These controls and standards were formulated in line with the CMA Board’s decision to amend the Corporate Governance Regulations on May 20, 2019, to include the competing business controls issued by the Company’s General Assembly (as per the suggestion of the Board of Directors) to explain the competition of the company and its mechanism and the concept of competing business , and the mechanism of the Board of Directors verification of the board member’s competition for the company’s business or competition in one of the branches of the activity that conducts it, in compliance with the requirements of paragraph (3) of article (46) of the corporate governance regulation.
The concept of the competing business
The following shall be deemed a participation in any business that may compete with the Company or any of its activities:
1. the Board members’ establishing a company or a sole proprietorship or the ownership of a controlling percentage of shares or stakes in a Company or any other entity engages in business activities that are similar to the activities of the Company or its group.
2. accepting membership in the Board of a company, an entity that competing with the Company or its group or managing the affairs of a competing sole proprietorship or any competing company of any form, except the company’s affiliates.
3. the Board member’s acting as an overt or covert commercial agent for another company or entity competing with the Company or its group.
The purpose of the company shall be as per article 3 of the company’s bylaws, and the company shall carry out its activities in accordance with the applicable regulations and after obtaining the necessary licenses from the related authorities, if any.
• The purpose of the company shall be as per article 3 of the company’s bylaws, and the company shall carry out its activities in accordance with the applicable regulations and after obtaining the necessary licenses from the related authorities, if any.
• The member of the Board of Directors shall not participate in any work that would compete with the company, or compete with the company in any activity in which it’s operates; otherwise the company may claim it before the competent judicial authority for appropriate compensation, unless it has a license from the General Assembly that allows it to do so.
• If a member of the Board desires to engage in a business that may compete with the Company or any of its activities, the following shall be taken into account:
1. Notifying the Board of the competing businesses he/she desires to engage in and recording such notification in the minutes of the Board meeting.
2. The conflicted member shall abstain from voting on the related decision in the Board meeting and General Assemblies.
3. The chairman of the Board informing the Ordinary General Assembly, once convened, of the competing businesses that the member of the Board is engaged in, after the Board assesses the board member's competition with the company's business or if he/she is in competition with one of the branch activities that it conducts in accordance with the standards issued by the Ordinary General Assembly upon a proposal from the Board and published on the company’s website, provided that such businesses are assessed on annual basis.
4. Obtaining an authorization of the Ordinary General Assembly of the Company for the member to engage in the competing business.
• Anyone desire to be nominated for membership of the Board of Directors should disclose to the Board of Directors and the General Assembly that they participate in a work that will compete with the company, or compete in any activity it is engaged in.
Rejection to Grant Authorization
If the General Assembly rejects granting the authorization to engage in a business that may compete with the Company or any of its activities, the member of the Board shall resign within a period specified by the General Assembly; otherwise, his/her membership in the Board shall be deemed terminated, unless he/she decides to withdraw from competing the company or regularize his/her situation in accordance with the Companies Law and its Implementing Regulations prior to the end of the period set by the General Assembly.
Review and Modification
The Company’s Nominations and Remuneration Committee reviews these controls and standards periodically or whenever needed, in order to ensure that they are in line with the relevant rules and regulations, as well as to assess their effectiveness in achieving their purposes.