Rule 3: Selecting Competent Individuals for Board Membership and Executive Management

Marafiq has established rules and principles for selecting competent individuals for board membership and executive management. The board has formed a committee to prepare recommendations regarding nominations for board and executive positions, ensuring that the committee chairman is a non-executive member to maintain transparency. The committee annually reviews the necessary skills for board membership and the recruitment needs for executive positions as required.

The company has a clear policy for granting remuneration, defining different reward segments, such as fixed rewards, performance-related rewards, and end-of-service benefits. The committee's main tasks include:

1. Developing job descriptions for executive, non-executive, and independent board members.
2. Preparing a report on the rewards granted to board members, executive management, and managers, whether in cash, benefits, or any other form, directly or indirectly, from the company or its subsidiaries, according to the third rule of selecting competent individuals for board membership and executive management.
3. Preparing a clear policy for the remuneration of board members, committees, and executive management, submitting it to the board for review and approval by the general assembly, ensuring performance-based standards are followed.
4. Clarifying the relationship between the paid rewards and the approved remuneration policy, noting any significant deviations from the committee's work rules.
5. Periodically reviewing the remuneration policy and evaluating its effectiveness in achieving its goals.
6. Recommending to the board the remuneration for its members, committees, and senior executives according to the approved policy.
7. Developing clear policies and standards for board and executive management membership and recommending them to the board for approval by the general assembly.
8. Recommending board member nominations and re-nominations according to the approved membership policies and standards, ensuring that no person convicted of a crime involving honor or trust is nominated.
9. Determining the time that members should allocate to board work.
10. Reviewing the structure of the board and executive management and recommending changes as necessary.
11. Establishing procedures to follow in case of a vacancy in a board or senior executive position.
12. Identifying the board's strengths and weaknesses and proposing solutions to address them in the company's best interest.
13. Periodically reviewing the skills, knowledge, and experience required for board members, preparing a description of the tasks and capabilities needed for any new member.
14. Reviewing the company's leadership needs and executive management (CEO and vice presidents) to ensure the company's continued ability to achieve accomplishments and strategies effectively.
15. Reviewing the remuneration budgets and benefits for board members and executive management annually and recommending changes to the board's employee benefits policies and structures.
16. Establishing appropriate standards and making recommendations to the board regarding the independence of board members and nominees.
17. Annually ensuring the independence of independent board members and the absence of conflicts of interest.
18. Recommending the framework or general regulation for board members and executive management remuneration (CEO and vice presidents) and its value.
19. Determining the total individual reward package for any board member within the agreed terms, including (if applicable) other rewards and incentives.
20. Recommending the number, responsibilities, and duties of each committee, including providing advice on committee appointments and removals, committee member rotation, and structure and processes.
21. Providing recommendations on employment, retention, and termination policies for company management and participation in various reward benefits programs and recommending relevant development programs for board members.
22. Preparing an annual report for the board on its performance evaluation.
23. Providing recommendations to the board on the criteria for selecting board nominees.
24. Performing any other tasks or responsibilities expressly assigned by the board.