Board Membership Policy

Standards of membership of Board of Directors

 

Introduction

 

This policy aims at setting up clear standards and procedures for the membership of L’azurde Board of Directors (“the company”) in implementation of the provisions of article 22 (3) of Corporate Governance regulations of the Kingdom of Saudi Arabia rendered by the Board of Capital Market Authority (CMA). Article 22 (3) mentioned above states that the most important basic tasks of the Board of Directors include setting forth specific and explicit policies, standards and procedures for the membership of the Board of Directors and placing them into effect after approval by the general assembly.

 

These policies were adopted by the extraordinary meeting of the company general assembly held on 8 January 2018.

 

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 Investment, by CMA and by the company by-law.

 

Policies and standards of the membership of the company Board of Directors

 

  1. The nominee shall be professionally capable and has the required experience, knowledge and skill, which enable him/her to perform his/her duties efficiently as per Conditions for the membership of the Board (appendix 1).

 

  1. The nominee shall have effective ability of communication and strategic thinking.

 

  1. The nominee shall be a natural person of at least 25 years of age.

 

  1. 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.

 

  1. The nominee shall not be a board member of more than 5 other joint stock companies simultaneously.

 

  1. The nominee shall not be a government employee.

 

  1. The number of independent members shall not be less than one third of the board of directors and the majority of the Board members shall be of Non-Executive Directors.

 

  1. In the case of independent member, the independent member shall not have any case contradicting to independency as mention in article (20) of corporate governance regulation.

 

  1. 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.

 

  1. 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.

 

  1. 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.

 

Procedures of the Company board membership

 

  1. The Committee of Nominations and Remuneration 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 Investment and Companies Governance regulation.

 

  1. The Committee of Nominations and Remuneration shall submit its recommendation to the board of directors on nomination for the board membership in accordance with the aforementioned policies and standards.

 

  1. Any shareholder, 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.

 

  1. Any nominee who is a previous board member of a shareholding company should enclose the list of boards where he was a member and the list of standing committees in which he was a member.

 

  1. Membership type shall be clarified, i.e. if the member is an executive member or a non-executive member or an independent member.

 

  1. The membership nature shall be clarified, i.e. if the member is a nominee for himself or if he represents a legal person.

 

  1. The Committee of Nominations and Remuneration 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 both Capital Market Authority and General Department of Companies Ministry of Commerce and Investment.

 

  1. The Committee of Nominations and Remuneration shall carry out any observations provided by the

 

competent authorities on any nominee.

 

  1. The General Assembly shall elect the Board members for the term stated in the Company’s bylaws, provided that such term shall not exceed three years. Board members may be re-elected, unless otherwise provided for in the Company’s bylaws.

 

  1. The General Assembly shall take into account, when electing members to the Board, the recommendations of the nomination committee and the availability of the personal and professional capabilities required performing their duties effectively pursuant to article18 of corporate governance regulation. (Appendex1)

 

  1. Voting in  the  general  assembly  on  those  who  are  personally  nominated  in  accordance  with

 

aforementioned policies, standards and procedures using accumulated voting method.

 

  1. The Company shall notify the Capital Market Authority of the names of the Board members and description of their memberships within five business days from the commencement date of the Board term or from the date of their appointment, whichever is shorter,, as well as any changes that may affect their membership within five business days from the occurrence of such changes.

 

Appendix 1

 

Article (18) Conditions for the membership of the Board

 

A member of the Board is required to be professionally capable and has the required experience, knowledge, skill and independence, which enable him/her to perform his/her duties efficiently. He/she shall have the following qualifications in particular:

 

  • Ability to lead: He/she shall enjoy leadership skills which enable him/her to delegate powers in order to enhance performance and apply best practices in effective management and compliance with professional ethics and values.

 

  • Competency: He/she shall have the academic qualifications and proper professional and personal skills as well as an appropriate level of training and practical experience related to the current and future businesses of the Company and the knowledge of management, economics, law or governance, as well as the desire to learn and receive training.

 

3)   Ability to guide: He/she shall have the technical, leadership, and administrative competencies as well as the ability to take prompt decisions, and understand technical requirements and developments related to the job. He/she shall also be able to provide strategic guidance and long-term planning and have a clear future vision.

 

  • Financial knowledge: He/she shall have the ability to read and understand financial statements and

 

  • Physical fitness: He/she shall not suffer from any health issue that may hinder him/her from performing his/her duties and responsibilities.

 

The General Assembly shall take into account, when electing members to the Board, the recommendations of the nomination committee and the availability of the personal and professional capabilities required performing their duties effectively pursuant to this Article.