (Arabic)

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

1- على مجلس الإدارة أن يدعو الجمعية العامة العادية إلى الانعقاد قبل انتهاء دورته بمدة كافية؛ لانتخاب مجلس إدارة لدورة جديدة. وإذا تعذر إجراء الانتخاب وانتهت دورة المجلس الحالي، يستمر أعضاؤه في أداء مهماتهم إلى حين انتخاب مجلس إدارة لدورة جديدة، على ألا تتجاوز مدة استمرار أعضاء المجلس المنتهية دورته المدة التي تحددها اللوائح.

2- إذا اعتزل رئيس وأعضاء مجلس الإدارة، وجب عليهم دعوة الجمعية العامة العادية إلى الانعقاد لانتخاب مجلس إدارة جديد، ولا يسري الاعتزال إلى حين انتخاب المجلس الجديد، على ألا تتجاوز مدة استمرار المجلس المعتزل المدة التي تحددها اللوائح.

3- يجوز لعضو مجلس الإدارة أن يعتزل من عضوية المجلس بإبلاغ مكتوب يوجهه إلى رئيس المجلس، وإذا اعتزل رئيس المجلس وجب أن يوجه الإبلاغ إلى باقي أعضاء المجلس وأمين سر المجلس، ويعد الاعتزال نافذًا -في الحالتين- من التاريخ المحدد في الإبلاغ.

4- ما لم ينص نظام الشركة الأساس على غير ذلك، إذا شغر مركز أحد أعضاء مجلس إدارة شركة المساهمة لوفاته أو اعتزاله ولم ينتج عن هذا الشغور إخلال بالشروط اللازمة لصحة انعقاد المجلس بسبب نقص عدد أعضائه عن الحد الأدنى المنصوص عليه في النظام أو نظام الشركة الأساس، فللمجلس أن يعين -مؤقتًا- في المركز الشاغر من تتوافر فيه الخبرة والكفاية، على أن يبلغ بذلك السجل التجاري، وكذلك الهيئة إذا كانت الشركة مدرجة في السوق المالية، خلال (خمسة عشر) يومًا من تاريخ التعيين، وأن يعرض التعيين على الجمعية العامة العادية في أول اجتماع لها، ويكمل العضو المعين مدة سلفه.

5- إذا لم تتوافر الشروط اللازمة لصحة انعقاد مجلس الإدارة بسبب نقص عدد أعضائه عن الحد الأدنى المنصوص عليه في النظام أو في نظام الشركة الأساس، وجب على باقي الأعضاء دعوة الجمعية العامة العادية إلى الانعقاد خلال (ستين) يومًا؛ لانتخاب العدد اللازم من الأعضاء.

6- في حال عدم انتخاب مجلس إدارة لدورة جديدة أو إكمال العدد اللازم لأعضاء مجلس الإدارة، وفقًا للفقرات (1) و(2) و(5) من هذه المادة، يجوز لكل ذي مصلحة أن يطلب من الجهة القضائية المختصة أن تعين من ذوي الخبرة والاختصاص وبالعدد الذي تراه مناسبًا من يتولى الإشراف على إدارة الشركة ويدعو الجمعية العامة إلى الانعقاد خلال (تسعين) يومًا؛ لانتخاب مجلس إدارة جديد أو إكمال العدد اللازم لأعضاء مجلس الإدارة بحسب الأحوال، أو أن يطلب حل الشركة.

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 69 explained in plain English

This article deals with situations that may leave the company without a full board of directors and sets a solution for each.

  1. End of the term: The board must call the ordinary general assembly, sufficiently before its term ends, to elect a new board. If the election cannot be held and the term ends, the members continue in their duties until a new board is elected, provided the period of continuation does not exceed what the regulations specify.
  2. Resignation of the chairman and all the members: They must call the ordinary assembly to elect a new board, and the resignation takes effect only after it is elected, within the period the regulations specify.
  3. Resignation of a single member: It is made by written notice to the chairman of the board, and if the resigning member is the chairman, the notice is addressed to the other members and the secretary. The resignation takes effect from the date stated in the notice.
  4. A seat vacated by death or resignation: Unless the articles of association provide otherwise, and if the vacancy does not bring the number below the minimum needed for a valid meeting, the board may appoint a temporary member who has experience and competence, notify the commercial register, and the Authority if the company is listed, within (15) days of the appointment, and submit the appointment to the ordinary assembly at its first meeting. The new member completes the term of his predecessor.
  5. The number falls below the minimum: The remaining members must call the ordinary assembly within (60) days to elect the number needed.
  6. If the election is not held under paragraphs 1, 2 and 5: any interested party may ask the competent judicial authority to appoint someone to supervise the management of the company and call the general assembly within (90) days to elect a new board or complete the number, or to ask for the company to be dissolved.

This article is linked to Article 68, which limits the term of membership to no more than four years, and to Article 70, which allows a member who is frequently absent to be removed from membership. In disputes over the board's composition, it is advisable to consult a lawyer specialized in companies.

Practical example

A member of the board of a listed joint stock company in Riyadh died, and the number of members remained sufficient for a valid meeting. The board temporarily appointed an experienced adviser to the vacant seat and notified the commercial register and the Authority within 15 days, then submitted the appointment to the ordinary general assembly at its first meeting, and the new member completes the term of his predecessor.

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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Frequently asked questions about Article 69 of the Saudi Companies Law

How does a member of a joint stock company's board resign?

By written notice addressed to the chairman of the board, taking effect from the date stated in the notice. If the resigning member is the chairman, the notice is addressed to the other members and the secretary.

Does the board continue after its term ends?

If a new board cannot be elected, the members continue in their duties until the election, provided the period of continuation does not exceed what the regulations specify.

What happens if the number of members falls below the minimum?

The remaining members must call the ordinary general assembly within 60 days to elect the number needed.

What can a shareholder do if a new board is not elected?

Any interested party may ask the competent judicial authority to appoint someone to supervise the management of the company and call the assembly within 90 days, or to ask for the company to be dissolved.

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The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.