Corporate governance in Algeria: principles, challenges and good practice

A correspondent bank questioning your decision-making bodies, an investor demanding audited accounts and an independent board, a founder preparing succession: in each of these situations, it is the quality of your governance that is being assessed. Corporate governance in Algeria is no longer a topic reserved for large groups or listed companies. It shapes access to finance, partner confidence and the ability to weather crises.

Yet the term is often misunderstood, reduced to a legal formality or a matter of board minutes. In this guide, we cover the fundamental principles, the Algerian context, the role of the board of directors and management, and propose a practical roadmap, drawing on the engagements we have carried out in Europe, the Gulf and Algeria.

1. What is corporate governance? Definition and principles

A working definition

Corporate governance is the set of rules, bodies and practices by which a company is directed and controlled. It answers three simple questions: who decides, who oversees, and to whom is each party accountable? It organises the relationships between shareholders, the board of directors, senior management and other stakeholders: employees, banks, customers, suppliers and public authorities.

The four fundamental principles

The Algerian Corporate Governance Code sets out four principles, found in most international frameworks:

• Fairness: stakeholders' rights and duties are allocated fairly, particularly between majority and minority shareholders;
• Transparency: these rights and responsibilities are clear, explicit and known to all;
• Responsibility: each responsibility covers a precise, identifiable matter, without being diluted among several actors;
• Accountability: everyone answers to another party for what they are in charge of, the board to shareholders, management to the board.

These principles are not abstract. A clear shareholders' agreement, a written delegation of authority or a dashboard sent to the board every quarter are direct expressions of them.

2. Corporate governance in Algeria: a varied landscape

Companies with very different realities

Algeria's economy brings together very diverse situations, each calling for a tailored response:

• State-owned enterprises, where the State as shareholder, supervising ministries and corporate bodies must coordinate their respective roles, which regularly raises the question of management autonomy;
• Family groups and SMEs, the majority, where the line between family, ownership and management is often blurred;
• Banks and financial institutions, subject to Bank of Algeria requirements, including Regulation No. 11-08 on internal control, which assigns specific responsibilities to the board;
• Companies listed on the Algiers Stock Exchange, supervised by the COSOB and subject to enhanced disclosure obligations.

The Algerian Corporate Governance Code

Drafted between 2007 and 2008 by the GOAL 08 taskforce, the Algerian Corporate Governance Code was made public in 2009 at the initiative of the Cercle d'action et de réflexion autour de l'entreprise (CARE) and the Forum des chefs d'entreprise (FCE), under the sponsorship of the ministry in charge of SMEs and with support from international partners, including the International Finance Corporation. It primarily targets private SMEs as well as listed companies or those preparing to list. Adoption is voluntary: it contains no binding provisions.

A move towards higher standards

The framework is becoming denser. The COSOB adopted Regulation No. 25-04 of 22 October 2025 on disclosure by listed companies, published in Official Journal No. 12 of 10 February 2026. At the same time, the strengthened anti-money laundering framework and Law No. 25-11 on personal data protection widen the range of issues the board must take up.

3. The board of directors and management: clarifying roles

The board of directors' duties

The board of directors is not a rubber stamp. Its core duties are to:

• define and approve strategic direction;
• approve major decisions: investments, acquisitions, financing;
• oversee risks, internal control and compliance;
• appoint, evaluate and, where necessary, replace executives;
• ensure the integrity of financial reporting.

A balanced composition

An effective board brings together complementary skills: finance, industry knowledge, risk, digital, international. Independent directors, with no ties of interest to controlling shareholders or management, provide a valuable outside perspective, particularly in family businesses where discussions can be swayed by personal considerations.

Senior management and delegation of authority

Senior management executes the strategy and runs the company day to day. The key is a written delegation of authority, specifying the thresholds above which board approval is required. In many Algerian companies, the absence of such thresholds leads either to excessive centralisation around the founder-CEO or to decisions taken without oversight.

Specialised committees

Committees prepare the board's work on technical matters. They do not decide in its place, but make its discussions better informed.

4. Transparency, risk management and compliance

Transparency, the foundation of trust

Transparency is not limited to publishing annual accounts. It requires reliable, complete and timely information: to directors before each meeting, to shareholders at general meetings, to banks and to the market where the law requires it. A board that receives its papers the day before the meeting cannot exercise real oversight. Managing conflicts of interest and related-party transactions also falls under this requirement.

Governance and risk management

A board that does not know the company's main risks is governing blind. It must approve the acceptable level of risk, regularly review the risk map and ensure that treatment plans are followed through. To structure this approach, see our guide to enterprise risk management.

Governance and compliance

Compliance is one of the areas where the responsibility of governing bodies is most directly engaged. Entities subject to Law No. 05-01, as amended, must assess their money laundering risks and maintain appropriate procedures; anti-corruption, governed by Law No. 06-01, requires visible commitment from leadership. We recommend that the board receive a report from the compliance officer at least once a year and guarantee them the direct access they need. To build this function, read our article on the compliance function in Algeria.

Lessons from international practice

In the Gulf as in Europe, we have seen that governance crises rarely stem from a lack of rules. They arise instead from an insufficiently informed board, an unchecked concentration of power or internal alerts left unanswered. The same causes produce the same effects in Algeria.

5. Roadmap: strengthening corporate governance in Algeria

Improving governance does not require turning everything upside down. A step-by-step approach, suited to the company's size, delivers better results than an abrupt overhaul.

Step 1: take stock

Assess the board's composition and functioning, the quality of the information it receives, the existence of committees, the handling of conflicts of interest and the risk management framework. A compliance assessment can cover much of this scope and provide an objective baseline.

Step 2: formalise the rules of the game

• a board charter or internal rules;
• a delegation of authority with clear thresholds;
• a conflict of interest policy;
• an annual calendar of meetings and agenda items.

Step 3: professionalise the board

Gradually open the board to outside profiles, set up an audit committee, arrange director training and carry out an annual self-assessment of how the board works.

Step 4: steer over time

Introduce a quarterly dashboard combining financial indicators, major risks and compliance. Review the roadmap every year: governance is a living process that must keep pace with growth, opening up the capital or succession.

Mistakes to avoid

• Copying a large group's model without adapting it to your size;
• Appointing “independent” directors chosen for their closeness to the CEO;
• Creating committees that never meet;
• Treating governance as a matter for lawyers alone.

Conclusion: corporate governance in Algeria, a lever for trust and performance

Corporate governance in Algeria is first and foremost a matter of clarity: knowing who decides, who oversees and who is accountable. Fairness, transparency, responsibility and accountability are not slogans but concrete practices that reassure banks, attract investors and protect executives themselves. As the expectations of regulators and foreign partners rise, a well-informed board of directors and a responsible management team are a decisive advantage. Start small, but start: a few well-applied rules are worth more than an ambitious code left in a drawer.

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.