Cayman Islands: Corporate Governance

When a majority shareholder sought to remove directors through an extraordinary general meeting, the board attempted to postpone the vote indefinitely using broadly drafted powers in the company's articles of association. The Cayman Grand Court was asked to determine whether such procedural mechanisms could be deployed to effectively neutralise fundamental shareholder rights, and whether directors could entrench themselves by blocking the very votes intended to remove them.

The Cayman Islands Monetary Authority has introduced new enforceable AML and Sanctions Rules that consolidate key obligations from 245 pages of guidance into streamlined regulations. These rules, effective September 2026, introduce expanded requirements for compliance programmes, independent audits, and governance frameworks that CIMA-regulated financial service providers must implement.

The Cayman Islands Monetary Authority has released its 2026 Thematic Review examining compliance practices at Class B(iii) and Class D licensed reinsurers, revealing that corporate governance weaknesses represent 68% of all findings.

Financial service providers and international businesses operating through the Cayman Islands have obligations across automatic exchange of information regimes, economic substance and related reporting.

The Cayman Islands Monetary Authority (CIMA) is empowered, under the Monetary Authority Act and certain other regulatory laws, to inspect regulated financial service providers (FSP) in the Cayman Islands such as banks, insurers, trust companies, company managers, administrators, investment managers and virtual asset service providers for compliance with applicable regulatory frameworks.

Private credit continues to play an increasingly significant role in global capital markets, as borrowers and investors seek alternatives to traditional bank lending.

On 31 July 2024, the Beneficial Ownership Transparency Act, 2023 (BOT Act), the Beneficial Ownership Transparency Regulations 2024 and related guidance came into force (together, the BO Regime).

The first half of 2024 has seen private equity capitalising on the strong recovery of the financial markets following a period of prolonged market volatility, sustained high interest rates and continued inflationary.

The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 ("Bill") which sets out proposed amendments to the Companies Act 2014 arising from issues identified...