Sinad Holding Co.
Policies, Standards and Procedures
For Membership in the Board of Directors
Article (1) Preamble:
1/1 This document regulates the policies, standards and procedures for membership in the Company's Board of Directors.
1/2 This Policy shall be subject to the provisions of the Companies' Law, the Capital Market Law and their executive regulations, the provisions of the Company's Articles of Association, the Listing Rules, the Corporate Governance Regulations (CGR) of Joint-Stock Companies listed in the Saudi Capital Market Authority (CMA) and the Corporate Governance Regulations. It is guided by the best practices in proportion to the nature of the Company's activity and operations.
1/3 The Executive Management of the Company shall provide the members of the Board of Directors, the non-executive members in particular, and the Company's committees with all necessary information, data, documents, and records, provided that they are complete, clear, correct, not misleading, and are finished in a timely manner to enable them to perform their duties and tasks.
1/4 Members of the Board of Directors and of its committees, and senior executives in the Company, shall exercise their powers and carry out their duties in the interest of the Company.
1/5 They shall fully comply with the provisions of Law when exercising their membership duties in the Board, and they shall refrain from undertaking or participating in any act that constitutes miscarriage of the management of the Company's affairs.
Article (2) Definitions:
For the purpose of implementing the provisions of this Policy, the words and phrases mentioned below shall have the meanings assigned thereto, unless the context states otherwise:
Policy: The Board membership policies, standards and procedures.
Company: Sinad Holding Co.
Board: The Company’s Board of Directors
Board member: A member of the Company’s Board of Directors.
Non-executive member: A Board member who neither works on a full-time basis in managing the Company nor participates in its daily business.
Independent member: A non-executive Board member who is completely independent in his position and decisions, and to whom none of the independence barriers stipulated in the Corporate Governance Regulations applies.
Authority: Capital Market Authority (CMA)
Exchange: Saudi Stock Exchange (Tadawul)
General Assembly: The Company’s General Assembly (Ordinary or Extraordinary) which is constituted of the Company’s shareholders in accordance with the provisions of the Law.
Corporate Governance Regulations: The Corporate Governance Regulations for Joint-Stock Companies listed on the Market, issued by the CMA's Board pursuant to Resolution No. (8-6-2017), dated 16/05/1438 AH corresponding to 02/13/2017 AD.
Articles: The Company's Articles of Association, the CMA Law and its Implementing Regulations, Companies’ Law and its Implementing Regulations, and any relevant instructions or decisions issued by the CMA or by any regulatory or supervisory authority.
Article (3) Policies and Standards for Membership in the Company’s Board of Directors:
The Board member is required to have professional competence, the necessary experience, knowledge, skill and independence to enable him to exercise his duties efficiently and proficiently, provided that the General Assembly, when electing Board members, takes into account the recommendations of the Company’s Nomination and Remuneration Committee, and the availability of the personal and professional components necessary for them to perform their duties effectively. The Nomination and Remuneration Committee shall take into consideration the terms and conditions of the Corporate Governance Regulations, and the requirements determined by the Authority when nominating Board members, who shall, in particular, meet the following requirements : 3/1 The nominee for membership of the Board shall not have been
previously convicted of a crime against honor and honesty, and he shall not be insolvent or bankrupt, or become ineligible for membership of the Board in accordance with any law or instructions in force in the Kingdom.
3/2 The Board member shall not be a member of the board of directors in more than five joint-stock companies listed on the Market at the same time.
3/3 The Board member represents all the shareholders of the Company.
He shall be committed to achieving the interest of the Company and of the shareholders, and observe the rights of other stakeholders, not only the interest of the group that elected him.
3/4 There shall be at least (3) independent members, representing one third of the Board members, as the Company’s Board of Directors consists of (9) members.
3/5 The independent member must have complete independence in his position and decisions, and none of the barriers of independence stipulated in Article (20) of the Corporate Governance Regulations shall apply to him.
3/6 Ability to lead: The Board member shall have leadership skills that qualify him to grant powers, leading to performance motivation, applying best practices in the effective management industry, and adherence to professional values and ethics.
3/7 Competence: The Board member shall have the academic qualifications, appropriate professional and personal skills, level of training, and practical experience related to the Company's current and future activities or to management, economics, accounting, law or governance, as well as the desire to learn and train.
3/8 Directing ability: The Board member shall have technical, leadership and administrative capabilities, fast decision-making, and assimilation of the technical requirements related to the workflow. He shall have the ability of strategic direction and planning with clear future vision.
3/9 Financial knowledge: He shall be able to read and understand financial statements and reports.
3/10 Wellness: He shall not have a health impediment that hinders him from carrying out his duties and responsibilities.
3/11 The nominee for membership of the Board shall abide by the principles of honesty, sincerity, loyalty, diligence and care for the interests of the Company and shareholders, and he shall prioritize them over his personal interest; these principles shall include the following in particular:
a) Sincerity: The Board member’s relationship with the Company shall be an honest professional relationship, and he shall disclose to the Company any influential information before executing any deal or contract with the Company or one of its subsidiaries.
b) Loyalty: The Board member shall avoid transactions that involve a conflict of interest, while verifying the fairness of dealing, and observing the provisions relating to conflict of interests set out the Corporate Governance Regulations.
c) Diligence and care: By performing the duties and responsibilities contained in the Articles.
3/12 Diverse scientific qualifications and practical experience should be taken into consideration, and priority in nomination should be given to those who have the appropriate skills for membership of the Board.
Article (4) Eligibility and Procedures of Nomination to Membership of the Board:
4/1 Each shareholder has the right to nominate himself or one or more other persons for membership in the Board, within the limits of his percentage ownership in the capital.
4/2 The Nomination and Remuneration Committee shall coordinate with the Company’s Executive Management to announce the opening of the nomination for membership in the Company’s Board of Directors at least sixty (60) days before the end of the Board’s term and in light of the requirements of the regulations and laws.
4/3 The Company shall publish the nomination announcement on the website of the Saudi Stock Exchange (Tadawul) and on the Company’s website, and through any other means prescribed by the Authority, to invite the persons willing to be nominated to membership of the Board, provided that the nomination shall remain open for at least one month as of the date of the announcement.
4/4 The Nomination and Remuneration Committee shall submit its recommendations to the Board regarding the nomination for membership of the Board, in accordance with the criteria set forth in this Policy.
4/5 Whoever wishes to nominate himself for membership of the Company’s Board of Directors must disclose his desire for nomination, upon a notification submitted to the Company’s Management in accordance with the period and dates stipulated in this Policy and applicable rules and regulations. This notification must include an introduction to the nominee in the Arabic language in terms of his resume information, including information about his profession, the main job he currently occupies, his qualifications and practical experience; in addition to providing the Company with all supporting documents, such as (National ID Card, Family Card, passport for non- Saudis who are nominees for membership in the Board), and any other related documents required by the Company to fulfill statutory requirements).
4/6 The nominee for the membership of the Board must disclose to the Board and the General Assembly any cases of conflict of interest, in
accordance with the Authority’s established procedures; such cases include:
a) Having a direct or indirect interest in the business and contracts that are made with the company for membership of the Board of which he wishes to run.
b) His participation in a business that would compete with the Company, or compete with a sub-activity of the main activity that it is engaged in.
4/7 Applicants for membership of the Board must fill out the form or forms specified by the Capital Market Authority, which can be obtained through the Authority's website.
4/8 The nominee who has previously served as a board member of a joint stock company must attach a statement of the number of boards of directors of companies where he was a member, together with the relevant dates.
4/9 The nominee who has previously served as a member of a company’s board must attach to the nomination notification a statement from the company’s Management about the last term during which he became a board member, including the following information:
a) The number of board meetings that took place during each year in office.
b) The number of meetings that the member attended in person, and his attendance rate out of the total meetings.
c) The standing committees in which the member participated, the number of meetings held by each of those committees during each year in office, number of meetings attended, and his attendance rate out of the total meetings.
4/10 The nominee must indicate the membership capacity, i.e. whether the member is an executive, non-executive or an independent member.
4/11 The nominee must clarify the nature of the membership, i.e. whether the member is a candidate in his personal capacity or is a representative of a legal person.
4/12 The Nomination and Remuneration Committee coordinates with the Executive Management to finalize statutory requirements and provide the competent official authorities with all the required documents.
4/13 Cumulative voting shall be used for electing the Board of Directors, so that the right of a voting share may not be used more than once.
4/14 Voting in the General Assembly is limited to nominees for membership of the Board whose information is announced by the Company.
Article (5) Expiry of the Membership of a Board Member, and Vacancy of a Position:
5/1 The Board membership shall expire upon the expiry of its prescribed term, which is three years from the date of the member being elected by the General Assembly.
5/2 The membership of a Board member shall be terminated in accordance with any applicable laws or regulations in the Kingdom, or due to his death or resignation, or if convicted of a crime against honor and honesty. However, the Ordinary General Assembly may, at any time, remove all or any of the Board members, without prejudice to the right of the removed member to hold the Company liable if the removal is made without acceptable justification or at an improper time. A Board member may retire, provided that such retirement is made at a proper time; or otherwise, he shall be responsible to the Company for damages resulting from such retirement.
5/3 The General Assembly may, upon the recommendation of the Board, terminate the membership of a member who has been absent from three consecutive Board meetings without a legitimate excuse.
5/4 In the event of losing his eligibility to serve as a Board member, or becoming unable to carry out his work or to allocate the necessary time or effort to perform his duties in the Board, the Board member shall resign before the end of his term in the Board of Directors. While in case of a conflict of interest, the Board member shall have the option to obtain a license, to be renewed each year, from the General Assembly, or to submit his resignation.
5/5 Nominating a replacement member for a vacant position in the Board upon the expiry of the membership of one or more members:
a) The Nomination and Remuneration Committee shall nominate a member to the Board vacant position in place of the member whose membership has expired, in accordance with these policies and standards.
b) The Board will study the recommendation of the Nomination and Remuneration Committee and approve the temporary appointment of one or more Board members, as the case may be.
c) The temporary appointment of one or more members, as the case may be, shall be presented in the first General Assembly following the approval of the appointment.
Article (6) General Provisions:
6/1 The Board of Directors may review this Policy when necessary with the aim of continuous development and improvement, and to keep pace with any amendments that may occur to the articles of Companies' Law, in order to realize the best professional practices.
6/2 This Policy shall not be amended except by a proposal or recommendation from the Board of Directors and subject to the approval of the General Assembly.
6/3 The Company may publish this Policy, or a summary thereof, on its website or by any other means.
6/4 In the event this Policy has not been published on the Company's website, every shareholder has the right to view it at the Company's offices in prior coordination with the Company's Management.
6/5 The Board of Directors is entitled to explain or clarify the provisions of this Policy.
6/6 This Policy shall not replace the provisions to the articles of Companies' Law and its Executive Regulations. In cases where there is no provision therefor, reference shall be made to the articles of Companies' Law, and in the event of any conflict between this Policy, or any paragraph or section therein, the provisions to the articles of Companies' Law shall prevail, and the other paragraphs and sections remain enforced.
6/7 This Policy shall be effective as of the date of its approval by the Company's General Assembly.
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