Benin report - Institut Africain de la Gouvernance

CHAPTER FIVE: CORPORATE GOVERNANCE__________________________________________________________________________Article 416, which provides that companies can be administered by aboard of directors comprising of a minimum of three and a maximum of 12members.Article 420: The managers shall be appointed for two years in accordancewith the articles of association or by the constituent general assemblyduring its constitution and in the course of corporate life. Their term ofoffice is fixed by the articles of association and may not exceed six years.Article 425: A director may not belong concurrently to more than fiveboards of directors of companies with headquarters in the same country (inthe case of countries that are a signatory to the act).Article 464 and 479: A managing director or chairman of the board ofdirectors may not serve for more than three consecutive terms as managingdirector or board chairman of companies with headquarters in the samecountry (in the case of countries that are a signatory to the act).Article 741: Shareholders holding less than 5% of the share capital mayinstitute a case of social negligence against the executive directors. Thisaction is time-barred after three years following the injurious act or itsrevelation. However, where the wrong is qualified as a crime, the action istime-barred after 10 years.706. The organisation and functioning of public and semipublic companies aregoverned by Act 88-005 of 26 April 1988 in the Republic of Benin. This actdefines the role of the board of directors; the appointment and mandates ofstate agencies and authorities; the functioning of the board of directors; theremuneration of members of the board; and penal sanctions. Articles 35 and 36of this act provide that the general manager and the assistant general managershall be appointed respectively by decree adopted at a Cabinet meeting and byorder of the line ministry after approval by the board of directors of the stateauthority or corporation. The supervisory authority may waive thisprescription to consult the board of directors.707. While a manager cannot belong concurrently to more than three public orsemipublic companies that have their headquarters in Benin, the criteria forhis/her appointment are not laid down by the law or any special regulatoryinstrument.708. Efficient functioning of boards of directors of companies. This situationstems very often from the way in which instruments are applied whenexecuting budgets of public companies and from compliance with theaccounting system.709. In the first case, the different phases prescribed for income and expenditureoperations are not always respected. Consequently, some documents that arerequired to clearly show these phases do not exist (income item, unestablishedcommitment files and nonexistent expenditure items). These were237