Standards of the membership of Board of Directors

Introduction

These policies aim at setting up clear standards and procedures for the membership of Al-Marie Board of Directors (“the company”) in implementation of the provisions of paragraph (d) of article 10 of Companies Governance regulation of the Kingdom of Saudi Arabia rendered by the Board of Capital Market Authority (CMA) by the decision No. 1-212-2006 dated 12/11/2006 and implementations thereof. Article 10 mentioned above states that the most important basic tasks of the Board of Directors include (d) setting up clear and specific policies, standards and procedures for the membership of the Board of Directors and placing them into effect after approval by the general assembly”.

It is worth mentioning that these policies were adopted by the extraordinary meeting of the company general assembly held on 02/04/2013.

These policies, standards and procedures of the membership of the company Board of Directors are based on the Law of Companies, the circulars rendered by the Ministry of Commerce and Industry, by CMA and by the company bylaw.

First: policies and standards of the membership of the company:


  1. The nominee shall be a natural person of at least 25 years of age
  2. The nominee shall not be previously convicted of dishonor or dishonesty crime, decided as bankrupt, has made arrangements or conciliation with his creditors or unfit for the Board membership in accordance with any law or instructions applied in the Kingdom.
  3. The nominee shall not be a board member of more than 5 other joint stock companies simultaneously.
  4. The nominee shall not be a government employee.
  1. The nominee shall have effective ability of communication and strategic thinking.
  2. Taking variety of academic qualifications and practical experience into consideration and giving priority of nomination to the required needs of persons having appropriate skills for the board of directors.
  3. The number of independent members shall not be less than one third of the board of directors.
  4. In the case of independent member, the independent member shall not have any case contradicting to independency.
  5. The board member shall hold shares of at least SR. 10000 value within thirty days from the date being appointed as a board member. These shares shall be used to ensure the liability of the board members and they shall be non-tradable till the elapse of the period fixed for hearing the case of liability indicted in article 76 of the Law of Companies.
  6. The board member shall represent all shareholders and shall abide by what realizes the interests of the company in general and not what realizes the interests of the group he represents or the group that voted in favor of his appointment as a board member.
  7. The membership of the board member terminates by his resignation, death or by termination by a general assembly decision rendered by 51% votes of the shares represented in the meeting or if the board member is previously convicted of dishonor or dishonesty crime, decided as bankrupt, has made arrangements or conciliation with his creditors or unfit for the Board membership in accordance with any law or instructions applied in the Kingdom.
  8. The board member must resign before the end of his board membership period if he loses capacity for work as a board member, if he is unable to practice his works or if he is unable to allocate the necessary time or effort to perform his tasks in the board. In case of conflict of interests, the board member shall choose either to obtain a permit from the general assembly to be renewed annually or to resign.

Second: Procedures of the company board membership:


  1. The Committee of Nominations and Rewards shall coordinate with the executive administration of the company to announce opening nomination for the company board membership in accordance with the Law of Companies, the Circulars of the Ministry of Commerce and Industry and Companies Governance regulation.
  2. The Committee of Nominations and Rewards shall submit its recommendation to the board of directors on nomination for the board membership in accordance with the aforementioned policies and standards.
  3. Any one who is interested in nomination to the company board shall declare his wish by notifying the company administration in accordance with the applicable laws, regulations, instructions and decisions. This notice shall include an introduction of the nominee with respect to his curriculum vitae, his qualifications and his work experience.
  4. Any nominee who is a previous board member of a shareholding company shall state the number and date of the boards of the companies in which he was a member.
  1. Any nominee who is a previous company board member shall enclose with the nomination notice a statement from the company administration on the last session in which he was a board member including the flowing information:

    • The number of the board meetings held in each year of the session years
    • The number of the meetings which the member attended personally and the percentage of his attendance in all meetings.
    • The standing committees in which the member participated, the number of the meetings held by each committee within one year of the session period, the number of the meetings he attended and the percentage of his attendance to the total meetings.
  2. Membership type shall be clarified, i.e. if the member is an executive member or a non-executive member or an independent member.
  3. The membership nature shall be clarifies, i.e. if the member is a nominee for himself or if he represents a legal person.
  4. The Committee of Nominations and Rewards shall coordinate with the executive administration of the company by sending copies of nominations notices, their attachments and a list of the names of the nominees to the General Department of Companies Ministry of Commerce and Industry.
  5. The Committee of Nominations and Rewards shall in coordination with the executive administration of the company provide CMA with the CVs of the board membership nominees in accordance with the form of “the CV form of the nominees of a joint stock company board membership registered with CMA (Tadawul)”.
  6. The Committee of Nominations and Rewards shall carry out any observations provided by the competent authorities on any nominee.
  7. Voting in the general assembly on those who are personally nominated in accordance with aforementioned policies, standards and procedures.