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Board Operations

Separation of Chairman and the Company’s President

 

The Chairman as the head of the Board shall play a central role in ensuring the effective governance of the Company and shall be responsible for the Board’s effective function. The separation of the roles of the President and Chairman is a method of ensuring an appropriate balance of power, increasing accountability and increasing the capacity of the Board for independent decision making and therefore achieving a balance between authority, functions and control. The separation of the roles is aimed to maintain the effectiveness of the Chairman of the Board in monitoring the operations of the Board. Such function can obviously be weakened if the Chairman would simultaneously exercise the duties of the President of the Company.

 

Role of the Chairman

 

  • The Chairman of the Board should be responsible for leading the Board and ensuring that it successfully discharges its overall responsibility for the Company as a whole. The Chairman should be expected to fulfill the following responsibilities:
    • Ensure that the Board provides leadership and vision to the Company.
    • Ensure that the Board is participating in establishing the aims, strategies and policies of the Company.
    • Ensure that there is adequate monitoring of the pursuit and attainment of the goals and aims of the Company.
    • Direct the Board discussions to effectively use time to address the critical issues facing the Company.
    • Ensure that Directors are enabled and encouraged to play their due role in the meetings.
    • Ensure that Directors have adequate opportunities to express their views.
    • Ensure that Directors are provided with sufficient and timely information.
    • Ensure that minutes properly reflect decisions and resolutions.
    • Participate in, through the Nomination & Remuneration, the ongoing development of the Board as a whole and Directors individually.
    • Monitor the Code of Corporate Governance.
    • Call for the meeting of the Board as and when required.
  • The Board, on the basis of the competence, achievements and record as a leader, shall select the Chairman.
  • The Chairman also has the responsibility to establish a healthy working relationship between the Board and the President. To facilitate this relationship it is expected that the Chairman shall:
    • Be the major point of contact between the Board and the President.
    • Be kept fully informed of key issues by the President on all matters, which may be of interest to Directors.
    • Regularly review, with the President and such other Senior Management as the President recommends, progress on important initiatives and significant issues facing the Company.
    • Provide mentoring for the President.
    • Participate in the “President” evaluation process.
    • Participate in, through the Nomination & Remuneration Committee, the annual process of the Board and Director Evaluation.

 

Directors Orientation & Continuing Education

 

  • The Nomination & Remuneration Committee of the Board shall provide an orientation program for new Directors which will include presentations by Senior Management on the Company’s strategic plans, its significant financial, accounting and risk management issues, its compliance programs, its operations, its Code of Conduct, its management structure, its key policies, practices, Executive Officers and its internal and external auditors. The orientation program shall also include visits to certain significant branches, to the extent practical. In addition each incoming Director shall be provided with an initial information pack which should include copies of Memorandum and Articles of Association, extracts from relevant policies, the Executive summary of the corporate plan and other appropriate information.
  • The Nomination & Remuneration Committee of the Board shall also make available continuing education programs for all members of the Board. All Directors should be expected to participate in the orientation and continuing education programs. The Chairman of the Board shall be responsible for providing an ongoing Director Education Program, under which all Directors shall periodically receive materials and/or briefing sessions on subjects that would assist them in discharging their duties. All Directors shall also be encouraged to participate in appropriate continuing education programs at the Company’s expense to assist them in carrying out their duties and responsibilities.

 

Role of the President

 

  • Provide the required linkage between the Board of Directors and the Executive Management Team.
  • Provide the Board and the Chairman with adequate information to carry their responsibilities.
  • Assist the Board of Directors in establishing the Company’s strategic direction to increase revenue and profitability.
  • Provide advice, guidance, direction, and authorization to the Executive Management Team to carry out major plans and procedures, consistent with established polices.
  • Develop, in coordination with the Executive Management Team, integrated strategic and business plans that optimize market share and profitability of existing or new businesses.
  • Conduct a strategic review of the Company’s performance on a regular basis to determine whether the Company is meeting its short and long term objectives (whether financial or non financial) as determined by the Board.
  • Review the operating results of the Company and joint ventures, compare them with the established objectives, and follow up to ensure appropriate measures are taken to correct any unsatisfactory results.
  • Establish and maintain an effective system of communications throughout the

organization to ensure that the responsibilities, authorities, and accountabilities of all Executives are defined and understood.

Represent the Company with major customers, government entities, joint ventures partners, the financial community, and the public.

Engage in business development activities with high level customers and promote the Company’s brand name and image.

 

Board Secretary

 

  • The Board of Directors shall appoint a Secretary from among its members or from outside the Board, and shall determine his duties, authorities, and compensation.
  • The Board Secretary performs several roles including:
    • Ensure that Board procedures are followed and regularly viewed.
    • Follow up on Board’s decisions, and report back to the Chairman and the Board on any difficulty encountered.
    • Support the Chairman and Directors with information about their responsibilities
    • Prepare and distribute draft Board meetings minutes
    • Ensure good information flow within the Board and between the Board and Executive Management.
    • Performs any other role assigned to him by the Chairman of the Board.

 

Board Meetings

 

  • Day-to-day management of the Company is delegated to the President and through to the Senior Executive team. The Board retains the powers relating to general strategic and policy related issues, the Company’s capital structure, declaration of dividend and other major issues affecting the Company. It is not necessary for every decision taken by the Directors to be made at a Board meeting. Directors may not necessarily require meeting together in one place to make decisions. Meetings by video or telephone hook-ups or any other form of technology that is consented by the Directors are acceptable.
  • A Circular Resolution signed by at least two-thirds' majority of all Directors shall also be deemed to constitute a decision of the Directors as if it had been made at a duly constituted Board meeting. The Company Secretary should send notices of Board meetings to all Directors. Annual Reports should contain a statement of the number of Board meetings held during the reporting period at which a Director could attend, and the number of meetings which the Director did in fact attend. Absence from Board meeting(s), shall not excuse Directors from their duties to the Company in relation to the matters considered and decided.
  • Non Executive Directors shall meet privately in regular Executive sessions without management participation during the year. Non Executive Directors are all those who are not Company Executive Officers, including such Directors who are not independent by virtue of materials relationship, former status or family membership, or for any other reason. The Non Executive Directors shall designate one among them as the Director to lead the Executive sessions.
  • The Chairman of the Board presides over the meetings of the Board and is responsible for coordinating the overall management and functioning of the Board. In absence of the Chairman, the Board will mutually elect the Chairman to preside that specific meeting.
  • Notices to call the meeting, should be prepared in Arabic and English and shall be sent to the members of the Board by email or by mail to the address indicated by the member of the Board at least seven (7) days prior to the date of the meeting. In urgent situations, the person authorized to call the meeting may request other than as prescribed above, a deadline for notification of members of the Board of the date, hour and place of the meeting.
  • The minutes of meeting should be prepared in detail and should cover

discussions and debates including any voting and resolution that took place. These should be kept safe and in such a way so as to facilitate easy reference.

 

Board Material and Presentation

 

  • Information and data that is important to the Board’s understanding of the business should be distributed in writing to the Board before the Board meets. Management should make every attempt to see that this material is as brief as possible while still providing the desired information. As a general rule, presentation on a specific subject should be sent to the Board members in advance so that the Board meeting can be focused on questions that the Board may have about the subject. On those occasions where the subject matter is too sensitive to put on paper, the presentation should be discussed at the meeting.
  • The Board should be given sufficient information to exercise fully its governance functions. This information may come from a variety of sources, including management reports, personal observation, a comparison of performance to plans, security analysts’ reports, articles in various business publication, etc.

 

Attendance and Meeting

 

  • Directors are expected to attend the Company’s General Meeting, Board meetings and meetings of committees and subcommittees on which they serve, and to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities including preparation prior to the meeting.
  • The Board must meet at least four (4) times per year.
  • All Board members must attend at least half of all Board Meetings within a calendar year provided that the number of those present shall not be less than three, unless the company's by-laws provide for a larger proportion or number.
  • The Chairman and Vice Chairman of the Board may invite one or more members of Senior Management of the Company to be in regular attendance at Board Meetings and may include other Company’s officers and employees from time to time as appropriate under the circumstances.

 

Board Quorum

 

  • In accordance with Article 80 of the Companies Act, a Board Meeting shall be valid only if attended by at least one half of the Directors, provided that the number of those present shall not be less than three, unless the Company’s bylaws provide for a larger proportion or number. Further a Director may give proxy in writing to any other Director to attend the Board Meeting on behalf of him.

 

Minutes of Meetings

 

  • In accordance with Article 82 of Companies Act, any deliberation and resolution of the Board will be recorded in minutes. Such minutes shall be entered in a special register, which shall be signed by the Chairman and the Secretary.
  • Board Meetings shall be recorded by sequentially numbering the minutes of meeting, which shall reflect the course of proceedings at each Board Meeting and shall contain names and surnames of the persons present at the Board Meeting, the agenda of the meeting, the exact words of the adopted resolutions and issues, opinions, number of votes given to a particular resolution and dissenting opinions. The person preparing the minutes shall be appointed by the Secretary of the Board.
  • The minutes of Board Meeting, conducted using means of distance communications such as teleconference / video conference, shall be signed by all members of the Board taking part in this Board Meeting. The minutes should also mention that the Board members who were not present in person but were present via other means must have their vote noted in the minutes.

 

Conduct of Meetings

 

  • The Chairman shall determine the degree of formality required at each Board Meeting while maintaining the decorum of such Board Meetings. In any event the following general rules shall apply:
    • The Chairman will ensure that all members are heard.
    • The Chairman will also retain sufficient control to ensure that the authority of the Chair is recognized so that a degree of formality can be reintroduced when it is required to make progress.
    • The Chairman will take care that the decisions are properly understood and well recorded.
    • The Chairman will ensure that the decisions and debate are completed, with a reasonably formal resolution recording the conclusions reached.

 

Frequency of Meetings

 

  • The Board should be scheduled to meet formally at least once per quarter to address its responsibilities.

 

Succession Planning / Management Development

 

  • The Board in the effective discharge of its responsibilities also has to oversee succession planning and management development. Accordingly the following guidelines needs to be adhered to:
    • The President shall prepare an annual report on succession planning and management development to be presented to the Board.
    • In addition, the Chairman’s and the President’s recommendation as to a successor, in case he gets unexpectedly disabled, should be available at all times.
    • The Nomination & Remuneration and of the Board shall assist the Board in selecting, developing and evaluating potential candidates for Executive Officer positions, including that of the President, and oversee the development of Executive Officer succession plans.
    • The President shall also have, in place, at all times a confidential written procedures for the timely and efficient transfer of his or her responsibilities in the event of his or her sudden incapacitation or departure, including his or her recommendations for longer term succession arrangements. The President shall review this procedure periodically with the Nomination & Remuneration Committee.
    • The Nomination & Remuneration shall request recommendations and evaluations of the President with regard to potential successors for Senior Management positions.

 

Access to Management and Independent Advisors

 

  • In discharging its oversight role, the Board is empowered to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company and the power to retain outside counsel, auditors or consultants.
  • The Board may require any Executive Officer or employee of the Company or any of its subsidiaries, the Company’s outside legal counsel, and the Company’s external auditors to meet with the Board or any committee of the Board. The Board shall use discretion to assure that such contact is not distracting to the business operations of the Company and that any written contact be copied to the President.

 

Board Evaluation

 

  • The Board will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. The Nomination & Remuneration Committee of the Board shall oversee the annual self-evaluation of the Board which shall include an assessment of the performance and commitment of each individual Director to the activities of the Board. This evaluation shall be an important factor in determining the tenure of Directors as well as the skills and attributes desired in potential candidates for Directorship.

 

Evaluation of the President

 

  • The Board shall evaluate the President on his performance against objectives as established by the Board (including business results, achievement of strategy and other).
  • The President’s evaluation criteria shall be aligned with the long-term interest of shareholders.
  • The President shall be evaluated against a comparable peer group and significant portion of the President’s total compensation should be based on performance.

 

Relations with Shareholders

 

  • The Board shall develop, oversee and participate in shareholders relation program.
  • The Board shall treat all shareholders equally in terms of access to information.
  • The Chairman of the Board shall maintain sufficient contact with major shareholders to understand their issues and concerns and shall ensure that the views of shareholders are communicated to the Board as a whole. Nothing in these guidelines should be taken to override the general requirements of law to treat shareholders equally in access to information.
  • The Chairman of the Board, President, and other authorized Directors and investor relations personnel shall maintain a dialogue with representatives of institutional and other shareholders regarding long-term business strategies, financial performance and corporate governance in order to establish a mutual understanding of objectives.
  • The Company shall operate a structured program of investor relations, based on formal announcements and publications relating to significant events and financial results, in compliance with applicable laws, rules and regulations.
  • The Company shall appoint a Public Relations & Shareholder Relations Officer whose responsibility is to provide information and answer queries of stock exchange officials, shareholders and institutional investors.
  • Information about the Company including interim and full year financial results and other major announcements will also be published on the Company’s website.

 

Board Committees

 

  • The Board should establish the following committees to assist it in discharging its oversight responsibilities:
    1. Audit Committee
    2. Nomination & Remuneration Committee
    3. Governance & Corporate Social Responsibility Committee
    4. Investment Committee

 

  • The formation of committees subordinate to the Board of Directors shall be according to general procedures laid down by the Board, indicating the duties, the duration and the powers of each committee, and the manner in which the Board monitors its activities. The committee shall notify the Board of its activities, findings or decisions with complete transparency. The Board shall periodically pursue the activities of such committees so as to ensure that the activities entrusted to those committees are duly performed. The Board shall approve the by-laws of all committees of the Board.
  • A sufficient number of the Non-Executive members of the Board of Directors shall be appointed in committees that are concerned with activities that might involve a conflict of interest, such as ensuring the integrity of the financial and non-financial reports, reviewing the deals concluded by related parties, nomination to membership of the Board, appointment of Executive Directors, and determination of remuneration.
  • Other committees may be established from time to time by an affirmative vote of the majority of the Board.
  • The purpose and responsibilities of each committee are described in their respective committee charter.
  • Members of the committees shall be appointed by the Board upon the recommendation of the Nomination & Remuneration Committee and may be removed by the Board at its discretion.
  • Members of the committees shall meet the independence, experience and other requirements to the extent required under the applicable laws, rules and regulations.
  • No one other than the committee members shall be entitled to be present at a meeting of the committee, but others may attend at the invitation of the committee.