The Duty and responsibility of the B.O.D

Be informed of BOD duties and responsibilites

INTRODUCTION

Board Committees are established to assist the Board of Directors in performing its duties. We recommend the establishment of the following four Board Committees:

  • Audit Committee;
  • Board Executive Committee;
  • Nomination and Governance Committee; and
  • Remuneration Committee.

The following Terms of References principally apply to the Board of Directors of Qatar Industrial Manufacturing Company Q.S.C. (hereinafter ‘QIMC’ or the ‘Company’). They have been developed taking into consideration leading corporate governance practices (Qatar Financial Markets Authority’s Corporate Governance Code for Listed Companies, UK Combined Code, OECD Principles for Corporate Governance, US Conference Boards Governance Best Practices Manual …etc.) as well as the Qatar Commercial Companies Law.

Amendments:

These Terms of References may be amended by a majority vote cast of the members of the Board present at any meeting, on condition that the proposed amendment or amendments should not contradict with the Articles of Association of the Company and local rules and regulations (e.g., Qatar Commercial Companies Law, Qatar Financial Markets Authority’s Corporate Governance Code for Listed Companies).

Abbreviations used in this document:

BOD Board of Directors

CEO Chief Executive Officer

IFRS International Financial Reporting Standards

MD Managing Director

QFMA Qatar Financial Markets Authority

Audit Committee

COMMITTEE COMPOSITION
NUMBER OF MEMBERS & MIX
  • Composed of at least three Non-Executive Members and the majority of whom should be independent. Furthermore, the Chairman of the Committee should be independent.
  • The Audit Committee must include at least one member with financial and audit experience.
  • The Chairman of the Board shall not be a member of the Audit Committee.
COMPOSITION
  • Independent
  • Independent
  • Independent/ Non-Executive
  • Chairman and MD
  • CEO
  • Head of Internal Audit
  • External Auditor
  • Director Finance and Administration
  • Legal Expert
  • Any other external party/ QIMC employee as deemed appropriate
  • Committee Chairman
  • Member
  • Member
  • (by Invitation)
  • (by Invitation)
  • (by Invitation)
  • (by Invitation)
  • (by Invitation)
  • (by Invitation)
  • (by Invitation)
  • (by Invitation)
TERM Valid membership of the Board is a pre-requisite to membership in the Audit Committee. The membership will run concurrently with the term spent on the Board and will be for a maximum three year renewable period.

 

COMMITTEE MEMBERSHIP
QUALIFICATIONS AND REQUIREMENTS
  • At least one member should have financial and audit experience.
  • The Chairman should be a financial or accounting specialist.
NOMINATION
  • The Board should approve appointments of the Committee members.
RESIGNATION
  • Three months notice, approved by the Board.
COMPENSATION
  • The committee Chairman and members shall be remunerated on a per meeting basis in accordance with the compensation and benefits structure approved by the Board.
SECRETARY
  • Appointed by the Audit Committee, the Committee Secretary will be responsible for maintaining all committee documentation, distribution of meeting agendas, arranging for committee meetings in addition to other duties included in the job description of the Committee Secretary.


COMMITTEE MEETINGS
VENUE
  • QIMC Head Office or other location approved by the Committee Chairman.
FREQUENCY
  • At least four times per year and at least once every three months; and .
  • At least once a year with Head of Internal Audit and external auditors.
INVITATION & AGENDA
  • Agenda for each Audit Committee meeting shall be circulated at least one week prior to the date of the meeting..
QUORUM
  • Majority of members including Chairman.
  • No proxy voting or member replacement allowed.
  • The Chairman shall appoint a member of the Committee to head the meeting during his absence.
DECISION MAKING
  • Majority Consent, the Chairman’s vote decides in case of any ties.
ACCESS TO INFORMATION
  • The Committee, in performing its functions, may as appropriate have unrestricted access to Company records and any other documents, reports, material or information in the possession of any employee or external advisor of the Company.
MINUTES OF MEETING
  • The Committee Secretary keeps records of the meeting discussions and decisions and circulates minutes of each meeting within one week after the meeting for comments and approval of the minutes.
  • The minutes are to be signed by the Chairman of the meeting.
  • The minutes of meeting shall be kept by the Secretary and shall be open for inspection by any director of the Company’s Board.


COMMITTEE RESPONSIBILITIES
FINANCIAL STATEMENTS
  • Review significant accounting and reporting issues, including complex or unusual transactions, highly judgmental areas and recent professional or regulatory pronouncements, and understand their impact on the financial statements of the Company including related entities falling under any jurisdiction inside or outside Qatar.
  • Review with management and the external auditors the results of the audit, including any difficulties encountered. .
  • Review the annual financial statements and the yearly, half-yearly and quarterly reports, and consider whether they are accurate, valid, complete, and consistent with the information known to committee members and reflect appropriate accounting standards and principles.
  • Ensure that the financial statements and reports are in compliance with accounting policies and practices determined by the QFMA, the applicable listing rules of the Qatar Exchange, and with disclosure rules and any other requirements relating to the preparation of financial reports.
  • Review the Company’s financial report, notes to the financial report and related regulatory filings before release and consider the accuracy and completeness of the information as applicable.
  • Review with management and the external auditors all matters required to be communicated to the committee under generally accepted auditing standards.
  • Understand how management develops interim financial information, and the nature and extent of internal audit, external audit and state audit bureau involvement and coordination.
  • Review interim financial reports with management and the external auditors before filing with the applicable regulators, and consider whether they are complete and consistent with the information known to committee members.
  • Review any legal and regulatory matters that may have a material impact on the financial statements of the Company.
INTERNAL CONTROLS
  • Obtain explanations from management, internal auditors and external auditors on whether the Company’s financial and operating controls are adequate and functioning effectively.
  • Consider the effectiveness of the Company’s management of risks and internal controls over annual and interim financial reporting, regulatory and other reporting, including information technology security and controls.
  • Consider how management is to be held accountable for the security of computer systems and applications and the contingency plans for processing financial information in the event of a system breakdown.
  • Understand the scope of internal and external auditors’ review of internal control over financial reports and obtain reports on significant findings and recommendations, together with management responses.
  • Consider with internal and external auditors any fraud, illegal acts, deficiencies in internal control or other similar areas.
  • Review and approve the appointment, replacement or dismissal of the Compliance personnel and their remuneration.
  • Review the effectiveness of the system for monitoring compliance with applicable laws, regulations and standard. Monitor the results of management’s investigation and follow-up (including disciplinary action if applicable) of any instances of non-compliance within QIMC or its related entities.
  • Review the findings of inspections by any regulatory body.
INTERNAL AUDIT
  • Review and approve the charter, plans, activities, staffing and organizational structure of QIMC Internal Audit function.
  • Review and approve the appointment, replacement, relocation or dismissal of audit personnel as well as their remuneration.
  • Review internal audit reports and discuss the findings with the Head of Internal Audit and management.
  • Ensure there are no unjustified restrictions or limitations on the functioning of the Company’s Internal Audit, as well as on Internal Audit’s access to Company records, documents, personnel as and when required in performance of their functions.
  • Review the effectiveness of the Internal Audit function, including compliance with the Institute of Internal Auditors’ Standards for the Professional Practice of Internal Auditing and other applicable standards and best practices.
  • On a regular basis, meet separately with the Head of Internal Audit to discuss any matters that the Committee or the Head of Internal Audit believe should be discussed privately.
  • Ensure that management responds to recommendations by the internal auditors and that all information, records…etc. sought for and required by internal auditors in the performance of their formal duties are made available to them by management in an unhindered manner.
EXTERNAL AUDIT
  • Review the external auditors’ proposed audit scope and approach, including coordination of audit effort with Internal Audit.
  • Discuss with the external auditor the nature, scope and efficiency of the audit performed by them in accordance with International Standards on Auditing and IFRS.
  • Review the performance of the external auditors and recommend final discharge of the auditors. In case of any conflict with the Board, the decision will be documented.
  • Confirm and assure the independence of the Head of Internal Audit and external auditors, including a review of management consulting services and related fees provided by the external auditors annually.
  • Make recommendations to the Board of Directors regarding the appointment/reappointment of the external auditors.
  • Review and discuss quarterly reports from external auditors on all critical accounting policies and practices and any significant financial reporting issues and judgment made in connection with the preparation of QIMC’s financial statements.
  • On a regular basis, meet separately with the external auditors to discuss any matters that the Committee or auditors believe should be discussed privately, including management responses to their reports.
  • Ensure that the Head of Administrative and Financial Affairs reports to the Committee on a periodic basis regarding any non-audit services provided by the external auditor; and the level of fees paid for providing such services.
RISK MANAGEMENT
  • Review progress made in the identification of operational, market, strategic, legal and reputational risks, ensure implementation of action plans to monitor and manage these risks.
  • Review progress made by QIMC in identifying and assessing risks faced by the Company and its related entities.
  • Review and monitor fraud and other operational losses across the Company.
  • Review the processes and control framework for the management of risks that QIMC is exposed to.
  • Define the risk management roles and responsibilities across the Company.
  • Review reports submitted to the Committee from the Risk function with regard to risk management practices in QIMC.
PRESENTING REPORTS
  • Regularly report to the Board of Directors about committee activities, issues and related recommendations.
  • Subject to applicable regulatory requirements, report annually to the shareholders describing the Committee’s composition, role and responsibilities and how they were discharged and any other information required by regulations.
  • Review and monitor fraud and other operational losses across the Company.
  • Review the processes and control framework for the management of risks that QIMC is exposed to.
  • Define the risk management roles and responsibilities across the Company.
  • Review reports submitted to the Committee from the Risk function with regard to risk management practices in QIMC.
  • Regularly report to the Board of Directors about committee activities, issues and related recommendations.
  • Subject to applicable regulatory requirements, report annually to the shareholders describing the Committee’s composition, role and responsibilities and how they were discharged and any other information required by regulations.
  • Report to the Board on issues of integrity of financial statements, legal matters, risk matters, compliance matters and significant audit issues and recommendations.
OTHER RESPONSIBILITIES
  • Review any other reports the Company issues that relates to the committee’s area of responsibility.
  • Conduct an annual self-evaluation of the performance of the Committee, including its effectiveness and compliance with its Terms of Reference.
  • Perform other activities related to the approved Internal Audit Charter of the Company as requested by the Board of Directors.
  • Annually review the Committee’s Terms of Reference and recommend to the Board any changes, where applicable.
  • Supervise and oversee the conduct of special investigations as and when needed.
  • Obtain independent professional financial and risk management advice where necessary to assist it in the proper exercise of its powers and responsibilities, with the cost to be borne by the Company.
  • Perform any additional activities delegated by the Board.


COMMITTEE MEMBERSHIP
NOMINATION
  • The Board shall appoint members to Board Executive Committee.
RESIGNATION
  • Three months notice, approved by the Board.
COMPENSATION
  • The Committee chairman and members shall be remunerated on a per meeting basis in accordance with the compensation and benefits structure approved by the Board.
SECRETARY
  • Appointed by the Committee, the Committee Secretary maintains Committee records, distributes agendas and arranges for Committee meetings in addition to any other responsibility documented in the Secretary’s job description.


COMMITTEE MEETINGS
VENUE
  • QIMC Head Office, or other location approved by the Committee Chairman.
FREQUENCY
  • Every two months and at any time upon request from the Committee Chairman when deemed necessary.
INVITATION & AGENDA
  • Majority of Members including the Chairman.
  • No proxy voting or member replacement allowed.
  • The Chairman shall appoint a member of the Committee to head the meeting during his absence.
QUORUM
  • Majority of Members including the Chairman.
  • No proxy voting or member replacement allowed.
  • The Chairman shall appoint a member of the Committee to head the meeting during his absence.
DECISION MAKING
  • Majority Consent, the Chairman’s vote decides in case of any ties.
MINUTES OF MEETING
  • The Committee Secretary keeps records of the meeting discussions and decisions and circulates minutes of each meeting within one week of the meeting for comments and approval of the minutes.
  • The minutes are to be signed by the Chairman of the meeting.
  • The minutes of meeting shall be kept by the Secretary and shall be open for inspection by any director of the Company’s Board.


COMMITTEE RESPONSIBILITIES
BOARD SUPPORT AND PERFORMANCE
  • Act as a consultative body to the Board.
  • Report sufficient information to enable the Board to monitor overall performance of QIMC.
  • Review financial and operational performance of QIMC and its related entities and report to the Board on the same.
FINANCIAL AND INVESTMENTS
  • Review changes relating to QIMC’s capital structure and significant changes to the management and control structure and recommend to the Board for approval.
  • Facilitate the effective supervision and overall control of the business of the Company by monitoring QIMC investment performance and reviewing related investment exposures based on reports received from management. Periodically report to the Board the status of QIMC investments.
  • Authorize those individual transactions which fall within the authorities delegated to the Board Executive Committee by the Board of Directors.
  • Approve investment facilities above the authorized limit set for management and the related management committee up to the Board Executive Committee limit delegated by the Board of Directors.
  • Review investment proposals above the Board Executive Committee limit and provide recommendations on reviewed proposals to the Board of Directors.
  • Recommend to the Board of Directors appropriate action pertaining to impaired investments cases or obligation above the delegated limit.
  • Review on a quarterly basis the status of pending litigation matters.
  • Approve purchase and expenditure for amounts within the limit delegated to the Committee by the Board of Directors.
FINANCIAL AND INVESTMENTS
  • Approve donations for charity activities and corporate social responsibility expenditures on a case-by-case basis in line with delegated limits to the Committee as approved by the Board of Directors and the corporate social responsibility strategy.
  • Approve any impairment within the delegated authority.
  • Approve acquisitions of fixed assets (excludes investment and project purchases) not within the approved capital budget as per the delegated authority in coordination with the Chairman and Managing Director.
OTHER
  • Conduct an annual self-evaluation of the performance of the committee, including its effectiveness and compliance with its Terms of Reference.
  • Report regularly to the Board on committee findings, recommendations and any other matters the committee deems appropriate or the Board requests.
  • Annually review the committee’s Terms of Reference and recommend to the Board any changes, where applicable.
  • Perform any additional activities delegated by the Board.


Nomination and Governance Committee

COMMITTEE COMPOSITION
NUMBER OF MEMBERS
  • Composed of three members who are independent Board Members.
  • The Chairman of the Board shall not be a member of the Nomination and Governance Committee.
COMPOSITION
  • Independent
  • Independent
  • Independent
  • Chairman and/or Executive Management as and when needed
  • Any other external party/ QIMC Employee as deemed appropriate.
  • Committee Chairman
  • Member
  • Member
  • (by Invitation)
  • (by Invitation)
TERM For board members, valid membership of the Board is a pre-requisite to membership in the Nomination and Governance Committee. Membership to the Committee will run concurrently with the term spent on the Board and will be for a maximum three year renewable period.


COMMITTEE MEMBERSHIP
NOMINATION
  • The Board shall appoint members to the Nomination and Governance Committee based on the available pool of independent members from the Board.
RESIGNATION
  • Three months notice, approved by the Board.
COMPENSATION
  • The Committee Chairman and members shall be remunerated on a per meeting basis in accordance with the compensation and benefits structure approved by the Board.
SECRETARY
  • Appointed by the Committee, the Committee Secretary maintains committee records, distributes agendas and arranges for Committee meetings in addition to any other responsibility documented in the Secretary’s job description.


COMMITTEE MEETINGS
VENUE
  • QIMC Head Office, or other location approved by the Committee Chairman.
FREQUENCY
  • Minimum twice a year.
INVITATION & AGENDA
  • Agenda for each Nomination and Governance Committee meeting shall be circulated at least one week prior to the date of the meeting.
QUORUM
  • Majority of Members including the Chairman.
  • No proxy voting or member replacement allowed.
  • The Chairman shall appoint a member of the Committee to head the meeting during his absence.
DECISION MAKING
  • Majority Consent, the Committee Chairman’s vote decides in case of any ties.
MINUTES OF MEETING
  • The Committee Secretary keeps records of the meeting discussions and decisions and circulates minutes of each meeting within one week of the meeting for comments and approval of the minutes.
  • The minutes are to be signed by the Chairman of the meeting.
  • The minutes of meeting shall be kept by the Secretary and shall be open for inspection by any director of the Company’s Board.


COMMITTEE RESPONSIBILITIES
NOMINATION
  • Identify and nominate new Board member candidates that demonstrate the ability and oversight to make sound decisions on behalf of the Company and its shareholders.
  • Review and approve Board and management selection to key subsidiaries/ joint ventures. Approve QIMC personnel appointment to the management of any QIMC entity.
  • Evaluate the annual performance of the current BOD and recommend BOD members appointments and re-nomination for election by the General Assembly.
  • Ensure that nominations take into account the candidates’ sufficient availability to perform their duties as Board Members, in addition to their skills, knowledge and experience as well as professional, technical, academic qualifications and personality and nominations should be based on the ‘Fit and Proper Guidelines for Nomination of Board Members’ annexed to the QFMA Corporate Governance Code.
  • Provide recommendations concerning the appropriate size and composition of the Board, including :
    • The composition and functions of Board Committees,
    • All matters relating to the effective functioning of the Board members.
  • Establish criteria for selecting new Board members, and exercise oversight of the evaluation of the Board and management.
  • Conduct an annual self-assessment of the Board’s performance and Board Committees.
  • Assess and evaluate members based on criteria including:
    • Their integrity and judgment;
    • Their records of public service;
    • Their ability to devote sufficient time to the affairs of the Company; and
    • The diversity of backgrounds and experience they will bring to the Board.
  • Exercise the authority, if need be, to retain and terminate any search firm to be used to identify BOD candidates, including authority to approve the search firm’s fees and other retention terms.
  • The Committee ensures that all BOD candidates should be individuals of substantial accomplishment with demonstrated leadership capabilities, and represents all shareholders and not any special interest group of constituency.
GOVERNANCE
  • Review and assess on a periodic basis any changes to international and local corporate governance practices that could have an impact on how the Company operates and manages its governance policies. Eventually, recommend any changes thereto to the full Board of Directors.
  • Consider any governance non-compliance matters and recommend to the Board actions to resolve the same as applicable.
  • Recommend actions with regard to changes in governance practices and compliance within QIMC and its related entities’ governance policies.
  • Recommend to the Board the approval of QIMC’s Corporate Governance policy.
OTHER
  • Conduct an annual self-evaluation of the performance of the Board as a whole and the committee.
  • Report regularly to the Board on committee findings, recommendations and any other matters the committee deems appropriate or the Board requests.
  • Perform any additional activities delegated by the Board.
  • Annually review the committee’s Terms of Reference and recommend to the Board any changes, where applicable.


Remuneration Committee

COMMITTEE COMPOSITION
NUMBER OF MEMBERS
  • Composed of three members who are non-executive Board Member (a majority of whom are independent).
  • The Chairman of the Board shall not be a member of the Remuneration Committee.
COMPOSITION
  • Independent
  • Independent
  • Independent/ Non-Executive
  • Chairman and/or Executive Management as and when needed
  • Any other external party/ QIMC employee as deemed appropriate.
  • Committee Chairman
  • Member
  • Member
  • (by Invitation)
  • (by Invitation)
TERM For board members, valid membership of the Board is a pre-requisite to membership in this Committee. Membership to the Committee will run concurrently with the term spent on the Board and will be for a maximum three year renewable period.


COMMITTEE MEMBERSHIP
NOMINATION
  • The Board shall appoint members to the Remuneration Committee based on the available pool of independent members and non-executive members from the Board.
RESIGNATION
  • Three months notice, approved by the Board.
COMPENSATION
  • The Committee Chairman and members shall be remunerated on a per meeting basis in accordance with the compensation and benefits structure approved by the Board.
SECRETARY
  • Appointed by the Committee, the Committee Secretary maintains committee records, distributes agendas and arranges for Committee meetings in addition to any other responsibility documented in the Secretary’s job description.
COMMITTEE MEETINGS
VENUE
  • QIMC Head Office, or other location approved by the Committee Chairman.
FREQUENCY
  • Minimum two times per year.
INVITATION & AGENDA
  • Agenda for each meeting shall be circulated at least one week prior to the date of the meeting.
QUORUM
  • Majority of Members including the Chairman.
  • No proxy voting or member replacement allowed.
  • The Chairman shall appoint a member of the Committee to head the meeting during his absence.
DECISION MAKING
  • Majority Consent, the Committee Chairman’s vote decides in case of any ties.
MINUTES OF MEETING
  • The Committee Secretary keeps records of the meeting discussions and decisions and circulates minutes of each meeting within one week of the meeting for comments and approval of the minutes.
  • The minutes are to be signed by the Chairman of the meeting.
  • The minutes of meeting shall be kept by the Secretary and shall be open for inspection by any director of the Company’s Board.


COMMITTEE RESPONSIBILITIES
REMUNERATION FRAMEWORK
  • Develop a remuneration policy covering BOD and key executives. Such policy will specify the relationship between remuneration and performance, and include measurable standards that emphasize long-term QIMC interests.
  • Develop a transparent framework for remuneration of executive management to attract, retain and motivate qualified individuals required to run QIMC successfully.
  • Develop the remuneration policy for executive members appointed to QIMC related entities. Provide advice to directors appointed to QIMC’s related entities with regard to director and executive management compensation.
  • Obtain Board approval on the remuneration policy. Present the remuneration policy to the General Assembly for ratification.
EXECUTIVE MANAGEMENT REMUNERATION
  • Set corporate goals and objectives relevant to the Chairman and MD, CEO and other Executive Management, ensuring that remuneration is set based on the achievement of long term and strategic goals.
  • Recommend to the Board the compensation for current and newly appointed Executive Management in line with market compensation levels in the industry.
  • Approve the terms of employment, service contract, scope of pension arrangements, basis of bonus and increment awards and terms for cessation of employment of the CEO, and other Executive Management positions.
  • Review of the compensation and benefits structure for employees of the Company and present recommendations to the Board for approval.
  • Review with management competitor market data, trend analysis, QIMC’s performance and the methodology for determining the annual compensation pools.
  • Review and approve any negotiated severance and retirement agreements in accordance with the applicable working instructions.
  • Review and approve any mandatory disclosure of management compensation.
  • Review and evaluate annually the CEO and other Executive Management’s performance against such established long term corporate goals and objectives, and report its findings to the Board.
  • Determine terms of any compensation package in the event of an early-agreed termination of contracts of Executive Management.
BOARD
  • Annually review the compensation (including any bonuses) for Board Members and determine whether the same is in accordance with the remuneration policy.
  • Periodically review compensation provided to Board Members for consultancy/ other activities.
  • Periodically recommend changes to Boar remuneration in accordance with market practices.
RELATED ENTITIES
  • Set/ recommend related entity board compensation packages taking into consideration ownership and rules and regulations.
  • Periodically review compensation packages for related entities’ executive management.
OTHER RESPONSIBILITIES
  • Conduct an annual self-evaluation of the performance of the Committee, including its effectiveness and compliance with its Terms of Reference.
  • Annually review the Committee’s Terms of Reference and recommend to the Board any changes, where applicable.
  • Obtain professional advice including the advice of independent remuneration consultants, as deemed necessary in the setting of remuneration.
  • Determine the retention or termination of remuneration consultants, and approve consultant’s fees and terms of engagement.
  • Report regularly to the Board on Committee findings, recommendations and any other matters the Committee deems appropriate or the Board requests.
  • Review periodically information on employee expense regulations.
  • Perform any additional activities delegated by the Board.