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
Is it permissible for a Company to issue or buy-back Preferred Shares or Redeemable Shares, or convert one type or class of shares into another type or class of shares?
Yes, a Company must, upon completion of each phase, announce to the public the results of the Shares buy-back transaction at least half an hour prior to the start of the trading session on the day following the completion of each phase of the buy-back transaction.
Is it permissible for a Company to distribute dividends to its shareholders on a semi-annually or quarterly basis?
Yes, a Company may issue or buy-back Preferred Shares, convert Ordinary Shares into Preferred Shares or convert the Preferred Shares into Ordinary Shares, in accordance with the rules in Article 33 of the Regulatory Rules and Procedures issued pursuant to the Companies Law relating to Listed Joint Stock Companies.
What is the consequence of a Company's failure to pay the specified percentage to holders of Preferred Shares from the Company’s net profits after deduction of reserves (if any) for three consecutive years?
Yes, a Company may, if so provided and permitted in its bylaws, distribute interim dividends to its shareholders on a biannual or quarterly basis after fulfilling the requirements set forth in Article 39 of the Regulatory Rules and Procedures issued pursuant to the Companies Law relating to Listed Joint Stock Companies.
When dividends are distributed to the Registered Shareholders?
Preferred Shares shall not grant its holders the right to vote in General Assemblies unless the Company fails to pay to holders of such Preferred Shares the specified percentage of the Company’s net profits after setting aside the statutory reserve for three consecutive years.
Is it permissible for a Company to pledge its Shares as security for a debt?
The Board must implement the General Assembly resolution with respect to dividend distribution to the Registered Shareholders within fifteen (15) days from the date they become entitled to such dividends as determined in such resolution, or the Board’s resolution for the distribution of interim dividends.
In light of the requirements of Article (56) of the Implementing Regulation of the Companies Law for Listed Joint Stock Companies, is there a specific form of proxy to attend public or private assemblies and vote on the agenda items?
If it is evidenced to the Audit Committee or the Authority that the Remunerations paid to any Board member was based on false or misleading information presented to the General Assembly or included in the annual Board report, the Board member shall return such Remunerations to the Company, and the Company may request such Board member to return such Remunerations.
