Kazakhstan Caps Independent Directors at Three Board Seats After Higher Audit Chamber Review
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Kazakhstan has amended its Model Corporate Governance Code to cap independent directors at three board seats and board chairs at two, after a 2025 Higher Audit Chamber (VAP) review. The limit applies to all joint-stock companies with state participation except the National Welfare Fund, following findings that some directors sat on five or more boards across different regions.
2025 Audit Findings
The Higher Audit Chamber reviewed social-entrepreneurial corporations in 2025 and found independent directors simultaneously serving on management bodies of five or more organizations in different regions of Kazakhstan. Auditors concluded that under that workload directors could not fully participate in board work or take objective, independent decisions. Because many worked remotely, they did not always know regional specifics or internal processes, reducing their role to formal attendance and voting. The findings underpinned a directive to the Ministry of National Economy to revise corporate governance rules.
New Board Caps
The Ministry of National Economy amended the Model Corporate Governance Code after the audit. A board member may now hold no more than three such positions in legal entities, and a board chair no more than two. The limit applies not only to social-entrepreneurial corporations but to all joint-stock companies with state participation, except the National Welfare Fund. The Higher Audit Chamber said the rules are intended to strengthen the independent director institution.
VAP's Stated Rationale
The Higher Audit Chamber said the measure should restore the original purpose of independent directors — real participation in strategic decisions rather than formal presence on several boards. Orda.kz reported that VAP concluded remote directors often lacked knowledge of regional specifics and internal corporate processes, reducing their role to formal voting. The chamber expects the limits to improve the quality of governance in state-owned companies.
What's Next
State-owned companies must now bring board compositions in line with the three-seat and two-seat caps, though the Higher Audit Chamber did not specify a compliance deadline. It remains unclear whether the exemption for the National Welfare Fund will be revisited in future audits of quasi-state governance.
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Kazakhstan Caps Independent Directors at Three Board Seats After Higher Audit Chamber Review
