Board of Directors

The Board of Directors (BOD) is accountable to the shareholders' General Assembly and is responsible for protecting the interests of the company, developing its business, achieving its strategy and developing the company's vision, mission, objectives and general strategy to achieve shareholder expectations. The BOD must also avoid conflicts of interest.

Shareholders shall elect members of the Council by secret vote or ballot for a period of three years and may be re-elected for similar periods. The BOD shall elect by secret ballot the Chairman of the BOD and Vice-Chairman. The Chairman of the BOD shall represent the Company in its relations with third parties and before the Judiciary, in addition to the other terms of reference set out in the Company's contract. His signature is considered as the signature of the BOD in the Company's relationship with third parties. The Vice-Chairman shall substitute the Chairman in his absence, or in the event that the Chairman is prevented from exercising his powers. A balanced structure of the BOD should be adopted to ensure:

• The majority of the BOD shall be non-executive members and shall include independent members (with a minimum of one member) provided that, independent members do not exceed half of the members of the BOD and the independent member(s) shall not be among the shareholders of the company.
• The BOD is composed of members who are fully independent and are able to make decisions without pressure or impediment.
• The BOD shall organize its work and allocate sufficient time to review the functions and responsibilities assigned to it.
• It is prohibited to combine the position of Chairman and CEO.
• Shareholders who are represented on the BOD may not participate with other shareholders in the election of the remaining members of the BOD except to the extent that it exceeds the percentage used for the appointment of their representatives to the BOD.
• A group of shareholders may join forces with one another to appoint one or more representatives on the BOD by a proportion of their combined ownership.
• The formation of the company's BOD takes into account the diversity of expertise and specialized skills, which contributes to enhancing efficiency in decision-making.
• The BOD shall consist of at least eight members elected by secret ballot by the General Assembly.

The company shall have an Executive Chairman either from among its members, or from outside, and that person is appointed by the BOD to be assigned to the management of the company. The BOD shall determine his scope of power to sign on behalf of the company. The BOD member, even if he is a representative of a natural or legal person, may not be a BOD member of more than five public shareholding companies based in Kuwait, and cannot be elected Chairman of more than one joint stock company based in Kuwait. He may not be a member of a similar company, or competitor company, or share a similar trade, or compete for the company's trade without a license from the General Assembly, renewed every year. All his transactions during his term is monitored by the CMA.

The BOD may carry out all the work required by the management of the Company according to its purposes, bounded only by the local law, the Company's Articles of Association and the General Assembly resolutions. The BOD may also distribute the work among its members according to the nature of the Company's business. The BOD may also authorize one of its members, or a committee from among its members, or one of its outsiders, to carry out one or more specific tasks, or to supervise any aspect of the company's activities, or to exercise some of the powers or activities vested in the council. The functions and responsibilities of the BOD include but are not limited to:

• Approval of the company's objectives, strategies, plans and policies, which include in the very least:
  The company's overall strategy and Master plan; its revision and guidance.
  The optimal capital structure of the company and its financial objectives.
  A clear policy for the distribution of profits of all kinds (cash / in- kind) and in the interests of shareholders and the company.
  Performance objectives, performance monitoring and overall performance of the company.
  Organizational and functional structures of the company and their periodic review.
• Approval of the annual estimated budgets, interim and annual financial statements.
• The overseeing of the company's main capital expenditures, the ownership and disposal of assets.
  Ascertaining the extent of the company's compliance with the policies and procedures that guarantee the company's respect for the internal rules and regulations in force.
  Ensure the accuracy and integrity of data and information to be disclosed in accordance with applicable disclosure and transparency policies and operating systems.
  Establishing effective channels of communication that allow the shareholders of the company to have continuous and/or periodic access to the various aspects of its activities and major developments.
  Develop a system of governance and general supervision monitoring the effectiveness and modify it if needed.
  Form specialized committees in accordance with a charter that clarifies the duration, powers and responsibilities of the committee, and how the council monitors them. The decision also includes naming members, defining their duties, rights and responsibilities, as well as evaluating their performance and course of action.
  Ensure that the policies and regulations adopted by the company are transparent and clear, so as to enable the decision-making process. Moreover achieve the principles of good governance, the separation of powers and responsibilities between the BOD and the executive management through:
  • Approval of the company's internal rules and regulations, and the subsequent determination of tasks, competencies, duties and responsibilities between different organizational levels.
  • Adopting the policy of delegating and implementing the work of the executive management.

Define the powers delegated to the executive management, the decision-making procedures and the duration of the mandate. The BOD shall also determine the subjects for which it holds power of decision. The Executive Management shall submit periodic reports on its practices of delegated authority.

Supervising and supervising the performance of the members of the Executive Management and ensuring that they perform all their duties. The BOD shall:

• Ensure that the executive management operates in accordance with the policies and regulations approved by the BOD.
• Hold periodic meetings with the executive management to discuss the work, obstacles and problems, as well as review and discuss important information related to the company's activity.
• Setting Key Performance Indicators (KPIs) for executive management consistent with the company's objectives and strategy.

Defining the bonus allocations to be awarded to employees such as the fixed and performance bonus segment and share premium.

The appointment or dismissal of any member of the executive management, including the CEO and the like.

Develop a policy that regulates the relationship with stakeholders in order to preserve their rights.

Establish a mechanism to regulate transactions with related parties in order to reduce conflicts of interest.

To ascertain periodically the effectiveness and adequacy of the internal control systems in force in the Company and its subsidiaries will:

• Ensure the integrity of financial and accounting systems, including relevant financial reporting systems.
• Ensure that appropriate risk management and control systems are in place by identifying the range of risks that the company may face and establishing a risk-sensitive environment at the company level and transparently communicating with stakeholders and stakeholders.
• Recommendation for the appointment of independent auditors.
• Recommendation on the appointment of the Shari'a Supervisory Board.
• Approve the company's code of conduct, ethics, work policies and procedures.

Follow-up performance of each member of the BOD and Executive Management in accordance with KPIs.

Preparing an annual report to be read in the General Assembly, which includes the requirements and procedures for complying with the rules of governance, and detailing the rules with which there is no compliance, at the same time explaining the reasons for non-compliance.

4. Liability of the BOD:

The Chairman and members of the BOD are responsible to the Company, shareholders and others for their acts and actions, and for all acts of fraud, and abuse of authority, and any violation of the law, or the company's system, and the improper administration during the period of their membership. The decision of the General Assembly to discharge the BOD does not preclude the establishment of a claim of liability.

The company may file a liability claim against the members of the BOD for errors that cause damage to the company. If the company is in liquidation, the liquidator shall file the lawsuit.

Each shareholder may sue for liability alone on behalf of the company in the event that the company does not raise them. In this case, the company must be dissolved to be compensated if it is required. The shareholder may file his personal claim for compensation if the error caused personal damage.

An Introductory Program is provided to new BOD members. This program includes a description of the company's functions, strategic planning, risk management and control system, as well as any other relevant information. The new members are presented to their fellow BOD members and executive management, and coordination is made to visit the main sites of the company's assets. The program is periodically reviewed, amended and guaranteed in the event that the Council or one of its members changes, including the following:

• The company's strategy and objectives.
• Responsibilities and tasks assigned to members as well as powers and rights.
• Legal and regulatory obligations of the Company and the BOD.
• General Summary of the Company's Business and the financial situation (including the summary of financial statements and annual reports for the past years, distributions, assets, performance indicators, investments, projects, real estate portfolios, estimated budget for the coming years).
• Memorandum of Association and Statutes.
• Company Structure.
• Asset allocation strategy.
• Plan of career progression.
• Governance Guide.
• Annual report for the previous year.
• Contact information (information card containing contact details of BOD members, Executive Management, and office of the Chairman including names, titles, telephone numbers, mobile, fax and e-mail).

Self-evaluation of the performance of the BOD, including the performance of the Chairman and the Vice-Chairman, where the self-evaluation is conducted on an annual basis and the evaluation is reviewed and approved by the BOD. Performance is evaluated through Key Performance Indicators (KPIs) to assess the BOD as a whole and the contribution of each member and each of its committees, the following should be considered:

a. Qualitative Indicators:

• The degree of deviation between the estimated budget of the company and the actual figures achieved.
• Progress towards the desired goals.
• The extent of the response to observations received from regulators concerning corrections.
• The rapidity of response to problems and the ability to solve them.
• The turnover rate of employees, to measure the degree of loyalty to the company.
• Training courses obtained and related to the nature of work.

b. Quantitative indicators:

• Return on average assets.
• Return on average equity.
• Net profit margin.

An annual assessment of the performance of each member of the BOD shall be carried out by all members of the BOD to determine the level of performance and the need for individual development, based on the model prepared for that purpose.

BOD member(s) performance improvement:

The necessary support and training is provided to members of the BOD on the latest standards, regulations and specializations in the field of administrative and financial work to develop their performance, their skills and the weight of their expertise, especially in the field of governance and risk management

BOD members receive the remuneration recommended by the BOD and are presented under the agenda items of the AGM for approval. The total of these bonuses may not be estimated at more than 10% of the net profit after deducting consumption and reserves; distribution of profit should be of not less than 5% of the capital. The BOD shall submit an annual report submitted to the ordinary general assembly of the company for approval, containing the amounts, benefits and privileges obtained by members of the BOD of whatever nature or name. The policy of remuneration shall include the following minimum standards:

• To set a clear policy for BOD members' remuneration, while adhering to the parameters recommended by the Remuneration and Nominations Committee which are approved by the BOD.
• The Remuneration and Nomination Committee shall be responsible for preparing and defining the guidelines for the remuneration of members of committees of the BOD and submitting its recommendations to the BOD for approval.

The allocation of the BOD (travel allowances for official functions, training and others) is determined under the provisions of the approved bylaws.

The Company shall insure the members of the BOD against damage and risks, to protect and cover them in the event of any of them being threatened, or having a legal action taken against them, whether civil, penal or administrative for being members of the board. Such insurance shall be to the fullest extent permitted by law, including legal expenses, verdicts and fines covering all amounts paid..

• If he fails to attend six consecutive meetings of the BOD without an acceptable excuse, a decision shall be taken by the BOD in this regard and shall be notified to the concerned authorities.
• If he resigns from his position through a written request addressed to the BOD, approved and terminated by the concerned authorities.
• If he is replaced by the original assigning entity.
• If he is isolated by a decision of the General Assembly.
• If he is sentenced to bankruptcy.
• If he is convicted of a crime that violates honor and honesty.
• If he is sentenced to a sentence restricting liberty on a crime of negligence or fraud, or for violating the provisions of the law.
• If he loses his eligibility.
• If deceased, or for any of the reasons stipulated by the regulations and laws in this regard.

• A resolution issued by the ordinary general assembly of the company may dismiss one or more members of the BOD, or dissolve the BOD of the company and elect a new BOD on the proposal of a number of shareholders holding at least one quarter of the company's capital.
• If the position of a member of the BOD becomes vacant for any of the reasons mentioned in the previous paragraph, the member of the first reserve shall be invited. In case of his being unable to attend, the second reserve member shall be invited.
• If the vacant positions reach a quarter of the original positions of the Board, the BOD shall convene the General Assembly within two months from the date of the vacancy of the positions and shall elect members to fill the vacant positions.
• In all cases, the new member shall complete the remainder of his predecessor's term.

• Coordinating with the members of the BOD to form and follow up the work of the Committees of the Council.
• Ensure the effectiveness and performance of the Council and all its members.
• Reviewing and adopting the agendas of the meetings of the BOD and the Ordinary and Extraordinary General Assemblies.
• Convening meetings after ensuring that the quorum is sufficient to enable the Council to meet and perform its tasks in the best possible manner.
• Management of the meetings of the BOD and the Ordinary and Extraordinary General Meetings.
• Ensuring that the members of the BOD receive full and timely information regarding the topics to be discussed during BOD meetings.
• Ensuring that the BOD discusses all key issues effectively and in a timely manner
• Encourage all members of the BOD to participate fully and effectively in the management of the affairs of the BOD to ensure that the Council is in the interests of the company.
• Monitor the quality and volume of information and reports submitted by the executive management to the BOD.
• Follow up on the performance of the executive management and the implementation of tasks, decisions, recommendations and requirements issued by the BOD.
• Review and evaluate the performance and rewards of executive management.
• Monitor the process of assessing the performance and achievements of the Council.
• Authorize the Chairman and / or Vice-President of the BOD as he deems appropriate for the position of the Official Spokesperson and shall be responsible for speaking on behalf of the Company in coordination with the Chief Executives and Directors to avoid any inconsistencies or discrepancies between the various statements made by the Company.
• Coordinating with the BOD and the Executive Management in defining the company's mission, vision and strategy, and circulating it to the executive management to implement it effectively in all departments and departments and ensure compliance with its content and work accordingly.
• Inform the members of the BOD of the induction program which gives them an opportunity to familiarize themselves with all the company's systems and activities.
• Working with the BOD and Executive Management to ensure ethical principles and standards are adopted and adhered to in all company activities and operations and are applicable to all employees.
• Coordinating with the BOD and the Executive Management to promote and develop the company's activities and activities, and strive to maintain and improve its position and consolidate these concepts to work by all employees.
• Coordinate with the BOD and Executive Management to strengthen social responsibility frameworks.
• Ensure effective communication with shareholders and communicate their views to the BOD.
• Create a culture that encourages constructive criticism on issues around which there is a divergence of views among council members.

The Vice-Chairman shall have all the powers and responsibilities of the Chairman of the BOD in his absence.

Except for the independent members of the BOD, a BOD member (or his representative) must be the owner of a number of Company shares to ensure his membership. Under each set of criteria below, a candidate for membership of the BOD should:

a. Technical Criteria:

• Contribute to the company's vision, mission and strategy.
• Bring appropriate professional experience in a field consistent with the nature of the company's work.
• Offer technical, leadership and administrative capabilities that enable him to work independently, make rapid decisions and comprehend the technical requirements and developments related to work processes.
• Read and understand operational and financial reports.
• Have knowledge about the activities of the company.
• Have experience of handling crisis management effectively.
• Have solid experience in identifying, managing and controlling risks.
• Bring adequate knowledge of local and global markets.

b. Compliance Criteria:

• Knowledge and understanding of the principles of governance.
• Commit to achieve all the tasks and responsibilities entrusted to him and work to achieve the objectives of the company.
• Undergo continuous learning and training, and undertake to develop professional and administrative skills.
• Understand time-management in order to balance performing tasks and attendance of meetings.

c. Ethical Criteria:

• Be free of any conflicts of interest.
• Hold values that are consistent with the company's values.
• Hold no criminal record
• Have strong personal integrity.
• Be reputable and enjoy relationships that serve the interests of the company.
• Be proactive.

d. Academic Criteria

Must have a university qualification, or a qualification from one of the applied institutes specialized in the field of economics, finance, banking, law, administration etc., and have had suitable practical experience.

• He/she shall not be entrusted with any executive work of the Company and shall not entertain any other relationship except that of membership of the BOD; the person(s) may be shareholders of the company, or external candidates
• He/she cannot own more than 5% of the company's shares.
• He/she cannot be an employee of the company, or an employee of any of the company's subsidiaries, or of any of its stakeholders.
• He/she must not be a close relative to any of the BOD me
• mbers, senior executives of the company, nor any company subsidiary, nor an entity that is part of the group or the relevant principal parties.
• He/she cannot be a BOD member of any subsidiary.
• He/she shall not be employed during the past two years by legal persons holding controlling interests in the company.
• He/she shall have the qualifications, experience and technical skills appropriate to the company's activities.

The BOD shall appoint the Secretary and determine his/her fees, as well as determine the Secretary's functions to ensure they are in-line with the level of responsibility. The Secretary of the BOD may not be appointed or dismissed, except by a decision of the BOD. The Secretary's role is to:

• Coordinate between the President and the members of the Council regarding the setting of appropriate dates for the meetings of the BOD so as to ensure attendance.
• Liaise with the Chairman of the BOD on items on the agenda at BOD meetings.
• After approval by the Chairman of the BOD and at least three days before the BOD meeting, prepare and deliver the invitations/documents related to the BOD meeting, (excluding those from emergency meetings).
• The minutes of the meetings of the BOD shall include all content of the meeting, (including date and time of the meeting and a list of the names of the attendees and the absentees, along with the reasons for the absence). The minutes will detail BOD approvals and members' objections, if any; moreover, the minutes will details discussions of any items on the agenda and additional items under any other business (AOB); resolutions and recommendations, in addition, the minutes will record any observations pertaining to documents delivered to the members of the BOD prior to, or during the meeting, and the establishment of a register of their own.
• Follow-up with the ratification of BOD meeting minutes by having them approved by all members present.
• Save the minutes of the approved BOD meetings.
• Ensuring the members of the BOD shall receive a copy of all the minutes of the approved BOD meetings, documents and records related to the company.
• Follow-up of all the topics presented and discussed during the meetings of the BOD and all the requirements of the members of the BOD until completion.
• Follow-up and supervision of the procedures of the Ordinary / Extraordinary General Assemblies before and after the coordination with the concerned departments.
• Follow up the requirements of the BOD members and provide them with the necessary information and reports.
• Coordinate between the members of the BOD and the executive management regarding the requirements of the BOD.
• Undertake additional job functions as assigned by the BOD

1. Meetings and Quorum:

The BOD shall hold periodic meetings and determine the topics to be discussed related to the Company's activity, taking into consideration the following:

• The BOD shall meet at least six times during the fiscal year at the invitation of its Chairman, provided that at least one meeting is held in each quarter.
• The meeting of the BOD shall be valid when the majority of the members are present, provided that the number of attendees shall not be less than five members, and members are not present by proxy.
• The meeting may be held following traditional means, or via modern means of communication provided that the members are in receipt of supporting documents.
• Decisions may be made by circular resolutions gaining the approval of all members of the BOD, after viewing supporting documents if any.
• All meetings must be scheduled after the end of the trading period on the Stock Exchange to avoid any news leakage.
• The Chairman of the BOD shall convene an emergency meeting upon a written request submitted by two members.

2. Invitation to BOD Meetings:

BOD meetings shall be formally convened well in advance of the meeting time, no less than three working days prior, taking into account the invitation to emergency meetings. Two members of the BOD may request an emergency meeting and direct the request formally to the Chairman, provided that the Secretary of the board takes the necessary action.

3. Absence:

Members of the BOD, including the Chairman and Vice-Chairman, shall report non-attendance ("apologies") with reasons before the meeting.

4. Invitation of non-members:

An Executive Director, or any member of the staff, external or internal auditors, consultants and others may be invited, at the request of the Chairman and / or the Vice-President, as they deem appropriate, for the purpose of providing an explanation, a presentation, information or a response to queries, on subjects that fall within their area of competence.

5. Meeting Minutes:

The BOD shall discuss any issues that are included on the agendas of the meetings in a very transparent manner, and ensure the members are provided with the information to make decisions. The decisions taken and all the facts, including any reservations, if any, are included in the minutes of the meeting. The minutes of meetings must be saved.A special record should be created for summaries of BOD meetings, including all the above information. Minutes of meeting shall include the following:

• The number of meetings of the BOD in consecutive figures for the year in which the meetings were held.
• Place, date, start and end timings.
• Registration of the names of those present and absent from the meeting with reasons for absence.
• Note persons present from outside the Council.
• The details of any objections to the BOD approved agenda
• A record of the meetings in accordance with the agenda items and any other work, resolutions, recommendations and observations taken.
• Accreditation and signing of meeting minutes by all members of the BOD present and the Secretary.

6. Voting on BOD Decisions:

Decisions of the BOD shall be made when a majority of the members is present.