م7102
Board Membership
Policies, Criteria and Procedures
ARABIA INSURANCD COOPERATIVE COMPANY
Ordinary General Meeting 4/6/2017
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Article (1): Formation of the Board of Directors:
I. Board Composition:
a) The Company’s Articles of Association shall specify the number of members of the Board of Directors (the “Board”), provided that, on a permanent basis, it shall not be more than eleven (11) and not less than five (5).
b) The Board composition shall reflect adequate representation of Independent Members. In all cases, the number of Independent Board Members may not be less than two (2) or a third of the Board members.
c) The majority of the Board members shall be of Non-Executive Directors.
d) The Board shall collectively have diversity in terms of qualifications, knowledge, experience and skills in the various areas of the Company's business.
II. Board Membership Conditions and Criteria:
a) Each member shall have an appropriate level of qualification, knowledge, experience, skill, integrity and independence to undertake their role and responsibilities effectively.
b) Members shall, in general, have competence, foresight, a strategic vision, good administrative perceptions, a capacity for management and supervision, awareness of legal and financial aspects and, in particular, familiarization with the Company’s business and activities.
c) A Board member shall have leadership skills that qualify them to grant powers in a way that leads to motivating performance, applying effective management best practices and adhering to professional values and ethics.
d) A Board member shall have no health issue that prevents them from exercising their duties and responsibilities.
e) A Board member shall not serve as a member of the boards of directors of more than five (5) listed joint-stock companies at the same time.
f) A member of the Company’s Board of Directors may not be a member of the board of directors of another local insurance and/or reinsurance company or a committee thereof or hold a leadership position in such a company.
g) Except with the prior written approval of SAMA, no person may be nominated for Board membership who held the same position in a company that has been liquidated or was removed from the same position in another company.
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h) The Company may specify in writing the qualifications, experience and skills that members must have.
i) The Company shall exercise due diligence to ensure that the criteria adopted are met by the current and/or new members.
Article (2): Appointment of Board of Directors Members:
First: Nomination:
The Procedures for Nominating Members of the Board of Directors shall consider the following:
(a) The company shall publish the nomination announcement on the company’s website and the CMA’s website as well as in any other means determined by the Authority or any other supervisory authority in order to invite persons wishing to run for membership in the Board, provided that the nomination window shall remain open for at least one month from the date of the announcement.
(b) Any shareholder of the company shall be entitled to nominate himself or someone else for the membership of the Board of Directors pursuant to the provisions of the Companies Law and the Implementation Regulations thereof.
(c) Both of the Remuneration Committee and the Nomination Committee shall, when nominating members of the Board of Directors, take into account the provisions stated herein, the provisions of the Insurance Companies Governance Regulations, the updated Companies Governance Regulations, and the requirements determined by the Saudi Arabian Monetary Agency and the Capital Market Authority.
(d) The Nomination and Remuneration Committee shall study the applications for nomination for membership of the Board of Directors and document all relevant observations and recommendations.
(e) The Saudi Arabian Monetary Agency’s written no-objection shall be obtained before electing any of the board members.
(f) The company shall inform the Saudi Arabian Monetary Agency when any of the applications for nomination for membership of the Board is rejected, and specify the reasons for the rejection.
(g) The number of candidates for the Board of Directors whose names are presented to the General Assembly shall exceed the number of seats available so that the Assembly may have the opportunity to choose from among the candidates. The Board of Directors may, if there is no adequate number of candidates, use the service of an independent,
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specialized third party to specify additional candidates for membership of the Board of Directors.
(h) The company shall, when publishing or sending the invitation to hold the General Assembly, announce information about the candidates for membership of the Board of Directors on the CMA’s website, provided that such information shall include a description of the candidates’ experiences, qualifications, jobs as well as their previous and current memberships. The company shall provide a copy of such information at its head office and on website.
Second: Appointment:
(a) The General Assembly shall elect the members of the Board of Directors for the period stated in the company’s Articles of Association, provided that such period shall not exceed three years, and they may always be re-elected unless the Articles of Association states otherwise.
(b) The cumulative vote shall be used in electing the Board of Directors, so that the right to vote for a share may not be used more than once.
(c) Voting in the General Assembly shall be limited to candidates for membership of the Board of Directors whose information the company has announced in accordance with Paragraph (h) of Clause First of this Article.
(d) The Authority and CMA shall be notified immediately of the election results after the end of the Assembly in accordance with the Capital Market Law and the Implementing Regulations thereof.
(e) The Authority shall be notified of the names of the members of the Board of Directors and their membership descriptions within five working days from the date of the beginning of the term of the Board of Directors or from the date of their appointment, whichever is earlier, and any changes that occur to their membership within five working days from the date of the occurrence of such changes.
(f) After appointment, the members of the Board shall attend an orientation program and each member shall be provided with a letter of appointment specifying his duties and responsibilities, in addition to comprehensive information about the company’s business and strategic plans, and the relevant laws and regulations.
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(g) After being appointed, Board members shall ensure that they are aware of the latest organizational developments and shall participate in training programs organized by the company as required.
Article (3): Termination of Membership:
(a) The membership of the Board of Directors shall terminate pursuant to the provisions of the company's Articles of Association.
(b) The Ordinary General Assembly may, at any time, dismiss all or some of the members of the Board, even if the company’s Articles of Association states otherwise, without prejudice to the right of the dismissed to be compensated in case the dismissal occurs for an unjustified reason or at an inappropriate time.
(c) The General Assembly may, upon the recommendation of the Board of Directors, terminate the membership of any of its members who fail to attend three consecutive meetings of the Board without a legitimate excuse.
(d) The company shall inform the Saudi Arabian Monetary Agency of any member's resignation or termination of his membership within (5) working days from the date of resignation or termination.
(e) Upon termination of the Board of Directors membership by one of the membership termination methods, the company shall immediately notify the Capital Market Authority with a statement of the reasons for doing so.
(f) If a member of the board of directors, who has comments on the company’s performance resigns, he shall submit a written statement of such comments to the chairman of the Board of Directors. Such statement shall be presented to the Board of Directors.
Article (4): Vacancy in the Board:
(A) In case the position of a member of the Board of Directors becomes vacant, the Board may appoint, temporarily, a member in the vacant position, from among those who have sufficient experience and after obtaining the Saudi Arabian Monetary Agency's no-objection and without considering the arrangement for obtaining votes in the General Assembly that elects the Board of Directors. The Capital Market Authority shall be informed of same within five (5) working days from the date of appointment.
Such appointment shall be presented to the Ordinary General Assembly in its first meeting. The new member shall complete the term of his predecessor only.
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(b) By a decision from the competent authority, Ordinary General Assembly may be convened in the event that the members of the Board of Directors do not meet the minimum quorum required for its convening.
Article (5): General Provisions:
These policies and standards shall be effective from the date of being approved by the General Assembly, and shall supersede Board of Directors Membership Policies Standards, and Procedures approved by the Ordinary General Assembly on 05/05/2010.
