AEC Corporate Governance Framework

Transcription

1 AEC Corporate Governance Framework Version: 1.0 Issued: 31 December 2015 Copyright: Advanced Electronics Company

2 Table of Contents SECTION 1. THE CORPORATE GOVERNANCE FRAMEWORK INTRODUCTION... 3 SECTION 2. CORPORATE GOVERNANCE COMPONENTS STRUCTURE PRINCIPLES SYSTEMS... 9 Advanced Electronics Company Copyright 2015 All Right Reserved 2

3 SECTION 1. THE CORPORATE GOVERNANCE FRAMEWORK 1.1 Introduction AEC takes a serious stand on Corporate Governance in the overall management of the company. We view Corporate Governance as more than a piece of document. It is the essence of how the Company will be managed and operated in meeting to our Vision and Mission. AEC realizes that good and effective Corporate Governance will bring forth: 1. Corporate growth and economic success; 2. Investors / shareholders confidence; 3. Reduction of wastages & mismanagement; 4. Better management of risks; 5. The AEC brand in being an ethical and professional company in its dealings. To visualize the above beliefs, AEC envisaged its Corporate Governance framework in the form of a diamond. The 3 major components of AEC s Corporate Governance diamond: 1. Structure; 2. Principles; 3. Systems. Advanced Electronics Company Copyright 2015 All Right Reserved 3

4 SECTION 2. CORPORATE GOVERNANCE COMPONENTS 2.1 Structure Structure refers the major players in the operational and strategic management of AEC. To assist the players in discharging their responsibilities, a clearly defined review, oversight, and reporting mechanism is defined. The roles and responsibilities will be clearly identified, informed, and made understood by each player that includes the following but not limited to: a. The Shareholders; b. The Board of Directors (BoD) and its subsidiary committees; c. The Executive Management team and all of AEC employees; d. The Auditors The diagram below explains the major players and the relationship that they have with each other: The following paragraphs dictate the specific roles and responsibilities of each player in the structure of the AEC Corporate Governance framework. Shareholders / Partners The rights, authority, and responsibilities of each shareholder or partner of the company shall be in reference to: 1. AEC s Article of Association (AoA); 2. The Company By Law; 3. Articles 3 to 7 of the CMA Corporate Governance Regulations (for reference of best practice ONLY) Board of Directors Members of the BoD will be appointed by the shareholders in accordance to the AoA. The number, composition of the BoD, and the general modus operandi of the BoD meetings will be dictated by the AoA and the Company By Law. The BoD is responsible for the good management of the Company and its principal aim shall be to enhance the Company s long-term value for the benefit of shareholders. Advanced Electronics Company Copyright 2015 All Right Reserved 4

5 The BoD has the responsibilities: 1. To approve the strategic plans and main objectives of the company and supervising their implementation. The specific authorities that are reserved to the BoD are listed in the Company By Law; 2. To provide oversight on the operational management of the Company that is vested to the Executive Management. Chairman of the Board / Vice Chairman of the Board The BoD shall appoint one of its members to act as The Chairman of the Board. The Chairman s is responsible for creating the conditions for the effective working of the Board where specific responsibilities will include to: 1. preside all BoD and Partners meetings; 2. approve the final version of the minutes of meeting of the BoD. The BoD shall also appoint another member to act as the Vice Chairman of the Board. The main duty of the Vice Chairman is to act in place of the Chairman whenever the Chairman is absent. Committees of the Board The Board, at its discretion, may create standing committees and may nominate the members of the said committees as it deem fit. In this aspect, Board shall periodically pursue the activities of such committees so as to ensure that the activities entrusted to those committees are duly performed. The Board shall approve the by-laws of all committees of the Board. In return, the committees shall notify the Board of its activities, findings or decisions with complete transparency. AEC s BoD has the following committees: The Audit Committee The membership of this committee shall be approved in the Partners Meeting upon recommendation by the BoD. The BoD shall also recommend the term of office and the rules to be followed by the Audit Committee. The number of members shall be not less than 3 (three). The duties and responsibilities of the Audit Committee include the following: 1. To supervise the company s internal audit function to ensure its effectiveness in executing the activities and duties specified by the BoD. 2. To review the internal audit procedure and prepare a written report on such audit and its recommendations with respect to it. 3. To review the internal audit reports and pursue the implementation of the corrective measures in respect of the comments included in them. 4. To recommend to the BoD the appointment, dismissal and the Remuneration of external auditors; upon any such recommendation, regard must be made to their independence. 5. To supervise the activities of the external auditors and approve any activity beyond the scope of the audit work assigned to them during the performance of their duties. 6. To review together with the external auditor the audit plan and make any comments thereon. 7. To review the external auditor s comments on the financial statements and follow up the actions taken about them. Advanced Electronics Company Copyright 2015 All Right Reserved 5

6 8. To review the interim and annual financial statements prior to presentation to the BoD; and to give opinion and recommendations with respect thereto. 9. To review the accounting policies in force and advise the BoD of any recommendation regarding them. 10. To review the effectiveness of the company s governance and ethics program, which shall include the management of fraud and corruption risk; The Remuneration Committee The membership of this committee shall be approved in the Partners Meeting upon recommendation by the BoD. The BoD shall also recommend the term of office and the rules to be followed by the committee. The number of members shall be not less than 3 (three). The duties and responsibilities of this committee include the following: 1. Determine and agree the framework and policy for the Remuneration of the CEO and other senior executives who report directly to the CEO. No Manager or employee shall be involved in any decisions as to his or her own remuneration. 2. Within the terms of the agreed policy, determine the individual remuneration package of the CEO and any senior executives who report directly to the CEO including, where appropriate, bonuses, incentive payments, share based incentive schemes and post retirement benefits and any other allowances. 3. Determine policy on the terms and conditions to be included in the service agreements for the CEO and any senior executives who report directly to the CEO, including termination payments and compensation commitments and any other allowances, where applicable. 4. Approve any outside directorships for the CEO or senior executives who report directly to the CEO. 5. Agree any bonus or performance related schemes operated by the Company and any targets for such scheme. 6. Liaise with partners to ensure that the Committee is aware of their views and policies concerning executive remuneration and takes account of such views when discharging its duties. Executive Management The Executive Management team is headed by the CEO. He in turn appoints a group of his most senior line and functional leaders to review and agree on issues and actions of Company-wide significance. Its main areas of focus are: 1. Developing and delivering the Company s strategy, strategic objectives and business portfolio actions 2. Leading the Company s high performance culture 3. Reviewing operational and financial performance at Company level 4. Discussing customer, shareholder and Board issues 5. Approving recommended policies and processes for mandated implementation across the Company 6. Addressing line and functional management issues Advanced Electronics Company Copyright 2015 All Right Reserved 6

7 In addition to the above, the Executive Management team has the following general responsibilities: 1. Ensure all employees have access to the local policies and processes and they are in place to implement the requirements of the procedures. 2. Ensure appropriate training and monitoring processes are in place to ensure proper implementation of the procedures at all times. 3. Embed the Company s high performance culture within their business and the development and sharing of best practices across the Company 4. Ensure that their Business fosters team working, both within their Business and with other Businesses as well as within the Company and outside it 5. Take all necessary steps to ensure that the principles of ethical conduct are reflected in all Business activities 6. Develop and deliver processes for ensuring compliance with national and international laws and regulations within their Business 7. Ensure internal controls are in place and documented that provide effective and measurable management of operational risk and performance 8. Ensure that accountability for quality is fully defined and that an appropriate business quality policy and management system is established, deployed and maintained in line with ISO 9001:2000, AS9100, AS9110 and relevant regulatory requirements 9. Ensure that the specific delegated authorities are complied with at all times 10. Ensure product safety in their Business 11. Implement an effective and comprehensive risk and opportunity management plan for their Business and ensure that an appropriate business continuity management plan is in place for their Business 12. Manage security within their Business, including compliance with Company security policies and statutory, government and contractual security requirements 13. Lead their Business in its relationship with customers and other stakeholders and the wider community in which it operates 14. Manage the control, preparation, review and approval of all bids in accordance with the delegated authorities. The President / Chief Executive Officer (CEO) The CEO is appointed by the BoD. He serves as the most senior executive in the company and is responsible for company s performance. He heads the Company s policy making body and integrates the business strategies within a diverse matrix organization. He provides the dynamic leadership for the company to achieve its strategic objectives amid the challenges of competition and in any market conditions. The CEO s appointment and limit of authority is based on the Company By Law. To enable the CEO in discharging his responsibilities, the CEO then delegates his authority to selected employees to approve strategic and operational transaction. The details of the delegated authority are defined in the Signature Authority Policy, FA-02. The Chief Financial Officer The CFO is responsible for the financial affairs of the company. His responsibilities include financial planning, budgeting, treasury operations, tax, accounting, and preparation of company financial statements. The CFO also acts as an advisor to the President & CEO in matters relating to financial aspects of the feasibility of projects as well as advises department heads in matters relating to planning of budgets and the constraints thereof. Advanced Electronics Company Copyright 2015 All Right Reserved 7

8 The CFO also develops and supervises a control system and develops procedures to safeguard physical and financial assets. He also formulates and administers financial and accounting policies and procedures to enhance management control as required by the Board of Directors and company by-laws. Further, he establishes and maintains banking relationship and cash management programs to insure meeting business requirements. Detailed roles and responsibilities of the CFO is mentioned in the Company By Law. The External Auditors The External Auditors will be appointed by the partners of the company during the annual General Meeting of the Partners. The terms of reference of the External Auditors are defined in the AoA and the Company By Law. 2.2 Principles Principles are the set of values that will be upheld and practiced by each player and stakeholder of AEC. The principles adopted by AEC are driven by its vision and mission. The management also strives to uphold the AEC s Core Values encompassing: Principles integrity & fairness; straight business dealing; transparency; accountability; compliance to applicable laws, regulations, and standards The above principles are then supported with the other sets of values, which are: People respect to all employees; fair treatment and equal opportunities; employee pride and enthusiasm; and openness and trust in all relationships; Performance customer focused and market driven; earning to support long term growth; commitment to continual improvements; Processes recognition for quality achievement; participative goal setting, measurement and feedbacks; These principles / values will be demonstrated in the form of policies. The policies will act as guides and demonstrate the expected behavioral traits. The policies include: a. Ethical Conduct Policy; b. Conflict of Interest policy; c. Approving Authority Policy; d. Anti-Fraud & Corruption Policy; And other sets of policies may be documented as need arises. Advanced Electronics Company Copyright 2015 All Right Reserved 8

9 2.3 Systems Refers to the arrays of systems available in AEC that will include but not limited to: Advanced Electronics Company Copyright 2015 All Right Reserved 9