The System of Power Distribution Between the Board of Directors and the General Assembly in Libyan Legislation

Abstract

The study concluded that the comparative laws in relation to the distribution of power between the board of directors and the shareholders either adopt the theory of the primacy shareholders or they adopt the theory of primacy of the board of directors. We found that the Libyan legislation grants wide authorities to the board of directors and at the same time restricts the power of the shareholders. Thus Libya adopts the board of directors' primacy theory but in a flexible nature.

For several reasons discussed in this article, the study concluded that it is more beneficial to adopt the UK School in particular, as it adopts the theory of the primacy of shareholders through applying two types of models of companies to companies working in the UK. The study recommended that the legal rules in relation to this subject shall eb distributed into two types of rules: the first one is in relation to state owned companies and the companies the state owns 50% or more of its shares. In this kind of companies, the state can intervene and regulate its corporate constitutions including the distribution of power issues. However, in private companies and companies the state owns less than 50% of its shares, there is no need for the legislator to intervene in such companies and leave the issue of distribution power to the shareholders themselves.