What are the Independent Director Duties?
In respect to Article (30) of these Regulations, an Independent Director of the Board shall effectively participate in the following duties:
1) expressing his/her independent opinion in respect of strategic issues and the Company’s policies and performance and appointing members of the Executive Management;
2) ensuring that the interest of the Company and its shareholders are taken into account and given priority in case of any conflicts of interest;
3) overseeing the development of the Company’s Corporate Governance rules, and monitoring the implementation of the rules by the Executive Management.
What is the Concept of the Competing Businesses?
The following shall be deemed a participation in any business that may compete with the Company or any of its activities:
1) the Board members’ establishing a company or a sole proprietorship or the ownership of a controlling percentage of shares or stakes in a Company or any other entity engages in business activities that are similar to the activities of the Company or its group.
2) accepting membership in the Board of a Company, an entity that competing with the Company or its group, or managing the affairs of a competing sole proprietorship or any competing company of any form.
3) the Board member’s acting as an overt or covert commercial agent for another company or entity competing with the Company or its group.
Can a Company combine remuneration and nomination committees into one committee?
A Company may combine remuneration and nomination committees into one committee named remuneration and nomination committee. In such case, the remuneration and nomination committee must satisfy the requirements related to any of them as set forth in Chapter 3 and 4 of Part 4 of the Corporate Governance Regulations, and exercise all the powers set forth in Article (61) and (65) of Corporate Governance Regulations, provided that the committee convenes periodically at least every six months.
For how long and where shall a company retain the documents required to be retained under the Corporate Governance Regulations?
A Company shall retain all minutes, documents, reports and other papers required to be maintained in the Company's head office for at least ten years as per these Regulations. This shall include the Board report and audit committee report. Without prejudice to this period, a Company, in case of any lawsuit (filed or threatened to be filed) or ongoing claim or any investigation relating to those minutes, documents, reports and other papers, shall maintain them until the end of the ongoing lawsuit, claim or i
How shall the company announce the place, date and time of the assembly?
After obtaining a non-objection from the Authority, the company shall announce the date, place and agenda of the General Assembly at least ten days prior to the date thereof; the invitation shall be published on the website of the Exchange, the Company's website and in a daily newspaper distributed in the province where the Company's head office is located and in accordance with the Instructions for listed companies announcements. The Company may invite for a General and\or Special Shareholders' Assemblies to convene using methods of modern technologies.
When shall a General Assembly, of a Company, convene?
Paragraph (b) of Article (13) of the Corporate Governance Regulations stipulates that: "The Ordinary General Assembly shall convene at least once per year within the six months following the end of the Company's financial year." and paragraph (c) of Article (13) of the Corporate Governance Regulations stipulates that:" The General and Special Shareholders' Assemblies shall convene upon an invitation from the Board in accordance with the situations stated in the Companies Law and Its Implementing Regulations and the Company’s bylaws. The Board shall invite the Ordinary General Assembly to convene upon the request of the external auditor, the audit committee or a number of shareholders holding shares equal to at least (5%) of the share capital of the Company. The external auditor may invite the Assembly to convene if the Board does not invite the Assembly within thirty days from the date of the external auditor's request."
What is the quorum for holding the Ordinary General Assembly of a Company?
The Ordinary General Assembly will be valid if attended by shareholders representing a quarter of the Company's capital at least, unless the Company's bylaws did not provide a highest percentage, but provided that no more than half. If such quorum is not available, a second meeting shall be convened at least (30) days after the first meeting. However, the second meeting may be held one hour after the end of the period specified for the first meeting, provided that such bylaws permits that, and the call for the convening of the first meeting include the announcement stating the possibility of holding such a meeting. In all cases, the second meeting shall be valid regardless of the number of shares represented therein, in accordance with Article 93 of the Companies Law.
When is the shareholder entitled to receive his/her share of dividends of a Company that announces cash dividends or stock split?
Paragrapg (c) of Article (9) of the Corporate Governance Regulations stipulates that: "the shareholder is entitled to receive his/her share of dividends as per the decision of the General Assembly in respect of the distribution of dividends to shareholders or the Board resolution on distributing interim dividends. The resolution shall specify the record date and the distribution date provided that the resolution shall be executed as per the Regulatory Rules and Procedures issued pursuant to the Companies Law related to Listed Joint Stock Companies."
What are the Competencies of the Ordinary General Assembly and the Extraordinary General Assembly?
Each type of Assembly has specific competencies and can be founded in Articles 11 and 12 of the Corporate Governance Regulations.
What are the procedures to be followed in the event of a shareholder desire to run for membership in the board of directors of a listed company?
In the event of a shareholder desire to run for membership, a nomination announcement shall be published on the websites of the Company and the Exchange and through any other medium specified by the Authority; to invite persons wishing to be nominated to the membership of the Board.
Are board members entitled to vote on the General Assembly?
Yes, board members are entitled to vote on the items of a General Assembly except voting on a decision taken by the Board or the General Assembly with respect to transactions and contracts that are executed for the Company's account, if he/she has a direct or indirect interest therein.
How to calculate the period referred to in paragraph (9c) of Article (19) of the Corporate Governance Regulations that states: "By way of example, the following negate the independence requirement for an Independent Director:9) if he/she served for more
Any member of the board of directors who has spent nine consecutive or separate years in the board of directors of the company is considered a non-independent member, regardless of the years that the member has spent before or after the issuance of the regulation, taking into account that this paragraph is indicative.
Is it sufficient for the company to announce the date of the association and publish the invitation on the website of the Saudi Stock Exchange or is it bound by all the requirements in paragraph (d) of Article (13) of the Corporate Governance Regulations
The company shall comply with all the provisions of paragraph (d) of Article (13) of the Corporate Governance Regulations and shall announce the date, place and agenda of the General Assembly, and publish the invitation in the various channels and means mentioned in the paragraph.
What results from the General Assembly’s decision to terminate the membership of any Board member who fails to attend three consecutive Board meetings or five non-consecutive Board meetings during the course of his/her membership without a legitimate exc
A Board member may receive a Remunerations for his/her membership in the audit committee formed by the General Assembly, for any additional executive, technical, managerial or consultative – pursuant to a professional license- duties or positions carried out by the Board member, and such Remunerations should be in addition to the Remunerations he/she may receive in his/her capacity as a member in the Board and in the committees formed by the Board, pursuant to the Companies Law and the Company’s bylaws.
Must a Company announce to the public the results of the Shares buy-back transaction at the completion of each stage?
A Company may, if so provided and permitted in its bylaws, buy-back its Ordinary or Preferred Shares, in accordance with Article 12 of the Regulatory Rules and Procedures issued pursuant to the Companies Law relating to Listed Joint Stock Companies
