Good corporate governance is to conduct the affairs of Al Fahim Group in a manner that is consistent with best practice, legal requirements, ethics and the core values.
The concept of corporate governance can be thought of as:
The system by which organizations are directed and controlled. By definition corporate governance encompasses all processes, customs, policies, laws and even includes people and institutions which affect the way a corporation is administered, directed or controlled.
Accordingly in 2008, we formalized and aligned Al Fahim’s Corporate Governance framework to the UAE Securities and Commodities Authority (ESCA - Decision No. R/32, Corporate Governance Regulations for Joint-Stock Companies and Institutional Discipline Criteria) Regulations and implemented all material requirements ahead of the 2010 deadline, 2 years ahead of schedule.
The key elements driving corporate governance in Al Fahim are accountability, transparency and integrity and the key dimensions are as follows:
1. Commitment >
The owners, the board and management must share the same aspiration and a common understanding of the purpose and scope of corporate governance. The interests of all the key players in the organization should be more or less aligned.
2. An Effective Board of Directors >
The board is the interface between the owners and the business. Such being the case, the board must have a clear understanding of its accountabilities, act within its powers and exercise due care in the performance of its duties and responsibilities. In addition, it must assess its own performance regularly and consider the balance of skills around the table, succession planning and continuous professional development in the fields of ethics and leadership.
3. Effective Management Controls >
Management controls should be put in place to ensure accountability of management to the board and the board’s accountability to the shareholders or owners.
4. Committees >
All organizations face risk but for success in achieving strategic objectives the board must understand and mitigate risks by placing sound internal controls and proper segregation of duties.
In 2008 we created various committees to advise the Board of Directors and appointed independent non-executive members on these committees. This strengthens our internal controls and operational capabilities, while increasing Group oversight and adding to the skills and expertise of our people.
5. Group Risk and Internal Audit Function >
Group Risk and Internal Audit is an independent, objective assurance and consulting activity designed to add value and improve the group’s operations by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. Internal Auditing covers Al Fahim's activities in accordance with the Internal Audit Charter. All areas are subject to Internal Auditing. Al Fahim considers effective risk management a fundamental element of good management practice. It is committed to maintaining risk management systems to safeguard stakeholders' investments, other stakeholders’ interests and Al Fahim’s assets, and to prevent breaches of applicable laws or regulations.
6. Disclosure and Transparency >
Both the board and management must implement independent procedures to independently verify and safeguard the integrity of financial reporting. Disclosure of material matters concerning the organization must be timely and balanced to ensure that all shareholders have access to clear and factual information. Internal and external audit are important sources of objective assessment and assurance.
7. Harmonious owner relations >
The rights of the owners must be respected and protected. The owners must be able to exercise their rights by effectively communicating information that is understandable and accessible. All the owners are treated equitably and are encouraged to participate in general meetings.
8. Code of Conduct >
Our directors and employees adhere to our Code of Conduct, which covers general business principles, compliance, privacy and confidentiality. The Code is distributed to all employees of Al Fahim Group.
9. Etisal Al Nazahah Ethics Hotline >
In line with the Code of Conduct, Al Fahim has developed an Ethics Hotline that outlines Al Fahim's commitment to ensuring its employees are able to raise concerns regarding any improper conduct without fear of victimization, harassment or discriminatory treatment, and to have such concerns properly investigated. The Ethics Hotline Line was formally launched in 2009 and allows stakeholders and employees to raise concerns in a responsible manner - without fear of discriminatory treatment - through any of its multiple channels including telephone, email, fax and surface mail. It is an independently managed toll free phone number in the United Arab Emirates manned by professionals with experience to handle such calls. It is confidential and offers anonymity.