The Algerian Corporate Governance Code: what it really recommends

Many Algerian executives have heard of it; few have actually read it. The Algeria corporate governance code, made public in 2009, is nevertheless one of the few frameworks designed specifically for the country's businesses, and for family SMEs in particular. It creates no legal obligation, but it sets out precisely what a bank, an investor or a foreign partner expects from your governing bodies.

In this article, we go back to the source: who wrote it, who it is aimed at, what it really recommends on the general meeting, the board, management and stakeholders, and how to use it today. Our reading is based on the text itself and on the governance engagements we have carried out in Europe, the Gulf and Algeria.

1. The Algerian Corporate Governance Code: origins and ambition

A private-sector initiative

The Code was produced by the GOAL 08 taskforce (for "Gouvernance Algérie"), set up in November 2007 and chaired by Slim Othmani, at the initiative of the Cercle d'action et de réflexion autour de l'entreprise (CARE) and the Forum des chefs d'entreprise (FCE). The work was finalised in November 2008, under the sponsorship of the ministry in charge of SMEs and crafts and with support from international partners including the International Finance Corporation and the Global Corporate Governance Forum. The text was made public in 2009.

To place the Code in its wider context, see our guide to corporate governance in Algeria.

An educational tool, not a regulation

Its authors present it as an awareness-raising and reference tool, not as an exhaustive rulebook. It contains no binding provisions and does not replace the Commercial Code, articles of association or sector-specific rules. Its ambition is to help businesses professionalise in the context of diversifying the economy beyond hydrocarbons.

A clearly defined target

The Code primarily targets private SMEs, as well as listed companies or those preparing to list. Wholly state-owned enterprises are excluded from its scope. It distinguishes two situations: the family SME whose priority is to secure its future, and the growing SME that needs capital, bank financing and new partners.

2. The four principles and the problems they are meant to solve

Fairness, transparency, responsibility, accountability

All the recommendations flow from four principles:

• Fairness: a fair allocation of rights and duties, particularly between majority and minority shareholders;
• Transparency: clear rules and responsibilities, known to those concerned;
• Responsibility: each responsibility covers a specific matter and is not diluted;
• Accountability: everyone answers to another party for what they are in charge of.

The practical difficulties of Algerian businesses

The Code starts from a clear-eyed diagnosis. It identifies the most frequent points of friction: unprepared succession, strained relations with banks due to a lack of reliable information, difficulty attracting outside investors, complex relations with the tax authorities and disputes between partners. These problems, identified more than fifteen years ago, remain current in many of the companies we support.

3. General meeting, board and management: what the Algeria corporate governance code recommends

The general meeting: the shareholders' power

The Code recalls that shareholders decide on the major orientations: strategic objectives and acceptable level of risk, approval of the accounts, allocation of profits, changes to the articles and to the capital, appointment and dismissal of directors. It stresses three items of good practice:

• clear and timely information, allowing shareholders to ask questions and propose resolutions;
• an explicit dividend policy, proposed by the board and approved each year, balancing distribution and reinvestment;
• disclosure to the general meeting of agreements concluded between some of the shareholders.

The board of directors: strategy, oversight and conflicts of interest

The board sets strategy through a medium-term business plan that is regularly updated, framed by a risk policy. It selects and supervises management, prepares its succession and evaluates it transparently. It sets executive pay in line with the company's long-term interest, and works to prevent conflicts of interest and abuses such as the use of company assets for personal purposes.

Outside directors for SMEs

On board composition, the Code recommends a balance of skills between shareholders, executives and outside directors. For SMEs, it strongly encourages outside directors, chosen first for their expertise and moral authority. This is a pragmatic approach: in a modest-sized company, a former banker or an experienced industrialist often contributes more than purely formal independence.

Advisory committees

The Code refers to committees responsible for audit, financial control, strategy, and the selection and remuneration of senior executives. They remain advisory: they inform the board without deciding in its place, and their mandate, composition and operating rules should be made public.

Executive management

Management proposes the strategy, executes it once approved and reports results to the board. Its remuneration should be linked to the company's performance, based on criteria set in advance.

4. Stakeholders, transparency and succession

Relationships of trust with the ecosystem

The Code devotes an entire part to external stakeholders:

A disclosure policy set by the board

The board should adopt a communication policy that distinguishes public from confidential information and sets a timetable and channels for disclosure. For listed companies, these expectations are now extended by COSOB Regulation No. 25-04 of 22 October 2025 on disclosure of information, published in Official Journal No. 12 of 10 February 2026.

Preparing succession

The Code distinguishes four options: family succession, sale to a third party, family control with an outside executive overseen by a family council, or keeping management within the family. Its advice is clear: plan early, make the company's interest the deciding criterion, entrust the board with steering the process and prepare the successor. The appendices also offer guidance on family governance, notably the family council and clarifying roles between family member, shareholder, executive and employee.

5. Adopting the Code and applying it in 2026

A flexible adoption mechanism

Adoption follows a two-step approach: the company carries out a self-assessment using the checklist provided in the appendix, then publicly declares its adherence to all or part of the Code. It may express reservations or propose amendments. This partial-adoption model is more flexible than the "comply or explain" principle of European codes, but it follows the same logic: making one's choices visible.

What has aged, what remains essential

Some of the text's legal and accounting references have changed since 2009 and should be checked against the rules currently in force. The core of the Code, however, remains fully relevant. It now combines with new expectations: board oversight of money laundering risks since Law No. 05-01 was strengthened, personal data protection under Law No. 25-11, and heightened demands from correspondent banks following Algeria's removal from the FATF grey list on 19 June 2026.

A five-step roadmap

1. Carry out the self-assessment proposed by the Code, ideally with an outside perspective;
2. Formally separate personal assets from company assets;
3. Draft a board charter and a delegation of authority with clear thresholds;
4. Bring in one or two outside directors and set up an audit committee;
5. Formalise the disclosure policy and the succession plan.

To establish your starting point objectively, a compliance assessment that also covers governance is an effective tool. Board oversight of risks also benefits from a structured approach to enterprise risk management.

Lessons from international experience

In the Gulf as in Europe, we have seen voluntary codes become genuine market standards: banks and investors end up asking how the company complies with them. Companies that moved early then negotiate from a stronger position. The same trend is likely in Algeria as the financial market gradually opens up.

Conclusion: the Algeria corporate governance code, an under-used lever

The Algeria corporate governance code imposes nothing, and that is precisely its strength: it lets each executive choose their own pace. Its recommendations on the board, outside directors, transparency towards banks and succession address the most practical difficulties faced by Algerian SMEs. Adopting it, even partially, sends a signal of seriousness to your partners and prepares the business to last. Start with the self-assessment: it will quickly show you where your priorities lie.

Fayçal Lounes

Founder of Hodemia Consulting

Nearly 20 years of international experience in regulatory compliance, risk and governance (EY in Luxembourg, San Francisco and London; Director, Regulatory & Compliance Services at KPMG Middle East). Certified coach, trainer and academic.