Kuwait Capital Markets Authority (CMA) regulations and internationally accepted guidelines emphasize the importance of acting openly and responsibly to implement the best policies and procedures. The eleven pillars of corporate governance as defined by the CMA touch upon major areas in any business entity which cover: Board of Directors; division of roles and responsibilities; efficiency; integrity; Risk; Audit; ethics; disclosure; protection of stakeholders’ and shareholders’ rights; performance enhancing; and corporate social responsibility (CSR).
In the past few years, the Board has been heavily involved in updating and refining the corporate governance framework in response to changes in legislation in Kuwait. Zain continues to engage in dynamic communications with investors and encourage all shareholders to vote and help preserve the long-term goals as set out in the company’s Articles of Association. In 2015, CMA issued a set of regulations as part of the updated executive bylaw that replaced a number of previous decisions and regulations. Accordingly, the Board adopted the revised regulations and revised internal policies and charters to reflect the legislative changes. These and other documents define the Corporate Governance framework.
ARTICLES OF ASSOCIATION
Our extraordinary general meeting (EGM), which took place in 2021, approved the amendments to the Articles of Association (AoA). These updates have been successfully reflected in the Ministry of Commerce and Industry (MOCI) records according to Kuwaiti laws and CMA regulations.
Zain’s success is dependent on its willingness to understand the environment in which it operates while aiming to achieve profitable growth. The company views this economic instability as being challenging, though opportunities still exist. Unflinching governance principles ensure the effectiveness of the Board and are key to maintaining the trust of investors. In 2015, Zain was an early adopter of the new governance regulations issued by the Capital Markets Authority (CMA) in Kuwait, which oversees and defends the interest of all stakeholders. The company has and shall continue to drive the accountable, value-driven management through its transparent system of corporate governance.
The Board of Directors provides oversight of the company’s affairs and consistently works to improve and build on Zain’s strong corporate governance practices. The Board is responsible for ensuring the company is managed in such a way to preserve long-term financial returns and the success of the business overall, which will also assure the company’s longevity for its customers, employees and other stakeholders. The Board of Directors at Zain are committed to business success through the maintenance of high standards of governance and ethics.
Frequency of Meetings There are a minimum of six regularly scheduled meetings of the Board each year with at least one meeting held each quarter, as per the CMA regulations.
Agenda The Chairman of the Board prepares the agenda of items to be considered by the Board at each of its regular meetings. Board members are invited to suggest inclusion of items on the agenda as required during the course of business.
Supporting Documents Materials and documents related to the topics as per the agenda are distributed in advance of the meeting, providing adequate time for prior review by the directors
The role of the Chairman of the Board is to lead and manage the business of the Board and to provide direction and focus, while ensuring that there is a clear structure for the effective operation of the Board and its Committees. He sets the agenda for Board discussions to promote effective and constructive debate and to support a sound decision-making process, ensuring that the Board receives accurate, timely and clear information, in particular about the company’s performance. The Chairman works closely with the Chief Executive Officer, to ensure that the strategies and actions agreed by the Board are effectively implemented.
The company has three standing committees. The purpose and responsibilities of each of these committees are outlined in the committee charters adopted by the Board. According to the regulatory requirements of the CMA, Board committees have been revised and reformed to comply with regulatory requirements. The current Board committees at Zain extend to:
A. AUDIT
The Audit Committee is responsible for assisting the Board in fulfilling its responsibilities relating to the oversight of
(1) The quality and integrity of the accounting, auditing, internal control, and financial reporting practices at Zain Group,
(2) The performance and qualifications of the independent registered public accounting firm (external auditors),
(3) The company’s relationship with its external auditors,
(4) Performance of the company’s Internal Audit Function, and
(5) The company’s compliance with legal and regulatory requirements.
Members of the Committee: Nasser bin Suleiman Al-Harthy (chairman) Aladdin Abdullah Hassan Baitfadhil Abdulrahman Mohammad Ibrahim Al Asfour Yousef Khaled Al-Abdulrazzaq Dr. Saad Ahmed Alnahedh
The main responsibilities of this committee are as follows:
(1) Identify candidates qualified to serve as members of the Board of Directors and identify candidates to be appointed as members of the Executive Management.
(2) Recommend candidates to be nominated by the Board of Directors for election by shareholders.
(3) Oversee the annual performance evaluation of the Board and Executive Management.
(4) Evaluate the compensation of the members of the Board and Executive Management, which support the long-term objectives of Zain Group.
Members of the Committee: Atif Said Rashid Al Siyabi (Chairman) Bader Nasser Al-Kharafi Talal Said Al Mamari Abdulrahman Mohammad Ibrahim Al Asfour Osamah Othman Al Furaih
C. RISK
The Risk Committee aims at promoting effective Board supervision of significant transactions within Zain. The Committee is responsible for all aspects of enterprise risk management including, but not restricted to strategic risk, market risk, compliance risk, the company’s risk tolerance, and operational risk. The committee reviews the policies on all risk issues and maintains oversight of all company risks.
Members of the Committee: Zaki Hilal Saud Al Busaidi (Chairman) Talal Said Al Mamari Bader Nasser Al-Kharafi Yousef Khaled Al-Abdulrazzaq Atif Said Rashid Al Siyabi
VALUES & POLICIES
Stakeholders: Internal and External
Zain’s Board and Management decisions can significantly influence actions and expectations made by many stakeholders - including customers, suppliers, dealers, employees, regulatory authorities, investors and others. For this reason, the company has created a variety of channels to communicate with each type of stakeholder. This has promoted a better understanding of stakeholder expectations, helping to address their specific requirements efficiently. The Board and Management are responsible for the protection of stakeholders’ rights and ensure that the changes in the laws, bylaws and instructions issued by regulatory entities have been reflected in the company’s internal policies and corporate culture. An effective Board oversight and supervisory role is the backbone of a sound corporate governance framework
VALUES & POLICIES
Taking Transparency to the Next Level
The company’s goal is to enable more effective communication methods with all stakeholders, and to provide conclusive and informative reports. These objectives are in line with Zain’s goal to become more transparent. One of the key aspects of the Corporate Governance section is the disclosure archive which includes all disclosures to the Kuwait Stock Exchange over the past five years, in compliance with CMA requirements. Zain believes that transparency and disclosure are fundamental to the way it does business striving at all times to ensure that investors, customers, employees, suppliers and all parties with whom it conducts business can rely on the company to operate in a responsible and ethical manner.
The ethical guidelines of the Code of Conduct exist to guide and to empower the Board and Management to make the right choices — as individuals and as a company. Adhering to the Code of Conduct is the responsibility of each and every employee in Zain Group and across the operating companies. By doing so Zain can have a positive impact in the industry, communities in which it operates, and beyond — and build a company all can be proud of, where corporate responsibility is a key competitive advantage.
02
INTEGRITY
Zain’s Code of Conduct requires that any business dealings are to be undertaken with the upmost honesty, integrity and fairness. To uphold this, Zain, its suppliers, business partners, intermediaries and agents are expected to carry on business with the highest levels of integrity, honesty, fairness and responsibility. Zain’s Code of Conduct also requires that these stakeholders ensure they have adopted a similar approach to conducting their businesses. Zain recognizes that its Code of Conduct will evolve over time to reflect the changes in the legislative and corporate environment. Accordingly, the company has developed a policy of ongoing review and revision of the document that will allow it to continually improve Zain’s ability to conduct business in compliance with the highest standards of honesty, fairness, transparency and integrity.
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CONFLICT OF INTEREST
Zain is committed to professionally managing potential conflicts of interest that may arise, and is dedicated to meeting the company’s obligations to maintain and operate effective organizational and administrative arrangements. Existing policies ensure that appropriate procedures and measures are in place to identify and effectively manage any relevant or material conflict of interest. These policies also guarantee that the Board appropriately deals with actual, potential and perceived conflict of interest and all decisions are made in the best interests of the company.
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CONFIDENTIALITY
Members of the Board and the Executive Management as well as all employees must maintain the confidentiality of information entrusted to them, except when disclosure is authorized by an appropriate legal officer of the company or required by laws or regulations. Confidential information includes all non-public information that might be of use to competitors or harmful to the company or its customers if disclosed. It also includes information that suppliers and customers have entrusted to Zain. The obligation to preserve confidential information continues even after employment ends.
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COMPLIANCE WITH THE LAW AND REGULATIONS
Directors, management, employees and other parties shall comply with all laws, rules and regulations applicable to their capacity as part of Zain, including, among others, the disclosure and transparency of material information.
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WHISTLEBLOWING
A whistleblowing framework is an essential best-practice, operational procedures to build a responsible, ethical organizational culture, requiring solid Board and Management support. Zain is committed to the highest standards of good governance, transparency, honesty, integrity and accountability. The company has developed its Whistleblowing policy, which sets out the guiding principles and procedures for reporting any misconduct to the designated authorities within the company so that appropriate corrective actions will be taken. This policy addresses the commitment of Zain to integrity and ethical behavior by helping to foster and maintain an environment where employees, officers and directors can act appropriately without fear of recrimination. The purpose of this policy is to provide reassurance and support to employees when raising concerns within the company. It caters for an effective and confidential investigation tool, prior to seeking resolution outside the company.
The Whistleblower is protected against unfair termination and unfair prejudicial employment practices. No Adverse Personnel Action shall be taken or recommended against any Whistleblower in retaliation against his disclosure in good faith of the alleged unethical and improper practices.
All whistleblowing done in good faith will be protected according to pillar 9, article (10/6) of the CMA’s corporate governance related regulations.
