Governance Information

I. Introduction

II. Overview of Governance Structure

III. Committees of the Board of Directors


I. Introduction 

At Jazeera Airways Group, corporate governance is about commitment to values and ethical business conduct. It is about how we manage our business. This includes our corporate and other structures, our culture, policies and the manner in which we deal with various stakeholders. Accordingly, timely and accurate disclosure of information regarding the financial situation, performance, ownership and governance of the company is an important part of our corporate governance. This improves public understanding of the structure, activities and policies of the organization. Consequently, the Jazeera Airways Group is then enabled further to attract investors, and enhance the trust and confidence of the stakeholders.

Accordingly, we always seek to ensure that we attain our performance goals with integrity. Our Board exercises its fiduciary responsibilities in the widest sense of the term. We also endeavor to enhance long-term shareholder value and respect minority rights in all our business decisions.

Accordingly, we always seek to ensure that we attain our performance goals with integrity. Our Board exercises its fiduciary responsibilities in the widest sense of the term. We also endeavor to enhance long-term shareholder value and respect minority rights in all our business decisions.

Our corporate governance philosophy is based on the following principles:

  1. Satisfy the spirit of the law and not just the letter of the law.
  2. Be transparent and maintain a high degree of disclosure levels.
  3. Make a clear distinction between personal conveniences and corporate resources.
  4. Communicate externally, in a truthful manner, about how the company is run internally.
  5. Comply with the laws in the countries in which we operate.
  6. Have a simple and transparent corporate structure driven solely by business needs.
  7. Management is the trustee of the shareholders’ capital and not the owner.

The Board of Directors is at the core of our corporate governance practice here at Jazeera Airways Group and oversees how the Management team serves and protects the long-term interests of all our stakeholders. We believe that an active, well-informed and competent Board is necessary to ensure highest standards of corporate governance.

In compliance with the Corporate Governance Code issued by the Capital Markets Authority (CMA), below are the current Corporate Governance procedures programs that are currently in place.

II. Overview of Governance Structure

The Board

The Board of Directors of Jazeera Airways Group is appointed by shareholders through an election held at the Ordinary General Assembly Meeting, and the tenure of each Board member is limited to three years. While forming the Board of Directors, the company assesses the profiles and experience of the individuals to ensure that they are able to perform the roles and responsibilities entrusted to them. Members of the Board of Jazeera Airways Group for the year 2013 are listed in the Board of Directors section.

Board Composition

The Board of Directors consists of five members of whom the majority are non-executive and who can assess objectively the performance of the company independently from the Executive Management and the shareholders. With this composition, the

Board ensures objectivity and accountability in the decision making process, and limits conflict of interest that may arise between the strategic decision making process and the day to day operation of the company.

Terms of Reference of the Chairman

The role and responsibilities of the Chairman of the Board of Directors include but are not limited to the following:

  1. To call for Board of Directors meetings.
  2. To supervise and approve the agenda of the Board of Directors meetings and issues for discussion during the meeting.
  3. To start the discussion in the Board of Directors meetings ensuring that the Board discusses all the major issues in an effective and timely manner.
  4. To ensure that the available information required by Board of Directors members related to the issues under discussion is adequate and correct.
  5. To supervise the flow of discussion in the Board of Directors meetings and ensure that the issues have been discussed effectively and in a suitable time.
  6. To encourage members of the Board of Directors to attend all Board of Directors meetings and the meetings of the committees emerging from the Board, to ensure that the members are sharing their missions and responsibilities in an effective manner, and to promote positive relationships among Board of Directors members.
  7. To sign the Board of Directors resolutions.
  8. To communicate with the shareholders and convey their opinions to the Board of Directors.
  9. To supervise the annual assessment of the performance of the Board of Directors.
  10. To sign the quarterly, semi-annual, and annual financial statements of the company.
  11. To present the report of the Board of Directors to the shareholders in the general assembly meetings.
  12. Encouraging constructive relations and effective communication between the Board and the Executive Management, and among the executive and non-executive members.
  13. Creating a culture that encourages constructive criticism on issues in which there is divergence of opinions among Board members.

Terms of reference of the Board of Directors

  1. Provide business strategies, objectives, policies and direct the development of internal control systems and periodically review the same.
  2. Form the organizational structure of the company and evaluate, develop, and identify the tasks and powers, duties and responsibilities.
  3. Form committees; establish their work programs; determine their powers, duties, and responsibilities and delegate decision- making powers, defining the authority level to sign on behalf of the company.
  4. Evaluate current and future risks that the company might be exposed to and adopt risk treatments plans and risk mitigation policies and procedures.
  5. Supervise the development, implementation, and evaluation of work programs and procedures and verify their adequacy and appropriateness in view of the size and complexity of the operations.
  6. Appoint the internal auditors and supervise and ensure its impartiality and independence.
  7. Nominate the external auditor, who must be specialists and highly qualified, and contract with it and determine its fees.
  8. Review reports of the executive management, internal audit, and external audit and approve the final financial statements of the company.
  9. Adopt annual estimated budgets and interim and annual financial statements.
  10. Oversee major capital expenditures for the company and the ownership and disposal of assets.
  11. Implement a corporate governance system for the company – which does not conflict with these rules – and perform general supervision and monitoring over the degree of its effectiveness and amend it when needed.
  12. Ensure that the organizational structure of the company is transparent and clear, which would allow for a process of decision making and achieving the principles of sound corporate governance and the segregation of powers and authorities between the Board of Directors and the Executive Management.
  13. Adopt regulations and internal control systems relating to the company and develop and define roles, specialties, duties and responsibilities among the different organizational levels.
  14. Adopt a delegation of authority policy for the tasks entrusted to the Executive Management and define the authorities that have been delegated to the Executive Management and the procedures of decision making and the duration of such delegation. The Board also defines the areas that it retains the authority to decide upon. The Executive Management is required to report on the authorities delegated to it on a periodical basis.
  15. Monitor and supervise the performance of Executive Management and ensure that they perform the roles entrusted to them ensuring that the Executive Management is operating according to the policies and regulations approved by the Board of Directors.
  16. Hold periodical meetings with Executive Management to discuss the course of action and any challenges or issues, review and discuss important information related to the company’s activity.
  17. Implement performance standards for the Executive Management which is in-line with the objectives and strategies of the company.
  18. Identify the remunerations that will be provided to the employees, such as fixed remunerations and performance based remunerations.
  19. Appoint or dismiss any member of the Executive Management, including the Chief Executive Officer or anyone under him.
  20. Implement a policy organizing the relationship with stakeholders in order to protect their rights.
  21. Implement a mechanism to organize dealing with related parties, in order to limit and address any conflict of interest.
  22. Ensure, on a periodical basis, the effectiveness and adequacy of internal control systems applicable in the company and the subsidiaries.
  23. Verify the accuracy and credibility of the financial statements of the company and of its business results to safeguard the rights of the shareholders.
  24. Form specialized committees according to the charter and define the duration of the committee, authorities, responsibilities and how the Board monitors it. The decision to form a committee also includes the appointment of members and defining their roles, rights and duties, as well as evaluating the performance and actions of these committees and its primary members.

Terms of reference of the Executive Management

It should be noted that there is a separation of responsibilities between the positions of the Chairman and the CEO of the company, as these positions are handled by two different individuals.

  1. Executing the various policies, regulations and the internal control procedures of the company approved by the Board of Directors.
  2. Executing strategies and annual plans approved by the Board of Directors.
  3. Preparing periodical reports (financial and non-financial) regarding the progress of the company’s activity in light of the strategic plans and goals of the company and presenting these reports to the Board of Directors.
  4. Implementing a complete accounting system that maintains ledgers, registers and accounts that presents accurately and in details the financial data and profit & loss accounts, which allows maintaining the company’s assets and preparing financial statements according to the international accounting standards approved by the Capital Markets Authority.
  5. Managing day to day activities of the business, as well as managing the company’s resources optimally and working on increasing profits and reducing expenditures in accordance to the objectives and strategies of the company.
  6. Effective contribution in the establishment and development of ethical standards in the company.
  7. Implementing internal control and risk management systems and ensuring its effectiveness and adequacy, while taking into account and complying with the company’s risk appetite that is approved by the Board of Directors.

Board Meeting Protocols

The Board of Directors organizes periodic meetings and identifies the items on the Agenda relating to the Company’s activity that will be discussed in such meetings. The other major policies relating to the meetings that are currently prevalent in Jazeera Airways Group are as follows:

  1. The number of Board meetings to be held annually should not be less than six meetings.
  2. The meetings should be attended by at least half of the members of the Board of Directors, and the attendees should not be less than three.
  3. The Board of Directors should hold regular meetings through an invitation from the Chairman or by the company Secretary on behalf of the Chairman.
  4. The Chairman of the Board may convene an emergency meeting on the basis of a written request presented by two Board members.
  5. The company’s policies should include the process of organizing attendance of the Board of Directors meetings, as well as to deal with the non-attendance of members to these meetings.
  6. Provide the members of the Board with the agenda which includes the specified subjects along with the supporting documents and information needed at least two working days prior to the Board meetings to give members sufficient time to study the subjects at hand and take the proper decisions. The Board of Directors will adopt the agenda when the meeting is convened and in the event of any objection from any member on the agenda, the same is documented in details in the minutes of meeting.
  7. The Board of Directors has a register in which the minutes of the Board of Directors meetings are documented sequentially as per the year in which the meeting was held, along with the location of the meeting, the date, the time at which the meeting was convened and ended, and that is in addition to the preparation of minutes of the discussions and deliberations, including the voting process that has been passed and classifying it and safekeeping it for easy reference.
  8. The Board of Director has appointed the Chief Financial Officer (CFO) to be the Secretary to the Board with the following responsibilities:
    1. Recording, coordinating and safe keeping all minutes of meetings of the Board and its registers, agendas and reports that are presented by or to the Board and to get the signatures on the minutes of meetings of the Board from all members present.
    2. Ensuring that the members are abiding by the procedures set out by the Board and reporting the dates of the Board meetings before two working days, taking into account emergency meetings.
    3. Ensuring that members of the Board of Directors have full and timely access to all the minutes of meeting of the Board meeting, information, documentation and registers relating to the company.
    4. It is required by the Secretary of the Board, under the supervision of the Chairman, to ensure proper delivery and distribution of information and coordination between members of the Board and other stakeholders in the company, including shareholders, different departments in the company and the employees.

III. Committees of the Board of Directors

In order to expedite the decision making process and to increase the level of transparency and accountability across the organization, the Board has formed the following Committees in 2013 with other committees to start operation in 2014.

  1.  Executive Committee
  2. Audit and Risk Committee
  3.  Remuneration and Reward Committee
  4.  Human Resource Committee
  5. Corporate Governance Committee **
  6. Nomination Committee **
  7. Safety and Quality Committee**Committees under formation in 2014.

The Board has laid down the detailed terms of reference for these committees in its Corporate Governance Manual laying down the composition, the voting rights, frequency of meetings, the duties, power and authorities and reporting responsibilities among others. We provide relevant extract from the Corporate Governance Manual as follows:

a) Executive Committee

  1. Scope- It is appointed by the Board to expedite the decision making process as per the Delegation of Authority as defined by the Board.
  2. Composition- The Executive Committee of Jazeera Airways Group is formed by the Chairman, the Vice Chairman and two non- executive members of the Board of Directors, with the CEO and CFO as invitee-members.
  3. Responsibilities – Major responsibilities include:
    1. Assist the Board in carrying out their responsibilities, especially for tasks delegated by the Board when timing is critical, except for the matters reserved for the Board, as defined in Board Charters.
    2. Review and provide counsel regarding material issues prior to submission to the Board.
    3. Have the sole authority to retain and terminate consultants to be referred to in matters relating to the development of strategies and policies, as well as to negotiate, and approve consultant fees on such matters.
    4. Ensure that the company’s policies and procedures are updated and implemented properly in alignment with the company’s goals and objectives.
    5. Ensure compliance with corporate governance guidelines, laws, rules, and regulations of various statutory authorities and regulatory bodies.
    6. Review periodic management reports, evaluate performance, and investigate budgetary variances (if any) before forwarding to the Board of Directors for final approval.
    7. Business Planning.
    8. Annual Report coordination and delivery.
    9. Monitor organizational structure and design.
    10. Review the annual report and financial statements for tabling to the Audit Committee.
    11. Develop and approve finance and investment plans or policies in light of dynamic economic and market conditions.
    12. Develop and approve the company’s need for capital and its allocation.

b) Audit and Risk Committee

  1. Scope- It is appointed by the Board with oversight responsibilities of the Internal and External Audit of the company and to ensure that the company works within the risk appetite defined by the Board.
  2. Composition- The Audit and Risk Committee of Jazeera Airways Group consists of three members, the Chairman of the committee is a non-executive member of the Board of Directors and cannot be the Chairman of the Board.
  3. Responsibilities – Major responsibilities include:
    1. Review the financial statements before submitting to the Board of Directors along with its recommendations in this regard to the Board of Directors to ensure transparency and fairness in the financial reports.
    2. Submit recommendations to the Board regarding appointment and reappointment of external auditor, as well as determining their fees.
    3. Monitor the external auditor’s performance, to ensure that they are not providing services to company except for services required by the audit profession.
    4. Study the external auditor’s observations regarding the financial statements and following-up on the status of implementation.
    5. Evaluate the adequacy of the internal control systems in the company and prepare a report including the opinion and recommendation of the committee in this regard.
    6. Evaluate the adequacy of the internal audit in the company, revise and adapt the proposed audit plan, and review results of internal audit reports and ensure that the corrective procedures have been taken regarding the observations in the report.
    7. Review the results of regulatory authorities’ reports to ensure that the necessary follow-up action has been taken in this regard.
    8. Review the proposed deals and transactions the company intends to perform with related parties and provide the proper recommendations to the Board.
    9. Prepare and review the strategies and policies of risk management before it is approved by the Board of Directors, and ensure that the same is consistent with the complexity, nature and size of the company’s activity.
    10. Assist the Board of Directors in identifying and assessing the acceptable level of the risks, to ensure that the company does not breach this level of the risk after approval from the Board of Directors.
    11. Prepare periodic reports on the nature of the risks that the company may be exposed to and submit it to the Board of Directors.

c) Remuneration and Rewards Committee

  1. Scope – It is appointed by the Board to establish a clear policy for the remuneration of Board members and senior executives in Jazeera Airways Group, including, where applicable, fixed remunerations, performance remunerations and end of service remunerations and annual revision of the remunerations policy and evaluation of its efficiency in achieving the objectives such as attracting and retaining highly qualified and technical staff to improve the company’s performance.
  2. Composition – The Committee consists of three members including two non-executive members of the Board of Directors of Jazeera Airways Group.
  3. Responsibilities – Major responsibilities include:
    1. Support and adhere to the Board nomination procedures in line with the requirements of applicable laws and regulations. The Committee seeks new Board nominees in order to add value to the Company and ensure an appropriate composition of the Board.
    2. Prepare a succession plan for the Board and its Committees, the Chief Executive Officer and key members of Management.
    3. Review and approve, in consultation with the Chairman of the Board and/or the Chief Executive Officer, the terms and conditions of the service contracts of senior management of the company (except that any consultation in relation to the Chief Executive Officer of Jazeera Airways Group must be with the Chairman of the Board).
    4. Review at least annually the remuneration and general terms and conditions of employment of senior management team members of the Jazeera Airways Group, and make recommendations to the Board on any adjustments thereto which the Remuneration and Rewards Committee considers necessary or desirable.
    5. Review and approve, in consultation with the Chairman of the Board and/or the Chief Executive Officer, the amount of compensation to be paid to an Executive Director or senior management team member on the termination of his contract of service, within the constraints of applicable law and existing contracts (except that any consultation in relation to the Chief Executive Officer must be with the Chairman of the Board).
    6. Formulate and review annually the policy on granting remuneration, benefits, incentives and salaries to all other employees of the company.
    7. Determine the company’s needs for qualified staff at the level of senior management and the basis for their selection.
    8. Formulate, supervise and review annually the Company’s human resources and training policy.
    9. Attend to and settle grievances and disputes referred to it relating to the terms of service agreements of Executive Directors and senior management employees of the company.
    10. Consider other matters as referred from time to time to the Remuneration and Rewards Committee by the Board.

d) Human Resource Committee

  1. Scope- The Human Resources Committee shall monitor, review, approve and recommend the staff compensation and conduct an annual review and assessment of the performance against these goals and objectives of staff, other than senior management of Jazeera Airways Group.
  2. Composition – The Committee consists of the Chief Executive Officer, the Chief Financial Officer and a non-executive member of the Board who is the Chair of the Committee.
  3. Responsibilities – Major responsibilities include:
    1. Review and approve goals and objectives relevant to the staff compensation and conduct an annual review and assessment of the performance against these goals and objectives of staff below CFO/VP level and review annually their performance.
    2. Review and recommend for consideration and approval, the actual total direct compensation to be awarded to company employees defined in the first point above.
    3. Consider and recommend for approval the overall annual spending for the applicable company base pay and annual cash bonus programs.
    4. Review for approval existing management resources and plans, including recruitment and training programs, for ensuring that qualified personnel will be available for succession to higher level positions.
    5. Consider the proposed changes in the organization or personnel affecting the staff defined above, and recommend approval on any change.
    6. Discharge any other related responsibilities assigned by the Board to the Committee.

e) Safety and Quality Committee

Safety and Quality Committee is responsible for assisting the Board in fulfilling its strategy, policy, monitoring and corporate governance responsibilities in regard to safety, health, environment and security matters including: Compliance with related legal and regulatory obligations, implementing and monitoring enterprise-wide safety and quality checks.