The following words and phrases indicate the meanings specified in front of them unless the context requires otherwise:
Companies Law: The Companies Law issued by Royal Decree No. (M/3) dated 28/1/1437 AH.
Capital Market Law: The Capital Market Law issued by Royal Decree No. (M/30) dated 2/6/1424 AH.
Rules for Offering Securities and Continuous Obligations: Rules for Offering Securities and Continuous Obligations issued by the Board of the Capital Market Authority.

Listing Rules: Listing rules approved by the Board of the Capital Market Authority.
The Authority: The Capital Market Authority.
The Market: The Saudi Financial Market.
The Company: A joint-stock company listed in the market.
The Board of Directors: The Board of Directors of the company.
Corporate Governance: Rules for leading and directing the company that include mechanisms for organizing the various relationships between the Board of Directors, executive directors, shareholders, and stakeholders, by establishing specific rules and procedures to facilitate the decision-making process and to impart transparency and credibility to it, with the aim of protecting the rights of shareholders and stakeholders and achieving fairness, competitiveness, and transparency in the market and business environment.
Shareholders' Assembly: An assembly formed by the company's shareholders in accordance with the provisions of the Companies Law and the company's bylaws.
Executive Member: A member of the Board of Directors who is dedicated to the executive management of the company and participates in its daily operations.
Non-Executive Member: A member of the Board of Directors who is not dedicated to managing the company and does not participate in its daily operations.
Independent Member: A non-executive member of the Board of Directors who enjoys complete independence in his position and decisions, and none of the independence impairments stipulated in Article 20 of these regulations apply to him.
Executive Management or Senior Executives: Individuals responsible for managing the company's daily operations, proposing strategic decisions, and implementing them, such as the CEO, his deputies, and the CFO.
Relatives or Kinship:
- Parents, grandparents, and great-grandparents, regardless of their lineage.
- Children and their descendants, regardless of their lineage.
- Full siblings, half-siblings, or siblings by mother.
- Spouses.
Holding Company: A joint-stock company or limited liability company aimed at controlling other joint-stock or limited liability companies known as subsidiaries, by owning more than half of the capital of those companies or by controlling the formation of their Board of Directors.
Person: Any natural or legal person recognized by the laws of the Kingdom in this capacity.
Related Parties:
A) Major shareholders in the company.
B) Members of the Board of Directors of the company or any of its subsidiaries and their relatives.
C) Senior executives in the company or any of its subsidiaries and their relatives.
D) Members of the Board of Directors and senior executives at major shareholders in the company.

E) Entities – other than companies – owned by a member of the Board of Directors or one of the senior executives or their relatives.
F) Companies in which any of the members of the Board of Directors or senior executives or their relatives are partners.
G) Companies in which any of the members of the Board of Directors or senior executives or their relatives are members of its Board of Directors or senior executives.
H) Joint-stock companies in which any of the members of the Board of Directors or senior executives or their relatives own 5% or more, taking into account what is stated in paragraph (D) of this definition.
I) Companies in which any of the members of the Board of Directors or senior executives or their relatives have influence over its decisions, even by providing advice or guidance.
J) Any person whose advice and guidance influence the decisions of the company and its Board of Directors and senior executives.
K) Holding or subsidiary companies of the company.
Exempted from paragraphs (I) and (J) of this definition are the advice and guidance provided professionally by a licensed person in that regard.
The Group: In relation to a person, it means that person and all of their affiliates.
Affiliate: A person who controls another person, or is controlled by that other person, or shares with them in being controlled by a third person. Control in any of the above may be direct or indirect.
Stakeholders: Anyone with an interest in the company, such as employees, creditors, customers, suppliers, and the community.
Major Shareholders: Anyone who owns 15% or more of the company's shares or voting rights therein.
Cumulative Voting: A voting method for selecting members of the Board of Directors that grants each shareholder voting power equal to the number of shares they own; allowing them to vote for one candidate or distribute their votes among the candidates of their choice without repeating those votes.
Control Share: The ability to influence the actions or decisions of another person, directly or indirectly, alone or in conjunction with a relative or affiliate, through: (A) owning 30% or more of the voting rights in a company. (B) The right to appoint 30% or more of the members of the administrative body.
Administrative Body: A group of individuals who make strategic decisions for the person. The Board of Directors of the company is considered its administrative body.
Compensation: Amounts, allowances, profits, and similar benefits, periodic or annual bonuses linked to performance, short or long-term incentive plans, and any other in-kind benefits, excluding reasonable actual expenses incurred by the company on behalf of a Board member for the purpose of performing their duties.
Day: A calendar day, whether it is a working day or not.

• A) This Regulation outlines the rules and standards governing the management of the company to ensure compliance with the best practices of corporate governance that protect the rights of shareholders and stakeholders.

• B) This Regulation is mandatory for companies, except for provisions that are indicated to be advisory.

• C) Without prejudice to the provisions of this Regulation, the regulations and instructions of other supervisory authorities shall apply to companies that are subject to their oversight.

• The purpose of this Regulation is to establish an effective legal framework for corporate governance, specifically aiming to:

  • 1) Activate the role of shareholders in the company and facilitate the exercise of their rights.

  • 2) Clarify the competencies of the Board of Directors and the executive management and their responsibilities.

  • 3) Enhance the role of the Board of Directors and its committees and develop their efficiency to strengthen decision-making mechanisms in the company.

  • 4) Achieve transparency, integrity, and fairness in the financial market and its transactions, and in the business environment, and enhance disclosure therein.

  • 5) Provide effective and balanced tools to deal with conflicts of interest.

  • 6) Strengthen mechanisms for oversight and accountability for employees in the company.

  • 7) Establish a general framework for dealing with stakeholders and considering their rights.

  • 8) Increase the efficiency of oversight over companies and provide the necessary tools for that.

  • 9) Raise awareness among companies about the concept of professional conduct and encourage them to adopt and develop it in accordance with their nature.

• A) The Board of Directors is committed to working to protect the rights of shareholders in a manner that ensures fairness and equality among them.

• B) The Board of Directors and the executive management of the company are committed to not discriminating between shareholders owning the same class of shares, and not withholding any rights from them.

• C) The company outlines in its internal policies the necessary procedures to ensure that all shareholders can exercise their rights.

• A) The Board of Directors is obligated to provide complete, clear, accurate, and non-misleading information to enable the shareholder to fully exercise their rights. This information should be provided in a timely manner and updated regularly.

• B) The means of providing information to the shareholder must be clear and detailed, and should include a statement of the company's information that shareholders can access, and it must be made available to all shareholders of the same class.

• C) The most effective means of communication with shareholders should be followed, and there should be no discrimination among them in providing information.

• A) The Board of Directors ensures communication between the company and the shareholders based on a mutual understanding of the company's strategic objectives and interests.

• B) The Chairman of the Board and the Chief Executive Officer work to inform the other members of the Board of Directors about the shareholders' opinions and discuss them with them.

• C) No shareholder may interfere in the work of the Board of Directors or the executive management of the company unless they are a member of its Board of Directors or its executive management, or their interference is through the ordinary general assembly and in accordance with its competencies or within the limits and conditions permitted by the Board of Directors.