Rule 8: Respecting Shareholders' Rights

The goals of shareholders are often to increase the value of their investments and contributions, achieve a good return on these investments, and ensure that the 8company’s management works to maximize profits. Meanwhile, the company’s management seeks to enhance competitiveness and achieve high growth rates. This conflict between the objectives of shareholders and those responsible for managing the company can lead to a waste of shareholders’ rights. Therefore, the application of governance rules ensures the compatibility of both the objectives of the shareholders and the company’s management, enhancing investors’ confidence in the efficiency of the system that protects their rights.

The disparity in the structure of the shareholder entity, consisting of diverse individuals and institutions with varying interests, goals, and capabilities, results in difficulty for shareholders to assume responsibility for managing the company’s activities. This responsibility falls on the board of directors and the management team. Consequently, shareholders’ rights are based on a set of fundamental issues and tasks, such as electing board members, forming the board of directors, amending the company’s bylaws, approving extraordinary transactions, and other essential tasks determined by the company’s regulations and bylaws.

Marafiq Company is distinguished by adopting a fundamental system based on applying the highest standards of governance and compliance with regulatory and legal requirements, achieving alignment between the company’s goals and regulatory demands.

In this context, the company has adopted a special regulation for the governance of its business called the “Marafiq Corporate Governance Regulations,” which was prepared in accordance with the provisions of the Corporate Governance Regulations issued by the Capital Market Authority in the Kingdom of Saudi Arabia.

This regulation aims to achieve the following:

1. Clarifying the rules and standards governing the company’s management to ensure adherence to the best corporate governance practices that protect the rights of shareholders and stakeholders.
2. Establishing an effective legal framework for company governance.
3. Activating the role of shareholders in the company and facilitating the exercise of their rights.
4. Defining the powers and responsibilities of the Board of Directors and Executive Management.
5. Activating the role of the Board of Directors and committees and enhancing their efficiency to improve the company’s decision-making mechanisms.
6. Achieving transparency, integrity, and fairness in the company’s dealings within the financial market and business environment, and enhancing disclosure practices.
7. Providing effective and balanced tools for addressing conflicts of interest.
8. Strengthening oversight and accountability mechanisms for the company’s employees.
9. Establishing a general framework for dealing with stakeholders and considering their rights.
10. Increasing the efficiency of company supervision and providing the necessary tools for this.
11. Consolidating the concept of professional behavior, adopting it, and developing it to suit the nature of the company.

In the same context, the company issued a policy called the “Dividend Distribution Policy,” which aims to clarify the general provisions for distributing the profits of Marafiq, based on the corporate governance regulations and the company’s bylaws.