SUMMARY OF RISK FACTORS
D- Risks Related to the Offer Shares
5. ORGANIZATIONAL STRUCTURE AND CORPORATE GOVERNANCE
5.1 Board Members and Secretary
5.1.2 Responsibilities of the Board of Directors
The responsibilities of the Chairman, members and Secretary of the Board of Directors include the following:
5.1.2.1 Board of Directors
In accordance with the bylaws, the Board of Directors is vested with the fullest powers to run the Company on a day-to-day basis. Under the Company’s Corporate Governance Manual, the Board of Directors has the following responsibilities:
■ Developing the Company’s plans, policies, strategies and main objectives, as well as periodically overseeing their implementation, reviewing them, and ensuring the availability of the necessary human and financial resources to achieve the same, including:
- Developing, reviewing, and guiding the Company’s comprehensive strategy, main business plans and risk management policy.
- Determining the optimal capital structure of the Company, its strategies and financial objectives, as well as approving annual budgets.
- Overseeing the Company’s capital expenditures and the ownership and disposal of assets.
- Setting performance objectives and monitoring the Company’s overall performance.
- Periodically reviewing and adopting the Company’s organizational and human resource structures.
- Ensuring the availability of the human and financial resources necessary to achieve the Company’s main objectives and plans.
■ Developing and overseeing internal control systems and regulations:
- Developing a written policy to regulate conflicts of interest and address possible conflicts of interest by directors, executive management and shareholders, including misuse of Company assets and facilities, and misconduct resulting from transactions with related parties.
- Ensuring the integrity of the financial and accounting systems used, including relevant financial reporting systems.
- Ensuring that appropriate risk management systems are in place by identifying the overall risks that the Company may face, cultivate a risk-aware environment at the Company, and transparently presenting such risks to the stakeholders and Related Parties.
- Annually reviewing the effectiveness of the Company’s internal control procedures.
- Establishing and adopting clear and specific policies and criteria for Board membership subject to General Assembly approval.
- Developing a written policy governing the relationship with stakeholders.
- Developing policies and procedures to ensure that the Company complies with laws and regulations, while remaining committed to disclosing material information to the shareholders and stakeholders, as well as ensuring that the executive management comply with the same.
- Overseeing the Company’s financial management, cash flow, and financial and credit ties with third parties.
■ Proposing to the Extraordinary General Assembly what they may deem fit regarding the following:
- Increasing or decreasing the Company’s capital.
- Resolving to dissolve the Company before the term set forth in the Bylaws is up or otherwise continuing it thereafter.
■ Proposing to the Ordinary General Assembly what they may deem fit regarding the following:
- Using the Company’s provisional reserve, if formed by the Extraordinary General Assembly and not allocated for a specific purpose.
- Building up additional reserves or financial allocations for the Company.
- Determining the method of distributing the Company’s net profits.
- Preparing and approving the Company’s initial and annual financial statements before their circulation.
- Preparing and approving the Board of Directors’ report before its circulation.
- Ensuring the accuracy and integrity of the data and information to be disclosed, in accordance with the applicable disclosure and transparency policies and laws.
- Establishing effective communication channels that continuously and periodically grants shareholders access to the various aspects of the Company’s activities and any material developments.
- Forming specialized committees derived therefrom pursuant to resolutions specifying such committees’
term, powers and responsibilities, as well as the method the Board will adopt to oversee them, provided that such resolution indicates the name of the committee members and their obligations, rights and duties; and evaluating the performance and work of such committees and their members.
- Determining the kinds of remunerations granted to the Company’s employees, such as fixed remunerations, performance-related bonuses, and bonuses in the form of shares, in accordance with the provisions concerning Joint Stock Companies in the Companies Law for Closed.
- Setting the values and standards that govern work in the Company.
5.1.2.2 Chairman of the Board
The responsibilities of the Chairman of the Board of Directors revolve around leading the Board and facilitating constructive contributions and initiatives by all Board members to ensure that the Board is effective in performing its functions as a whole through the exercise of its duties and responsibilities.
In accordance with the Bylaws, the Chairman is granted extensive powers of representation before various governmental authorities. Under the Corporate Governance Regulations, the Chairman’s main responsibilities include:
■ Ensuring that the Board members obtain complete, clear, accurate and non-misleading information in due course;
■ Ensuring that the Board effectively discusses all fundamental issues in due course;
■ Encouraging the Board members to effectively perform their duties in order to achieve the interests of the Company;
■ Ensuring that there are actual communication channels with shareholders and conveying their opinions to the Board;
■ Encouraging constructive relationships and effective participation between the Board and the Senior Executives on the one hand, and the Directors on the other hand, and creating a culture that encourages constructive criticism;
■ Preparing agendas of the Board meetings, taking into consideration any matters raised by Board members or the external auditor and consult with the Board members and the Managing Director upon preparing the Board’s agenda; and
■ Convening periodic meetings with the Non-Executive Directors without the presence of any executive officers of the Company.
■ Notifying the Ordinary General Assembly, during its meetings, of the businesses and contracts in which any Board member has any direct or indirect interest. Such notice shall indicate the nature and limits of the interest, the names of all concerned parties, and the benefit expected to be obtained, directly or indirectly, from such interest, whether financial or otherwise. Pursuant to the Companies Law and its implementing regulations, the member holding such interest may not participate in voting on resolutions to be adopted in this respect. Furthermore, a special report prepared by an external auditor shall be attached to said notice.
5.1.2.3 Duties of the Independent Member
Subject to the duties of the members of the Board of Directors mentioned in the Corporate Governance Manual, the independent member of the Board of Directors shall actively participate in the performance of the following tasks:
■ Expressing an independent opinion on strategic issues, the Company’s policies and performance, and the appointment of members of the executive management.
■ Verifying that the interests of the Company and its shareholders are taken into account and flagging any conflict of interest that occurs.
■ Supervising the development of the Company’s corporate governance rules, and monitoring the implementation thereof by the executive management.
■ Attending all Board meetings in which important and fundamental decisions affecting the Company’s position are taken.
5.1.2.4 Secretary of the Board
The Secretary of the Board of Directors shall be responsible for organizing the meetings of the Board. In addition to the other duties assigned by the Board of Directors to the Secretary, and under the Company’s Corporate Governance Manual, the main responsibilities of the Secretary of the Board of Directors include the following:
■ Supervising the procedures for holding meetings.
■ Ensuring that the meetings are quorate as per the applicable laws during the course of Board activities;
■ Ensuring the implementation of the legal procedures relating to holding and conducting meetings, especially with regard to voting and issuing resolutions;
■ Ensuring that equality and transparency are exercised with all Board Members with regard to obtaining information;
■ Following up the implementation of the Board’s resolutions;
■ Documenting the Board meetings and preparing minutes therefor, which shall include the discussions and deliberations carried during such meetings, as well as the place, date, times on which such meetings commenced and concluded; recording the decisions of the Board and voting results and retaining them in a special and organized register, and including the names of the attendees and any reservations they expressed (if any); and getting such minutes signed by all of the attending members;
■ Retaining the reports submitted to the Board and the reports prepared thereby;
■ Providing the Board members with the agenda of the Board meeting and related worksheets, documents and information and any additional information, related to the topics included in the agenda items, requested by any Board member;
■ Notifying the Board members of the dates of the Board’s meetings within sufficient time prior to the date specified for the meeting;
■ Presenting the draft minutes to the Board members to provide their opinions before signing the same;
■ Ensuring that the Board members receive, fully and promptly, a copy the minutes of the Board’s meetings as well as the information and documents related to the Company;
■ Coordinating among the Board members;
■ Regulating and periodically updating the disclosure register of the Board and Executive Management as per disclosures required under the Companies Law; and
■ Providing assistance and advice to the Board members.
5.1.2.5 Chief Executive Officer
The Chief Executive Officer shall perform the duties assigned thereto faithfully and properly, in the interest of the Company and all Shareholders, rather than for a certain group thereof. The Chief Executive Officer and the Senior Executives shall not engage in any business that may lead to any conflict of interest with the Company. In the event that such conflict of interest occurs, the Chief Executive Officer and the Senior Executives shall disclose such conflict to the Board, as per the policies adopted by the Company in this regard.