Chapter 1: Preliminary Provisions
Article 1: Preamble
a. These regulations aim at achieving the following:
1. Direct, manage and control Corporation activities to ensure
commitment to the best practices of governance that
guarantee shareholders’ rights, stakeholders’ rights and
activation of disclosure and transparency principle to all
investors equally
2. Explain the responsibilities and powers of the Board of
Directors and its role in promoting shareholders’ rights,
preserving their interests and the transparent explanation of
the policies and procedures adopted in selecting the members
of the Board of Directors and Board committees and their
duties. This is in addition to the issuance of their
remunerations and compensations and achievement of justice
when performing the administrative duties.
3. Explain shareholders’ rights, how they obtain the
information needed for taking their investment resolutions
and explain the policies and procedures used in the
declaration and distribution of dividends.
b. The Board of Directors has developed and approved these
regulations. They are based upon Saudi Corporation Law and
its Executive Regulations, Capital Market Authority (CMA)
Bylaws (specifically Article 10/c of Corporate Governance
Regulations), the principles of SABIC Bylaws, SABIC Internal
Policies and the best practices and controls used for managing
the Corporation.
c. The information denoted in the preamble are an integral part of
these regulations.
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Board of Directors is entitled to revise and amend/add to the
regulations whenever deemed appropriate within the
framework of related rules and regulations.
Article 2: Definitions
a. The expressions and terms mentioned in these regulations shall
have the meanings set forth opposite each of them, unless it is
otherwise required by the context.
Corporation: Saudi Basic Industries Corporation (SABIC)
SABIC Articles of Association: The Articles of Association
issued by virtue of the Royal Decree no. (m/66) in 13/09/1396h
(06/09/1976g) and the amendments thereof;
Affiliate: Any other
Corporation/SABIC.
corporation
controlled
by
the
Regulations for Companies/Corporate Regulations/ Law of
Companies: Issued by virtue of the Royal Decree no. (m/6) in
22/03/1385h (11/07/1965g) and its amendments and executive
regulations
Corporate Governance Regulations: Issued by Capital Market
Authority by the resolution no. 1-212-2006 in 21/10/1427h
(12/11/2006g), amended by Capital Market Authority resolution
no. 1-10-2010 in 30/03/1431h (16/03/2010g)
Capital Market Law: issued by virtue of the Royal Decree no
(m/30) in 02/06/1424h (22/08/2003g)
Authority (CMA): Capital Market Authority established
according to the Capital Market Law issued by virtue of the
Royal Decree no. (m/30) in 02/06/1424h (22/08/2003g)
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Capital Market Website: Exchange/TADAWUL electronic
website on the INTERNET
Securities Depository Center: The Securities Depository Center
of TADAWUL
Board: Board of Directors who manages Corporation’s business
to the interest of the shareholders.
Chairman: Chairman of Board of Directors of Saudi Basic
Industries Corporation (SABIC)
Member of The Board: Covers all the members of SABIC Board
of Directors assigned by The Council of Ministers (Cabinet) and
Corporation’s General Meeting
Committees: Assigned by, emanating from, appointed by the
Board of Directors (Board Committees)
Management: Executive management represented by the
Corporation’s Chief Executive Officer, Executive Vice
Presidents, Vice Presidents and other similar executive officers
Independent Member: A member of the Board of Directors who
enjoys complete independence, as stated in Corporate
Governance Regulations issued by Capital Market Authority
Non-executive director: A member of the Board of Directors
who does not have a full-time management position at the
Corporation, or who does not receive monthly or yearly salary
Senior Executive: Any natural person who manages the
Corporation and undertakes responsibility for setting and
executing strategic decisions, to include Corporation CEO, , his
Vice Presidents and the Chief Financial Officer (CFO)
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Financial Manager: Any natural person who manages the
financial affairs of any person; whether his title was financial
manager, financial comptroller or any other title
Related Party: Means the party included in the list of terms used in
CMA regulations regarding the terms of registration and enlisting
Related Person: Means the party included in the Glossary of
Defined Terms used in the CMA Regulations and Rules with
respect to senior executives, members of the Boards of Directors
or a single shareholder owning a large percentage of shares and
also with respect to a Corporation owning a large percentage of
shares
Person: Any natural or artificial person acknowledged as such
in the laws of Kingdom of Saudi Arabia
Concerned Person: The CEO, Board of Directors member,
senior executive, any shareholder who is a single shareholder
owning a large percentage of shares or any person related to one
of the above.
Minority Shareholders: Those shareholders who represent a
class of shareholders that does not control the Corporation and
hence they are unable to influence the Corporation
First-degree relatives: Father, mother, spouse and children.
Control: The power to influence the actions or decisions of
another person, directly or indirectly, jointly or severally, by
holding a percentage of 30% or more of the voting rights of a
Corporation, or the right to nominate 30% or more of the
members of the management body/team.
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Major Shareholder: any person who holding 5% or more of
Corporation shares
Date of Entitlement / Eligibility for Profits (Date of Maturity for
Distribution of Dividends): The date of the end of exchange of
the day on which the shareholders are entitled to the dividends
that should be distributed
Accumulative Voting:
Every shareholder shall have a number of votes equal to the
number of the shares he holds. The shareholder should use all
such votes for voting to one or more candidates of his choice,
provided that he shall not exceed the number of the votes he
holds, and not to repeat such votes (The Accumulative Voting
Approach is applicable after the amendment of the Articles of
Association of the Corporation,)
Stakeholders: Any person who has an interest in the
Corporation, such as shareholders, employees, creditors,
customers, suppliers and community.
Voting rights: all the voting rights attributable to the shares of a
Corporation which are exercisable at a general meeting.
Subscription right documents: certificates of rights or other
instruments entitling their bearers to subscribe to any shares or
debt instruments
Day: A workday in Kingdom of Saudi Arabia according to the
official workdays in CMA
Calendar day: Any day; workday or else
b. Unless it is otherwise required by the context, the expressions
and terms not included in these Regulations shall have the same
meanings they bear in the Corporate Governance Regulations
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issued by CMA or in Glossary of Defined Terms used in the
CMA Regulations and Rules.
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