Article 21 of the Saudi Cooperative Societies Law
المادة 21 من نظام الجمعيات التعاونية · الباب الثاني: إدارة الجمعيات التعاونية
The article requires the board of directors to appoint an executive manager to conduct the society's affairs and to set his powers, duties and rights, and makes the board answerable for his work to the general assembly.
Official text (Arabic)
This article has not been amended since the law was issued.
يعين مجلس الإدارة مديرًا تنفيذيًا يقوم بتصريف شؤون الجمعية، ويحدد المجلس اختصاصاته، وواجباته، وحقوقه، ويكون مجلس الإدارة مسؤولاً عن أعمال المدير في مواجهة الجمعية العمومية.
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 21 explained in plain English
This article regulates the post of executive manager of the cooperative society and his relationship with the board of directors.
First: appointment
The board of directors appoints an executive manager, and the wording indicates that having a manager is part of the society's organization.
Second: his task
The executive manager conducts the society's affairs, that is, runs its day-to-day work.
Third: fixing his position
The board sets the manager's powers, duties and rights. The Law itself does not fix his salary or powers but leaves them to the board of directors.
Fourth: responsibility
The board of directors is answerable for the manager's work before the general assembly. This is an important provision: the board cannot disown the manager's errors on the ground that he was the one who carried them out, because it appointed him and set his powers.
The chain of authority in the society thus becomes clear: the general assembly at the top, then the board of directors answerable to it, then the executive manager who works under the board's supervision. Article 22 provides that the general assembly is the supreme authority in the society, made up of all the contributing members.
It is also linked to Article 20, which requires the board to submit the final account and the profit and loss account at the end of the financial year and to present them to the auditor at least one month before the general assembly.
Anyone offered the post of executive manager of a cooperative society who wants to review its terms can consult a lawyer who specializes in commercial and corporate cases.
Practical example
The board of directors of a cooperative society in Hail appointed an executive manager and set his powers in purchasing and hiring. It then turned out that the manager had concluded a losing deal. Under this article, the board is answerable for the manager's work before the general assembly.
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 21 of the Saudi Cooperative Societies Law
Who appoints the executive manager of a cooperative society?
The board of directors appoints him and sets his powers, duties and rights.
Who is responsible to members for the executive manager's errors?
The board of directors is answerable for the manager's work before the general assembly.
More articles on Cooperative Society Board of Directors
- Article 13
The article requires every society to have a board of directors of at least five members elected by the general assembly to manage it within its purposes and regulations, with the founders appointing the first board for three years.
يكون لكُل جمعية مجلِس إدارة، يقوم بكافة الأعمال اللازِمة لإدارتها في حدود أغراضِها ولائحتِها، ويتكون مِن خمسة أعضاء على الأقل، تنتخِبُهم الجمعية العمومية من بين
- Article 14
The article sets the board of directors' term at four years, renewable, bars pay for its members, and allows the general assembly to grant a bonus of up to 10% of annual profits after the statutory deductions.
مُدة عضوية مجلِس الإدارة أربع سنوات، ويجوز للجمعية العمومية التجديد للمجلس لفترة أخرى أو أكثر ، ويستمر المجلس في ممارسة مهامه وصلاحياته إلى أن يتم تعيين المجلس
- Article 15
The article requires the board, when a member's seat falls vacant for any reason, to add the reserve member who obtained the most votes in the general assembly's ballot, to complete the board's remaining term.
إذا خلا مكان أحد أعضاء مجلِس الإدارة لأي سبَّب، فعلى المجلِس أنَّ يضُم العضو – من بين الأعضاء الاحتياطيين - الذي حاز على أكثر الأصوات في إقتراع الجمعية العمومية
- Article 16
The article requires the board of directors of a cooperative society to elect from among its members, at its first meeting, a chairman, a vice-chairman, a board secretary and a treasurer.
ينتخب مجلِس الإدارة من بين أعضائه رئيساً ، ونائباً للرئيس ، وأميناً للمجلس ، وأميناً للصندوق في أول اجتماع له .
- Article 17
The article requires a majority of the board's members to attend for its meeting to be valid, with decisions made by an absolute majority of those present and the side the chair of the meeting voted with prevailing in a tie.
لايكون انعقاد المجلس صحيحا إلا بحضور أغلبية أعضائه ، وتصدر قراراته بموافقة الأغلبية المطلقة لعدد الأعضاء الحاضرين ، فإذا تساوت الأصوات يرجح الجانب الذي صوت معه
- Article 18
The article gives the board continuous supervision of the society's work and oversight of those who manage it, and gives its chairman the right to sign for and represent the society before others and the courts, with the right to delegate and appoint agents.
1- يقوم مجلِس الإدارة بالإشراف على سير العمل بالجمعية بصِفة مُستمِرة، ومُراقبة من يقوم بالإدارة ، ومن يُمثِلون الجمعية والمُفوضين لأعمال مُعيِّنة . 2 - لرئيس مج
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.