Board of Directors Responsibilities
1. Board of Directors
1.1 Main Functions and Roles of the Group Board of DirectorsThe Group Board of Directors has to exercise the following main functions:
- Approving the strategic plans and main objectives of the company and supervising their implementation; this includes: Laying down a comprehensive strategy for the company, the main work plans and the policy related to risk management, reviewing and updating of such policy. Determining the most appropriate capital structure of the company, its strategies and financial objectives and approving its annual budgets. Supervising the main capital expenses of the company and acquisition from disposal of assets. Deciding the performance objectives to be achieved and supervising the implementation therefore, and the overall performance of the company. Reviewing and approving the organizational and functional structures of the company on a periodical basis.
- Laying down rules for internal control systems and supervising them; this includes: Developing a written policy that would regulate conflict of interest and remedy any possible cases of conflict by members of the Board of Directors, executive management and shareholders. This includes misuse of the company's assets and facilities and the arbitrary disposition resulting from dealings with the related parties. Ensuring the integrity of the financial accounting procedures including procedures related to the preparation of the financial reports. Ensuring the implementation of control procedures appropriate for risk management by forecasting the risks that the company could come across and disclosing them with transparency. Reviewing annually the effectiveness of the internal control systems.
- Drafting a Corporate Governance Code for the company that does not contradict the provisions of these regulations, supervising and monitoring in general the effectiveness of the code and amending it whenever necessary.
- Laying down specific and explicit policies, standards and procedures, for the membership of the Board of Directors and implementing them after they have been approved by the General Assembly.
- Outlining a written policy that regulates the relationship with stakeholders with a view to protect their respective rights; in particular, and such a policy must cover the following: Mechanisms for indemnifying the stakeholders in case of contravening their rights under the law and their respective contracts. Mechanisms for settlement of complaints or disputes that might arise between the company and the stakeholders. Suitable mechanisms for maintaining good relationships with customers and suppliers, and protecting the confidentiality of all information related to them. A code of conduct for the company's executives and employees to regulate their relationship with the stakeholders. The code shall be compatible with the proper professional and ethical standards. The Board of Directors shall lay down procedures for supervising this code and ensuring compliance therewith.
- Deciding policies and procedures to ensure the company's compliance with the laws and regulations, and the company's obligation to disclose material information to shareholders, creditors and other stakeholders.
1.2 Responsibilities of the Board
1. General Responsibilities
- Without prejudice to the powers of the General Assembly, the company's Board of Directors shall assume all the necessary powers for the company's management. The ultimate responsibility for the company rests with the Board even if it sets-up committees or delegates some of its powers to a third party. The Board of Directors shall avoid issuing general or indefinite power of attorney.
- The responsibilities of the Board of Directors must be clearly stated in the company's AOA.
- The Board of Directors must carry out its duties in a responsible Manner, in good faith and with due diligence. Its decisions should be based on sufficient information from the executive management, or from any other reliable source.
- A Board member represents all shareholders; he/she undertakes to carry out whatever may be in the general interest of the company, but not the interests of the group he/she represents or that which voted in favor of his appointment to the Board of Directors.
- The Board of Directors shall determine the powers to be delegated to the executive management and the procedures for taking any action and the validity of such delegation. It shall also determine matters reserved for decision by the Board of Directors. The executive management shall submit to the Board of Directors periodic reports on the exercise of the delegated powers.
- The Board of Directors shall ensure that a procedure is laid down for orienting the new board members of the company's business and, in particular, the financial and legal aspects, in addition to their training, where necessary
- The Board of Directors shall ensure that sufficient information about the company is made available to all members of the Board of Directors, generally, and, in particular, to the non-executive members, to enable them to fulfill their duties and responsibilities in an effective manner
- The Board of Directors shall not be entitled to enter into loans, which spans more than three years, and shall not sell or mortgage real estate of the company, or drop the company's debts, unless it is authorized to do so by the company's AOA. In the case where the company's AOA includes no provisions to this respect, the Board should not act without the approval of the General Assembly, unless such acts fall within the normal scope of the company's business
- All Board meetings must adhere to the regulations of Savola regarding invitation for meetings to be attended, and authorizations for attendance (proxy). It is imperative to write the minutes of the meetings in a manner that the Board discusses and approves, and to provide the Board members with a draft of the minutes within (10) ten days following the date of the meeting. The members are requested to express their opinions on these minutes within (7) seven days from the date of each meeting. These statutory books are kept in a special register within the Company records after approval from the Board.
2. Responsibilities of the Board of Directors towards the shareholders:
- Inviting the General Assembly of the Group's shareholders to convene for its ordinary and extraordinary meetings, and approving its businesses agenda.
- Ensuring that the annual report and the financial reports published and communicated to the shareholders reflect the real performance & position of Savola. Moreover, the Board must be sure that the Savola's administration is providing current shareholders, possible shareholders, and the investment community with all the special information on sales, profits and the most important developments in the Group. Moreover, this information must be aligned with the Group's disclosure and transparency policy. Transparency should not conflict with the policy of the Group about commitment to information privacy.
- Enforcing the disclosure and the transparency standard as a permanent and clear policy for the Board.
- Approving the quarterly financial accounts of the Group in preparation for publishing them in the newspapers to comply with all rules and regulations
- Endorsing the distribution of quarterly and yearly dividends and distribution rates, plus giving recommendations on the annual dividends distribution to the General Assembly to approve them.
- Recommendation for increasing or decreasing the company's capital.
- Approving the audit committee's recommendation about selecting and nominating the external auditors and agreeing on their fees, and presenting this recommendation to the General Assembly for approval.
3. Responsibilities of the Board of Directors towards The Savola Group:
- Set Overall strategy and investment plan.
- Set financial targets.
- Set corporate governance guidelines & compliance.
- Define Capital allocation model across core businesses and investments.
- Define Dividend policy.
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