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This is further envisaged in Savola as depicted in the diagram below, which shows that
there are three lines of defence whereby the Control Department is the “first line of
defence”. The multiple risk controls (i.e. financial control, quality control, etc.) in addition
to compliance oversight functions established by management are the “second line of
defence”, and independent assurance (i.e. internal audit) is the “third line of defence”.
Each of these three lines of defence plays a distinct role within Savola’s wider governance
framework. The Board and senior management are the primary stakeholders served by
the lines, and they are the parties best positioned to help ensure that the three lines of
defence are reflected in Savola’s risk management and internal control and compliance
processes.
This Framework shall apply to Savola as a joint stock company listed on the Saudi Stock
Exchange and shall regulate the relationship between the Company, its Board of Directors’
Committee and its OpCos’ Boards (where and when appropriate). Each Savola’s OpCo
shall prepare its own governance charter in the light of this Framework and in a manner
consistent with them in accordance with its legal position and bylaws and under the
supervision of its Board, its Boards’ Committees and Executive Management.
Three Lines of Defence
2)
Definitions and Abbreviations
The expressions and terms in this Framework have the meanings they bear in the
Company’s Bylaws and in the glossary of defined terms used in the regulations and the
rules of CMA, unless otherwise stated in these regulations.
For the purpose of implementing these regulations, the following expressions and terms
shall have the meaning they bear as follows, unless the contrary intention appears:
