Required governance positions in Cambodian businesses.

Corporate governance plays a critical role in ensuring transparency, accountability and sustainable growth within Cambodian businesses. As the country’s economy continues to expand and attract both local and foreign investment, the need for well-defined governance structures has become increasingly important. Establishing key governance positions not only helps organisations comply with legal and regulatory requirements but also strengthens decision-making processes and builds stakeholder confidence.

This article explores the essential governance roles that Cambodian businesses should implement to maintain ethical standards, mitigate risks and drive long-term success.

Directors

Private limited companies are required to appoint at least one director, while public limited companies must have a minimum of three. Directors must be at least 18 years old and may simultaneously serve as shareholders. There are no restrictions regarding the nationality or residency of directors, offering flexibility to both local and foreign investors.

If the Articles of Incorporation do not provide a term, directors shall be elected for a term of two years, with the possibility of re-election. Their responsibilities, generally outlined in the articles of incorporation, include overseeing corporate operations, managing financial and strategic decision-making, and representing the company’s interests.

Some of the specific powers granted to directors include appointing and removing company officers, setting compensation packages (subject to shareholder approval) and authorising major transactions such as the issuance of debt instruments, mergers and asset sales. Directors are also responsible for preparing annual financial statements and submitting them to the shareholders at the general meeting.

Board chairman

The chairman is selected from among the board of directors and is tasked with presiding over board meetings and facilitating effective deliberation and decision-making. While the board may vote to remove the chairman from this leadership position, such a vote does not remove the individual from their role as a director.

Company secretary

The role of the company secretary is focused on administrative and regulatory compliance. The secretary is responsible for compiling and maintaining records of board meetings, including minutes and written resolutions. These documents must be made available to all directors upon request, serving as official records of company decision-making.

Since January 2022, Cambodian law requires all companies to appoint a resident company secretary. The secretary must be a natural person residing in Cambodia, although they are not required to be a Cambodian national.

Auditor

Every company, unless specifically exempted, is required to appoint an auditor at its first annual general meeting (AGM) and reappoint one at each subsequent AGM. The auditor’s term continues until the next AGM, or until a successor is appointed, ensuring continuity in financial oversight.

Audit exemptions are granted to smaller companies that meet at least two out of the following three criteria:

• Total assets under USD 750,000
• Annual revenue under USD 1 million
• Fewer than 100 employees at the end of the financial year

However, companies that issue securities to the public, either equity or debt, must undergo an audit regardless of their size. This requirement aims to protect investors and uphold the integrity of Cambodia’s capital markets.

Banking and financial institutions (BFIs) and qualified investment projects (QIP) are also subject to statutory audits.

Conclusion

Sound governance is a foundational aspect of doing business in Cambodia. Appointing qualified individuals to positions such as directors, chairman, company secretary and auditor not only fulfils legal requirements but also supports effective corporate management and investor confidence. By understanding the structure and expectations tied to each governance role, business owners can ensure their companies operate within the regulatory framework and maintain high standards of accountability and transparency.

How Acclime can help with corporate governance in Cambodia

Acclime Cambodia offers complete support for corporate governance compliance and company secretarial services. From appointing directors to fulfilling statutory reporting requirements, our team of experts can assist with everything from maintaining accurate corporate records to ensuring compliance with local regulatory updates. By partnering with us, business owners and foreign investors can confidently meet Cambodia’s governance requirements and maintain smooth, compliant operations. Contact us to learn more about how we can support your board structuring needs and resident company secretary obligations.