Conflict of Interest Policy and Addressing of Potential Conflict of Interest Cases
- Conflict of Interest Policy and Addressing of Potential Conflict of Interest Cases
- General Overview
- Policy Application
- The Cases of Conflict of Interests (CoI)
- Conflict of Interest Associated with Major Shareholders
- Conflict of Interest Associated with the Board
- Conflicts of Interest Associated with Savola’s Executive Management and Employees
- Conflicts of Interest Associated with External and Internal Auditors and Consultants
- Conflicts of Interest Associated with other Stakeholders
- Other Miscellaneous Provisions
- Disclosure of Conflicts of Interest
- Monitoring the Implementation and Violations of the Policy
- Review and Amendments of this Policy
Within the responsibilities and duties of the Board, it shall develop a written and clear policy to deal with the actual or potential conflict of interest cases that may affect the performance of the members of the Board or the Executive Management or other employees when dealing with the Company or other stakeholders. This policy shall be based on the requirements stipulated in the CG Regulations issued by the CMA and the Companies Law. In light of this, the Board has developed the following policy:
Conflict of Interest Policy and Addressing of Potential Conflict of Interest Cases :
The purpose of this policy is to outline the policies and procedures that shall regulate and prohibit conflicts of interest for shareholders, the Board, Committees, Senior Executives, employees, auditors and consultants and other stakeholders as appropriate (collectively referred to as the “Concerned Persons”). This policy also aims to help “Concerned Persons” to appropriately manage conflicts of interest in accordance with legal requirements and the goals of accountability and transparency in Savola’s operations.
2) General Overview:
Conflicts of Interest arise in organizations where a person’s private interests interfere in any way with the overall interests of the organization.
Savola Group acknowledges and respects the fact that its “Concerned Persons” have their own individual interests and have the right to engage in various activities provided that the activities do not in any possible way lead to a situation that conflict with the overall interests of Savola Group.
Furthermore, conflicts of interests may arise or be determined by the following examples:
- When any concerned person exploits his/her position, information, or business opportunities acquired during work for his/her benefit or the benefit of third parties;
- When a “Concerned Person” establishes a company that provides services similar to that of Savola;
- When a “Concerned Person” (i.e. Board member) makes a purchasing or business choice to boost a business that he/she has stake in;
- When an employee or his/her relatives performs any type of work for suppliers, sub-suppliers and competitors;
- When a “Concerned Person” takes actions or has interests that may make it difficult to perform his or her work for Savola objectively and effectively;
- When a “Concerned Person”, or members of his/her family, receive improper personal benefits as a result of his/ her position in Savola.
- When a “Concerned Person” (i.e. Board member) accepts fees for providing consultations to another company that is in direct competition with Savola due to the main nature of the business (i.e. foods such as edible foods, sugar, ghee, pasta, retail) .
- Savola Group and stakeholders with any conflicting interests must do all that it takes to make the Company's interest prevail, under the best of circumstances. “Concerned Persons” must also refrain from influencing the Company's decisions in all what might cause a conflict of interest, including refraining from voting on any decision or anything subject to a possible conflict of interest. They must also report any conflict of interest arising from their relations with Savola Group, in compliance with the disclosure methods defined in this policy and regulations in force in the Kingdom of Saudi Arabia.
- Mediating for the employment of relatives and friends at Savola Group or its OpCos or recommending them. If a relative applies for a job, the concerned persons shall not mediate, and act in accordance with the procedures and policies determined by the Company without any direct or indirect impact or interference.
3) Policy Application:
This policy applies to the following stakeholders:
- Major shareholders who own 5% or more of the Company’s capital;
- Members of the Board AC, and other Board’s Committees;
- Senior Executives and employees;
- External auditors and Company’s advisors; and
- Other stakeholders as appropriate.
4) The Cases of Conflict of Interests (CoI):
The stakeholders referred to in the paragraph above shall refrain from dealing with the Company and/or one of its OpCos in any action that could lead to a potential conflict of interest, except in accordance with the rules included in this policy, the regulations and laws in force in the Kingdom of Saudi Arabia. Conflicts of interests are as follows:
5) Conflict of Interest Associated with Major Shareholders
- All transactions and contracts undergone with major shareholders and their relatives who own directly or indirectly 5% and more of the Company's shares or who own a controlling share in one of Savola's OpCos and their subsidiaries abide by the same conditions applied to dealing with third parties.
- All transactions undergone with major shareholders and their relatives who own directly or indirectly 5% and more of the Company's shares or who own a controlling share in one of Savola's OpCos and its subsidiaries and the disclosure shall be made as per regulations.
6) Conflict of Interest Associated with the Board
- A Board member shall not, without an authorization of the GA in accordance with the procedures approved by the competent authority has any interest (whether direct or indirect) in the Company’s activities and contracts.
- A Board member shall notify the Board about any personal interest he/she may have in the activities and contracts that are undergone for the Company’s account. Such notification shall be included in the minutes of the meeting. A Board member who has an interest shall not be entitled to vote on the resolution to be adopted in this regard.
- The Chairman shall notify the GA, when convened, about the activities and contracts in which a Board member may have a personal interest, 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 procedures approved by the Board, provided that such businesses are assessed on annual basis, and shall attach to this notification a special report from Savola’s external auditor.
- A Board member shall not, without an authorization of the GA in accordance with the procedures approved by the competent authority, participate in any activity which may likely compete with Savola’s activities, or trade in any branch of the activities carried out by Savola.
- Refusal to renew licenses: If the GA refuses to grant the license under Articles (71) and (72) of the Companies Law and Article (46) of the CGR issued by the CMA, the Board member shall submit his resignation within a time limit determined by the GA, otherwise, its membership in the Board shall be considered terminated, unless he/she decides to renounce the contract, deal or compete or adjust its conditions according to the Companies Law and its implementing regulations before the expiration of the time limit prescribed by the GA.
- The Board shall take into account the requirements of independency and the cases of conflicts of interest, according to the regulations issued by the CMA, when appointing financial and legal advisors and auditors.
- The following shall considered as participating to any business that may compete with Savola or any of its activities:
- A Board member establishing a company or his/her ownership includes a controlling percentage of shares or stakes in a company which engages in business activities that are similar to that of Savola or its group;
- Accepting membership in the Board of a company that competes with Savola or its group; and
- The Board member acts either in an obvious or secretive manner towards a commercial agent for the benefit of another company that competes with Savola or its group.
7) Conflicts of Interest Associated with Savola’s Executive Management and Employees
The Board shall be notified of any external activities performed by an Executive Management team; the Board shall approve such activities and the disclosure shall be made as per regulations. Any Senior Executive/employee who wishes to do so, shall present the matter to the CEO to study the matter, evaluate it and provide recommendation to be submitted to the Board for a decision.
8) Conflicts of Interest Associated with External and Internal Auditors and Consultants
- Savola’s external auditors shall be independent.
- The internal auditors' independency shall be preserved and shall have enough support to carry out their internal audit role and shall report functionally to the Audit Committee and administratively to the Company's management.
- When appointing any legal or financial advisor or external auditors, the cases of conflicts of interest shall be taken into consideration as per the applicable laws and regulations.
9) Conflicts of Interest Associated with other Stakeholders
All transactions and contracts undergone with suppliers and the other clients of the Company or its OpCos or subsidiaries shall be subject to the same conditions applied to third parties in terms of evaluation, equitable execution, disclosure and required reporting.
10) Other Miscellaneous Provisions
In addition to the above, Savola Group shall consider and deal with the following cases of conflicts of interest for the members of the Board, the Committees and employees, as per the following:
- Members of the Board, the Committees and employees shall not be allowed to misuse or benefit from the Company's assets, resources, information or investment opportunities presented to the Company or them for any personal interest, for their own benefit, or for other purposes that do not fall within the scope of Savola’s activity. This includes investment opportunities which are within the activities of the Company, or which the Company wishes to make use of. Such prohibition shall extend to Board members who resign to use investment opportunities, directly or indirectly, that the Company wishes to use, which may have come to their knowledge during their membership in the Board.
- Members of the Board shall be prohibited from voting on a decision taken by the Board or the GA with respect to transactions and contracts that are executed for the Company’s account, if he/she has a direct or indirect interest therein.
- No member of the Board or Senior Executives may accept gifts from any person who has entered into commercial transactions with the Company if such acceptance of gifts may lead to conflicts of interest unless the gift has unsubstantial value of not more than SAR 1,000 and a refusal to accept it would be discourteous or otherwise harmful to Savola.
- The Company shall disclose any contracts when it enters into a transaction with a Related Party, this shall include notifying the CMA and the public without any delay of that contract or transaction if it equals to or exceeds 1% of the Company's total revenues according to the last annual audited financial statements unless a Board member have any interest (whether direct or indirect) in this case he/she shall have authorization of the GA as per regulations.
- Once a member has notified the Board of a potential conflict of interest, the interested Board member shall:
- Not participate in discussions or be permitted to hear the Board’s or Committee’s discussions in which they are an interested party, except to disclose material facts and to respond to questions.
- Abstain from voting on decisions after notifying the Board. In all cases, when the Board is voting on an issue in which a Board member has a potential conflict of interest, all voting must be done anonymously.
- Protect the confidentiality of the information related to the Company and its activities, and not to disclose any of such information to any person.
- In other than the meetings of the ordinary general assembly, the members of the Board of directors may not disclose the company’s confidential information that may have become known to them, nor may they use any information known to them by reason of their position as members with a view toward achieving any benefit for themselves or for their relatives or third parties. Otherwise, they shall be dismissed and compensation must be claimed from them.
12) Disclosure of Conflicts of Interest
All Board members and employees shall be committed to immediately disclose and notify about their following personal interests:
- Interests regarding investment or ownership in a commercial activity or a facility having interests or providing services to any of the OpCos or its subsidiaries, benefiting from the Company and its OpCos, or receiving any services from them.
- A commercial activity or any facility providing or seeking to provide a particular service with any of the Company's OpCos or subsidiaries, such as banks, media, etc.
- Any interest with a customer, client or any other facility which receives a service or benefits from the Company or its OpCos.
- A commercial activity, client or any other facility which is in a position to benefit from any procedures performed by a Board member or employee.
- Direct or indirect interests to any member of the Board, Senior Executives, direct relatives, or submitting a denying proof.
- Summary of current and proposed contracts to members of the Board, the CEO, and Senior Executives.
- Full details of any contract or arrangement in which the CEO, the CFO, Board members or any relative has substantial interest and is important for the Company's activities, or submitting a denying proof.
A person who desires to nominate himself/herself for the membership of the Board shall disclose to the Board or the GA any cases of conflict of interest, including having a direct or indirect interest in the contract and businesses entered into for the benefit of the Company in which he/she desires to be nominated to the Board; and engaging in a business that may compete with the Company or any of its activities.
13) Monitoring the Implementation and Violations of the Policy
The Audit Committee shall supervise the implementation of this policy, through a review of cases, transactions and contracts that are made with stakeholders or that are likely to result in conflicts of interest and shall submit the recommendations it deems necessary to the Board. Moreover, any violations regarding this policy may be reported using the procedures outlined in the whistle blowing policy, regulating relationship with stakeholders’ policy and complaint policy.
14) Review and Amendments of this Policy
This policy shall be effective once approved by the Board. The Board shall review this policy from time to time as required, any amendments shall only be made upon the Board’s approval.
This policy is published on Savola’s website to enable the stakeholders to access it or on any other publication as deemed appropriate by the Board.
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