The new Corporate Governance Code for listed companies

The Qatar Stock Exchange (“QSE”) operates two distinct markets: the Main Market and the Venture Market. The Main Market, home to larger and more established companies, was previously governed by the Governance Code for Companies & Legal Entities Listed on the Main Market, issued under Qatar Financial Markets Authority (“QFMA”) Board Decision No. (5) of 2016 (“Main Market Code”). The Venture Market, tailored for smaller or high-growth companies, has been governed by the Corporate Governance Code for Companies Listed on the Venture Market, issued under QFMA Board Decision No. (5) of 2014 (“Venture Market Code”).

The QFMA has recently amended listing companies’ corporate governance framework by issuing the Board Decision No. (5) of 2025, which enacts the Governance Code for Listed Companies (“New Code”). Published in the Official Gazette on 17 August 2025, the New Code took effect the following day.

The New Code explicitly repeals the Main Market Code but does not expressly revoke the Venture Market Code. It remains unclear which code applies in the Venture Market. However, our understanding is that the intension of the QFMA for venture market companies to eventually follow the New Code. The minimum standards are set by the Venture Market Code, with additional standards under the New Code.

Application and Compliance

The New Code mandates full compliance for all companies listed on the Main Market. For the Venture Market, a more flexible “comply or explain” regime has been introduced, allowing companies to either adhere to the New Code’s requirements or provide a clear, reasoned explanation for any deviations. This approach balances the need for transparency and accountability with the developmental needs of smaller or high-growth companies.

Both Main Market and Venture Market companies have been granted a one-year transition period to achieve compliance, with the possibility of extensions.

Key Features of the New Code

The New Code introduces a range of robust measures, aligning Qatar’s corporate governance framework with international best practices while recognising the unique dynamics of its capital markets. Below are the key features of the New Code:

International Alignment

The New Code reflects Qatar’s commitment to aligning its corporate governance practices with global standards. Drawing on principles from leading international frameworks such as those of the International Organization of Securities Commissions (IOSCO), the Organisation for Economic Co-operation and Development (OECD), the International Sustainability Standards Board (ISSB), and the International Corporate Governance Network (ICGN), the New Code incorporates modern governance principles into the requirements. 

ESG and Sustainability Reporting

For the first time, Qatari listed companies are required to disclose their environmental and social impact in line with global standards. This includes reporting on environmental policies, climate-related risks, social indicators, and governance performance. The introduction of mandatory ESG reporting reflects the growing importance of sustainability in global markets and investor decision-making.

Board Composition and Independence

The New Code introduces stricter requirements for board composition and independence in listed companies. Boards must now consist of seven to eleven members, with at least three independent directors who meet enhanced independence criteria. These criteria include extending the period affecting independence from three years to five years, limiting the term of independent members to a maximum of two consecutive terms, and requiring a university degree along with at least five years of relevant financial or corporate experience. One or more board seats may also be allocated to represent minorities and/or employees. The New Code places a strong emphasis on board diversity, collective skills, and ongoing training, including induction programmes for new members and annual training to maintain excellence and adapt to developments. These measures aim to ensure that boards are equipped to provide effective oversight and strategic direction in a complex business environment.

Board Committees

The New Code mandates the establishment of three key board committees: (i) Audit, (ii) Risk Management and Compliance, and (iii) Nomination, Remuneration, and Incentives. Each committee must operate under a clear charter, with defined responsibilities and a majority of independent members. To prevent the concentration of power, the New Code encourages the rotation of committee memberships and chairmanships. 

Remuneration and Incentives

The New Code introduces a risk-based approach to remuneration, linking executive and board incentives to long-term performance and risk management rather than short-term profits. Enhanced disclosure requirements ensure greater transparency in remuneration policies and performance indicators. These measures aim to align executive interests with the long-term sustainability of the company.

Enhanced Transparency and Disclosures

Companies are required to publish an annual governance report, which must include details on compliance, ESG performance, risk management, related party transactions, and remuneration, etc. Real-time disclosure of material information to the QFMA, the QSE, and on company websites is also mandated, reflecting modern expectations for digital transparency.

Insider Trading

Insider trading controls have been tightened. The New Code specifies detailed requirements for insider trading to ensure transparency and prevent misuse of material information. Companies are required to establish rules and procedures to safeguard sensitive data, maintain a list of insiders, and ensure that insiders are informed of their responsibilities and potential legal liabilities. Insiders must uphold confidentiality, avoid trading based on material non-public information, and disclose their transactions within three business days. Additionally, the depository is tasked with monitoring compliance and providing regular updates to the relevant authority, while the market is responsible for publishing the list of insiders and ensuring adherence to the regulations.

Special Provisions for Government Representatives

Recognising the significant role of government-linked entities in Qatar’s capital markets, the New Code introduces specific provisions for government representatives on boards. These rules aim to enhance transparency, accountability, and the protection of stakeholder rights.

Shareholder and Stakeholder Rights

The New Code strengthens protections for minority shareholders, introducing mechanisms to ensure fair treatment in major transactions and takeovers. It also emphasises the rights of other stakeholders, such as employees, creditors, and customers, by providing mechanisms for raising concerns with the board. 

Conclusion

The New Code is an important step in enhancing corporate governance standards for listed companies in Qatar. By balancing strict compliance for established companies with flexibility for smaller or high-growth entities, the New Code supports the development of a transparent, inclusive, and sustainable capital market. As the one-year compliance window progresses, listed companies should prioritise aligning their governance practices with the New Code to meet regulatory expectations and gain investor confidence. For companies currently in the process of listing, early adoption of the New Code’s principles can streamline the listing process and demonstrate a proactive commitment to good governance.