____________________________________________________________________________
Policy, Criteria and Procedures for
Nomination to Membership of the Board of Directors
____________________________________________________________________________
Title: Policy, Criteria, and Procedures for Nomination to Membership of the Board of Directors Procedure No.:
Issue Date: 18 / 04 / 2018 Author:
Version: 1.0
Page ( 1 ) of ( 8 )
Contents
1. Authority Reference 2. Subject
3. Purpose 4. Scope 5. References 6. Definitions
7. Procedures and criteria for nomination for membership of the Board of Directors 8. Publication, Effective Date and Amendment
Page ( 2 ) of ( 8 )
Authority Reference: Shareholders’ General Assembly
1- Subject: Policy, Criteria, and Procedures for Nomination to Membership of the Board of Directors
2- Purpose:
This policy aims at defining clear criteria and procedures required for nomination for membership of the Board of Directors (
BOD
) of the Company for Cooperative Insurance (Tawuniya
), hereinafter referred to as the “Company
”. The purpose is to ensure fairness and transparency for all candidates and to allow the opportunity to avail of the best and largest possible number of Saudi competencies qualified to participate in the company’s BOD.The policy has been prepared in accordance with the applicable laws and regulations issued by the relevant regulatory authorities in the Kingdom of Saudi Arabia as well as the company’s Articles of Association.
3- Scope:
This policy applies to candidates applying for membership of the BOD of the Company for Cooperative Insurance while they submit their nomination applications, whether they are members of the company’s board of directors or from outside the board.
4- References:
5-1 The Companies Law issued by the Ministry of Commerce and Investment.
5-2 The Corporate Governance Regulations issued by the Capital Market Authority.
5-2 The Insurance Companies Corporate Governance Regulation issued by the Saudi Arabian Monetary Agency.
5-4 The company Articles of Association.
Page ( 3 ) of ( 8 )
5- Definitions:
6-1 Board of Directors: The Board of Directors of the Company for Cooperative Insurance (
Tawuniya
).6-2 Members of the sub-committees: The members of the sub-committees of the Board of Directors.
6-3 The Committee: The Nomination and Remuneration Committee of the Company for Cooperative Insurance, which is one of the sub-committees of the Board of Directors of members appointed by the Board of Directors and is duly responsible for implementing this policy.
6-4 CMA: The Capital Market Authority.
6-5 SAMA: The Saudi Arabian Monetary Agency.
6-6 The Company: The Company for Cooperative Insurance (
Tawuniya
).6-7 The Assembly: The Shareholders' General Assembly of the Company for Cooperative Insurance.
Any terms or abbreviations used herein shall be construed in accordance with the definitions specified above. However, if some terms or abbreviations are not stated here, reference should be made to the list of abbreviations cited in the company’s internal Corporate Governance Policy and/ or the pertinent regulations issued by the Capital Market Authority and the Saudi Arabian Monetary Agency.
7. Procedures and criteria for nomination for membership of the Board of Directors The provisions contained in this policy do not prejudice the right of every shareholder in the company to nominate himself/ herself or other persons for the membership of the Board of Directors pursuant to the terms and conditions of the Companies Law and Executive Regulations. The Company management and the Nomination and Remuneration Committee shall follow the below procedures when opening the door for candidacy for membership of the Board of Directors:
7-1 The Nomination and Remuneration Committee (hereinafter referred to as the
“Committee”) in the Company for Cooperative Insurance must announce on its website of the Capital Market, hereinafter referred to as (“
Tadawul
”) and on the company’s website and through any other means specified by CMA in order to invite those persons interested in nomination for the membership of its Board of Directors from among those who fulfill the membership requirements and qualifications for the new three-year period session of the Board, in accordance with the terms, conditions and controls set forth In the regulations and circulars ofPage ( 4 ) of ( 8 )
the Ministry of Commerce and Investment and the Corporate Governance Regulation issued by the Saudi Arabian Monetary Agency, the Corporate Governance Regulation issued by the Capital Market Authority, taking into account the following:
7-1-1 The candidate should have adequate experience, honesty and high managerial skills that contribute to enhancing the Company's leading role.
7-1-2 The candidate should not be a member of a board of directors, a member of a board sub-committee, or occupy any of the leading positions in another Saudi insurance and/or reinsurance company.
7-1-3 The approval of SAMA to the candidate membership.
7-1-4 The candidate should not have been convicted of by judicial verdict or a crime of dishonesty and honor.
7-1-5 He/ she should not be a government employee, unless he/ she is a representative of a government entity, companies established by the State, or persons of public legal status.
7-1-6 The candidate should not be insolvent or bankrupt.
7-1-7 The candidate has not engaged in a contrary behavior in financial markets or business.
7-1-8 The candidate shall not be involved as a member of a board of directors of more than five listed companies simultaneously.
7-1-9 The candidate should have scientific and practical experience.
7-1-10 The candidate must be in compliance with the provisions of the applicable rules, regulations and instructions.
7-1-11 The candidate shall be committed to allocating sufficient and appropriate time to carry out his/ her competence and duties towards membership.
7-1-12 The candidate shall enjoy independence and non-conflict of interest.
7-2 The company shall open the door for nomination at least 60 days before the end of the Board’s session, and such nomination must remain open for at least one month from the announcement date.
7-3 Anyone desires to nominate himself/ herself for membership of the company’s Board of Directors shall notify the company’s management at the date specified in the announcement issued by the company. This notification shall include a clear definition of the candidate in terms of his/ her resume, comprising information about his/ her profession, the actual position currently occupied, previous and current experience, qualifications and specific experience in the field of the company's business.
Page ( 5 ) of ( 8 )
7-4 Any candidate who has previously served as a board member of a shareholding stock company shall attach a statement indicating the number and dates of the boards of directors of the companies to which he has been a board member. If he is a member of the company’s Board of Directors, he must attach a statement to the nomination notification from the company management on the last session attended as a member of the Board, including the following information:
7-4-1 The number of Board meetings held during each year of the Board session, the number of meetings attended by the member in person and the percentage of his attendance to the total number of meetings held.
7-4-2 The standing committees in which the member participated, the number of meetings held by each one of those committees during each year of the Board session, the number of meetings attended and the actual percentage of his attendance out of the total meetings held.
7-4-3 A summary of the financial results realized by the company during each year of the Board session.
7-5 Any one desires to nominate himself/ herself for membership of the Board of Directors shall evidently disclose to the Board and the General Assembly any cases of conflict of interest - in accordance with the procedures established by CMA, including:
7-5-1 If he/ she has a direct or indirect interest in the businesses and contracts executed for the Company’s account.
7-5- If he/ she engages in a business where he competes with the Company, or conducting businesses in any of the company's activities.
7-6 Filling out the fit and proper application form issued by the Saudi Arabia Monetary Agency. The form can be obtained through the website of the company or that of the Saudi Arabian Monetary Agency.
7-7 Filling out the Disclosure Form No. (3) issued by the Capital Market Authority. The form can be obtained through the website of the company or that of the Capital Market Authority (
www.cma.org.sa
).7-8 Attach a clear copy of the National, Family Record, contact information of the candidate, including at least the candidate's national address, mobile phone number, land-line number, and e-mail address.
7-9 All nomination applications submitted along with their attachments are collected from the necessary documents and then sent to the Nomination and Remuneration Committee.
Page ( 6 ) of ( 8 )
7-10 The Committee must review and examine the submitted applications and their attachments of the documents necessary for nomination in accordance with this Policy and recommend to the Board of Directors of the members who meet the nomination requirements and membership criteria, The Committee shall document all relevant observations and recommendations.
7-11 In case the candidate does not fulfill the necessary requirements as stipulated in this Policy, including inability to provide the information needed within the required deadline, the Committee shall have the right to reject and save the nomination application, provided that SAMA is provided with a statement on the reasons for such rejection.
7-12 The Committee shall inform the Compliance Department in the company of its recommendation to obtain the approval of SAMA before reviewing the recommendation by the Board.
7-13 The Committee must submit its recommendations on the candidates along with the approval letter of SAMA to the Board for ratification and to submit the same to the General Assembly, taking into account the necessity that the number and names of the candidates nominated for membership of the Board of Directors put before the General Assembly shall exceed the number of seats available so that the General Assembly has the opportunity to choose between them. The availability of a sufficient number of independent candidates must be observed too.
When the sufficient number of candidates does not exist, the Board may seek the services of an independent and specialized external third party to designate additional candidates for Board membership.
7-14 In case the candidate fulfills the necessary requirements and obtains the approval of the relevant regulatory authorities, the company must announce on Tadawul website the information of the candidates nominated for membership of the Board of Directors at least ten days before the date of the General Assembly meeting.
7-15 The company's management shall file the nomination notification and its attachments at its Head Office within the reach of its shareholders fifteen days before the date set for electing the members of the Board of Directors together with sending copies of it on the same date to the company General Administration, in addition to a list of candidates names.
7-16 Voting in the General Assembly is confined to those who have nominated themselves for membership of the Board in accordance with the above requirements, criteria and controls whom the Board of Directors approved their nomination for membership of the Board after obtaining the necessary prior approvals of the regulatory authorities.
7-17 The cumulative voting method must be adopted when voting in the General Assembly on the nomination for membership of the Board.
Page ( 7 ) of ( 8 )
7-18 The company, after electing the members of the Board of Directors for the new term, shall notify SAMA and CMA, the names of the members of the Board of Directors elected within five working days from the date of their election, and any changes to their membership within five working days of the date the change occurred. This is based on official letters in addition to completing disclosure forms.
Relevant (the Commission forms No. 5 and No. 7 and the institution's model for appropriate standards in If required).
8- Publication, Effective Date and Amendment:
The contents of this Policy shall be effective as of its ratification by the shareholders General Assembly and must be circulated to the relevant parties for perusal. In case the Committee deems it appropriate to amend this Policy, it shall present the proposed amendments to the Board of Directors for approval in preparation to be presented before the shareholders’ General Assembly of the company at the first meeting following their approval.
Page ( 8 ) of ( 8 )
