The Securities and Commodities Authority has stated that public shareholding companies have the option to adopt a dual governance structure consisting of internal committees made up of members of their board of directors, and in the form of two committees, namely the “Supervision Committee” and the “Executive Committee”.

In the newly issued Corporate Governance Manual, the Authority clarified that any decision to adopt a dual governance structure is issued by majority votes of all members of the Board of Directors, and approved by the Annual General Assembly, and the Chairman of the Board of Directors must inform the Authority and the financial market of the decision, and disclose it on the company's website .

She noted that the Oversight Committee and the Executive Committee are responsible for corporate governance and compliance with this system.

Oversight Committee

According to the evidence, the "oversight committee" oversees the executive committee, appoints and dismisses members of the executive committee.

And upon its formation, all members of the oversight committee must be non-executive members, and members of the “Executive Committee” may not be appointed as members of the “Supervision Committee” two years before their appointment to the Executive Committee, unless it is done at the request of shareholders who have a percentage in excess of (25%) of the company's voting rights. In this case, the appointment as head of the oversight committee represents an exception whose justifications must be explained to the general assembly, and a member of the oversight committee is fully responsible for his duties, even if he delegates some of his powers to committees, individuals, or to others.

executive committee

As for the executive committee, it undertakes the day-to-day management of the company, and sets and implements a strategy for the company to be approved by the oversight committee, in addition to implementing the risk management framework approved by the oversight committee. A member of the Executive Committee is fully responsible for his duties, even if he delegates some of his powers to committees or individuals, or to others.

The guide indicated that, when meeting the Executive Committee, a member of the Executive Committee must attend all the meetings, and he may not be represented by the agency in the meetings, by any other member of the Executive Committee.

Cooperation between the two committees

The "securities" defined the form of cooperation between the "oversight" and "executive" committees in the following steps.

First: The Executive Committee shall coordinate, report to the company’s strategy, and implement it, to the Oversight Committee on a quarterly and annual basis.

Second: The oversight committee will oversee the implementation of the long-term strategy by the executive committee. The oversight committee will discuss the strategy regularly, and implement the strategy and the associated major risks.

Third: The executive committee is responsible for keeping the oversight committee aware of the following:

A- All matters related to the company regarding financial and non-financial performance, strategy, planning, business development, risk position, risk management and compliance.

B- Developing the current works according to what is targeted, and showing any differences in them.

Fourth: The oversight committee should be in regular contact with the executive committee, especially the chairman of the executive committee, to discuss them in the issues of strategy, planning, business development, risk stance, risk management and compliance with the company. The Chairman of the Executive Committee shall inform the Chairman of the Oversight Committee without delay of the main events that are of fundamental importance for assessing the company's status and performance, as well as for the management of the company.

Attending meetings and voting

The Securities and Commodities Authority confirmed that non-members of the Board of Directors may attend the meetings with the permission of the Chairman of the Executive Committee, and the majority of the members of the Executive Committee constitute a legal quorum for the meeting, and the decisions of the Executive Committee are issued by a majority of the attending votes.

In the event of equality, the President has a casting vote, and Executive Committee meetings are documented with records that include meeting details, in particular attendees' names, their deliberations, voting results, recommendations, and any reservations if any, and these minutes are expected from all members present.

Follow our latest local and sports news and the latest political and economic developments via Google news