CORPORATE GOVERNANCE

Introduction

The Board of Directors of ALARGAN International Real Estate Company is prudent in activating and implementing the standards of governance as well as in spreading the governance culture within the professional practices of the company and develop these practices in line with the Company's strategic directions in order to retain shareholders confidence and manage relations with all parties.

Therefore, the company developed a manual for Corporate Governance Practices that includes the best CG practices and sound rules of management, most notably: the disclosure and transparency standards and policies, conflict of interest policy, Insiders trading policy, the code of conduct and ethical values, whistleblowing policy, shareholders and stakeholder’s rights, the board of director responsibilities and charter; in addition to identifying the responsibilities of the executive management, as well as policies and procedures for internal control activities, internal audit and the board and its committees charters.

Governance Framework

Board of Directors

ALARGAN’s Board of Directors comprises five members, the majority of whom are non-executives, one independent member and one executive member. Elected during the Ordinary General Assembly held on May 29, 2017 for 3 years, it was taken into consideration the diversification of professional and technical experiences of the board members, in addition to holding a strong track record from their membership in the board of other companies and having the necessary skills to fill in the position.

Name Capacity of the Director
Haitham S. Al-Khaled Chairman – Non-executive, representing himself
Khaled K. Al-Mashaan Vice Chairman – Executive, representing himself
Mohammed F. Al-Othman Director – Non-executive, representing Gulf Life Insurance Company – K.S.C.
Hamad A. Al-Mudhaf Director – Non-executive, representing himself
Tareq B. Al-Mutawa Independent Director – Non-executive, independent

Board Committees

The Board of Directors established three committees to enable it to perform its functions effectively. These committees assess various matters that are presented to the Board by the Management and provide their recommendations to the Board in this respect. Each specialized committee was established within the framework of the corporate governance principles and rules and the related regulatory requirements. The main roles, functions and authority of the committees have been clearly stated their respective work charter.

Audit Committee

  • Mohamed F. Al-Othman (Chairman of the Committee)
  • Tareq B. Al-Mutawa (Director)
  • Hamad A. Al-Mudhaf (Director)

Risk Committee

  • Tareq B. Al-Mutawa (Chairman of the Committee)
  • Khaled K. Al-Mashaan (Director)
  • Hamad A. Al-Mudhaf (Director)

Nomination and Remuneration Committee

  • Haitham S. Al-Khaled (Chairman of the Committee)
  • Khaled K. Al-Mashaan (Director)
  • Tareq B. Al-Mutawa (Director)

Internal control and supervision systems

ALARGAN’s Board of Directors is responsible for internal control and reviewing its effectiveness and ensuring that all related procedures are being implemented through the periodic revision by the board’s committees. The company has implemented these internal control systems through the revision of these systems on an annual basis and every 3 years by an independent audit company in accordance with the requirements of the Capital Market Authority. The review includes auditing the accounting and relevant records, as well as evaluating the Group's internal control systems, in respect of, but not limited to, governance, financial control, information technology, risk management, human resources and administration, internal audit, money laundering and terrorism financing combatting operations, legal affairs and Company activities as a whole.

Professional conduct and ethical values Policy:

The Board of Directors has set standards to implement ethical principles within the Company in a manner that reflects and enhances the image and reputation of the Company. The principles and rules of professional conduct affirm the commitment of all employees of the Company, whether members of the Board of Directors, Executive Management or employees, to the internal policies and regulations of the Company and to the implementation of the legal and regulatory requirements which lead to:

  • Promote for an honesty and ethical behavior that reflects positively on the Company.
  • Enhance investor confidence in the Company's integrity and financial soundness.
  • Maintain an effective institutional environment.
  • Promote the principle of compliance with the laws, rules and regulations governing the activities and operations of the Company, and ensure that the Company's positions, assets and resources are not exploited to achieve personal interests.

DISCLOSURE POLICY

ALARGAN adopted a disclosure policy that guarantees transparency, integrity and prevents conflict of interest or any misuse of information. This policy aims at regulating the procedures of disclosing material information and providing accurate information in a timely manner and with clarity, whether these information are related to the company’s financial positon or administrative and operational information or interests and ownerships of its shareholders. ALARGAN’s Board of Directors is responsible for the accuracy and the integrity of any disclosed information and to ensure the implementation of this policy within the company.

For reviewing ALARGAN disclosures, kindly visit: http://alargan.com/boursa-disclosure.html

Shareholder & Stakeholders rights policy

The Company adopts a policy based on the principles of transparency, equality and respecting the rights of its shareholders and stakeholders according to rules and regulations stipulated in the Companies Law and the Company’s Article of Association. The company is committed to provide the following rights for shareholders, comprising small and foreign shareholders, without any discrimination in rights.

Below is a summary of the main responsibilities towards stakeholders, and the basic rights of our shareholders:

  • Obtaining the allocated share of dividends.
  • Obtaining the share of company assets in case of liquidation.
  • Obtaining data of the company's activity and its operating and investing strategies regularly and continuously.
  • Participating in General Assembly Meetings of shareholders, voting its decrees and ensuring that the shareholder gets financial data at least seven days before the general assembly meeting on the ended financial period and also the report of director's board and the auditor's report.
  • Electing the Board members.
  • Registering the property value in the company records.
  • Disposing of stocks in terms of recording, transferring and converting the shares ownership.
  • Monitoring the company performance in general and board works in particular.
  • Accountability of the company board members or executive manager and filing a case of responsibility in case of their failure in performing their assigned tasks.
  • Nominating the membership of the company board.

Policy of Protecting the Rights of Stakeholders and Related Parties

The protection of the rights of stakeholders is one of the most important responsibilities of the Board of Directors and the Executive Management. ALARGAN has developed a policy and mechanism to regulate its relationship with stakeholders and related parties in order to preserve their rights. The Company's policy in this regard comprises the following:

  • All activities undertaken with the Board of Directors and related parties is subject to the same conditions that the Company applies with different stakeholders, without any discrimination or preferential conditions.
  • The procedures to be followed in the event of breach of a party of its obligations, as well as the procedures for which compensation will be paid, confirming that the contracts concluded between the stakeholders and the Company include and explain in detail those procedures.
  • The mechanisms for compensating stakeholders in case of violation of their rights, which are approved by the regulations and protected by contracts.
  • The mechanisms that show how to establish good relations with customers and suppliers and maintain the confidentiality of information related to them.
  • The mechanisms for settling complaints or disputes that may arise between the Company and stakeholders, in an aim to avoid conflict between activities undertaken with stakeholders, whether contracts or deals signed with the Company and the interest of shareholders.

Policy of Conflict of Interest

The Company commits to treating all clients with justice, equality and fairness based by implementing the policy of conflict of interest, which outlines a set of procedures to identify cases of conflict of interest and regulates the mechanism of dealing with them. These policies include how the Board of Director deals with cases of conflict of actual or potential interests to maximize transparency and objectivity.

Whistleblowing Policy

ALARGAN has developed a mechanism to facilitate the access of stakeholders and report any malpractice that they may be exposed to in turn enable proper action to remediate the practice while protecting the person who reported the incidence.

To report any malpractice, please fill the related form and send it to hr@alargan.com

Policy of Compensation (Wages and Remunerations)

The policy of compensation (wages and remuneration) was developed in line with ALARGAN’s main objectives. Adopted by the Board of Directors, the policy reflects the importance of motivating skilled and experienced employees and retaining them, while enhancing the performance of departments and achieve constant profitability, and ensuring the Company provides an attractive element for experienced professionals of all competencies to join them, which in turn helps achieving the best results for the objectives and strategies of the Company.

The Board ensured connecting the financial rewards system to the short and long-term performance objectives of employees. The rewards are determined based on the achievement of these key indicators towards the Company's integrated strategy.

CSR Policy

The success and development of companies, in general, can be related to the importance of companies understanding of social responsibility related to some humanitarian values, such as solidarity and sense of responsibility concerning anybody related to the company, including shareholders, employees, society members, Stakeholders or any Related Party. ALARGAN was committed to operate under a sustainable business model that generates value by building deep, extensive and long-term relationships with our clients and other members of the community in which we operate. In the Company's view, social responsibility is no longer a matter of volunteering to help society alone, but it is rather a cornerstone of helping to build society. To that extent, ALARGAN’s Board drew the lines for the CSR policy and raised the standards of community awareness about environmental sustainability through its actual implementation and projects.

For more information about ALARGAN activities in terms of social responsibility, please refer to our annual report or the CG report for this year.