Company’s Organizational Structure

The Board of Directors is in charge of developing and endorsing the organizational structure of the Company. Such structure is reviewed and updated regularly whenever necessary to reflect the recent changes that satisfy the business and activities in accordance with the surrounding developments, thus serve the overall interest of the Company and clients.

Board of Directors

The Board of Directors assumes the duties of setting the Company’s strategic objectives, risk determinants and governance standards, as well as participating actively in organizing Company’s activities, carrying all responsibilities related to financial safety of the Company, and protecting the interests of shareholders and other stakeholders, together with focusing on risk management, governance and enhancing systems of internal control as well as the internal and external audit functions.

The Board of Directors comprises Ten members, of which Nine are non-executive members and one independent member. The members hold academic qualifications as well as professional expertise, specialized skills and full knowledge of the relevant laws and regulations, in addition to complete understanding of the size and nature of Company’s business.

Committees Emanating from the Board of Directors

The Board of Directors carries out its duties with the support of three main committees. The responsibilities, duties and powers of each committee are determined by the Board of Directors. These responsibilities and duties are documented and recorded in a form of regulation for each committee, which includes a list of detailed terms of reference for its function. These committees are as follows:

• Audit Committee
• Risk Management Committee
• Nomination and Remuneration Committee

 Audit Committee and Its Role:

The Audit Committee emanating from the Board of Directors assumes the responsibility of supervising the Company’s internal control systems. As such, it handles assessing the effectiveness and efficiency of internal control systems on periodic basis through audit works carried out by the Company’s Internal Audit Unit. In addition, the Committee presents reports to the Board of Directors on the results of assessing the efficiency of the existing regulatory controls and processes. Moreover, the Committee is responsible for the appointment, dismissal and performance evaluation of the director of Internal Audit Unit as well as members of the audit team. Furthermore, it is responsible for monitoring the performance of external auditors and coordinating with them regarding auditing the financial statements and reviewing them periodically, in addition to expressing opinions and recommendations to the Board of Directors. Furthermore, the Committee monitors the extent the Company is adhering to the relevant laws, policies, systems and directives.

Risk Management Committee and Its Role:

 Risk Management Committee emanating from the Board of Directors assumes preparing and reviewing the risk management strategies and policies prior to being endorsed by the Board of Directors, and ensuring implementation of such strategies and policies and that they are consistent with the nature and size of the Company’s activities. Moreover, the committee assumes assessing the systems and mechanisms for identifying, measuring and monitoring the various types of risks the Company may encounter, so as to define the deficiencies in such systems and mechanisms.

Nomination and Remuneration Committee and Its Role:

 The Nomination and Remuneration Committee emanating from the Board of Directors assumes the responsibility of reviewing the remuneration framework and plan applicable at the Company as well as supervising the development of the job succession plan together with expressing recommendations on the remuneration of the executive management personnel. Moreover, the committee assumes reviewing the annual remunerations for the executive managers and presenting the same to the Board of Directors, preparing a separate annual report on all remunerations granted to members of the Board of Directors and the executive management. Furthermore, the committee assumes the responsibility of ensuring that the status of independence is preserved for the independent board member. In addition, the committee supervises the process of performance evaluation for the Board of Directors as well the committees emanating from it.

Risk Management

Risk Management represents one of the Company’s central independent functions. The manager of Risk Management Unit reports to the Risk Management Committee emanating from the Board of Directors, which assumes appointing and dismissing him as well as evaluating his performance. The Unit also assumes primarily the responsibility of determining, measuring, monitoring and supervising the Company’s system of risks it encounters, and prepares reports on the same. It also acts as the independent internal consultant to the executive management with respect to assessing and monitoring the risks the Company is encountering.

Internal Audit

The Internal Audit Unit of the Company is an independent function. It is primarily responsible for evaluating the effectiveness and adequacy of the internal controls of the Company, together with ensuring compliance to the regulatory policies, procedures and requirements. The internal auditors of the Company are not assigned any executive duties so as to maintain their integrity and independence in performing their duties and responsibilities. The Internal Audit Unit also assumes the duty of reporting directly to the Audit Committee of the Board of Directors which is responsible for monitoring the overall performance of the audit works.

Behavioral Values

The Board of Directors seeks to implement the highest standards of professional conduct, which are based on a number of principles. These principles were developed through a system of policies and procedures that include but are not limited to the following:

• Code of Professional Conduct and Ethics
• Dealings with Related Parties
• Conflict of Interest
• Code of Professional Conduct and Ethics

The Board of Directors is at the forefront of establishing the professional standards and values that would encourage the Company as a whole, the executive management and the other employees to be of integrity. The Company’s code of conduct sets the ethical standards to be adopted by the other stakeholders while executing the Company’s business.

Dealings with Related Parties

 The policy of dealings with related party provides guidelines on how to perform and manage the dealings with related parties, whether such dealings are between the Company and the Board of Directors or its subsidiary companies or other related parties, or between the executive management and the employees. This policy adheres to regulatory standards as well as the international accounting standards for financial reporting.

Conflict of Interest

The Board of Directors assumes the duty monitoring and managing any possible conflicts of interest the Company would encounter, including taking advantage of the Company’s resources and misuse of powers and authorities. The policy of conflict of interest incorporates the guidelines on how to identify the possible forms of conflict of interest, the means of disclosing and reporting the same, as well as limiting or preventing possible conflicts of interest, including the rules related to dealings with related parties and possible forms of conflicts of interest.

Transparency and Disclosure of Information

The Company commits to providing accurate, integrated and up-to-date information to shareholders, in line with the legislative and regulatory requirements within the framework of transparency. The Company ensures implementing the integrated practices and procedures of disclosing information, and the public access, including individual investors, to the information announced spontaneously. For that purpose, the Company has adopted a policy of transparency and disclosure of information that reflects all disclosure requirements (financial, non-financial and regulatory disclosures). The disclosure framework covers all key qualitative and quantitative information related to financial performance, financial stability, risk management factors, remunerations, governance, dealings with related parties, conflicts of interest, substantial changes and others.

Shareholders and Stakeholders

The shareholders have delegated the authorities and responsibilities of supervising and managing the Company to the Board of Directors, which in turn delegated the authorities and responsibilities of the day-to-day dealings of the Company to the Executive Management. The Companies Law determines the shareholders’ rights, which include, but not limited to:

• Receiving the shares dividends that are allotted and announced.
• Attending the annual meetings of the General Assemblies.
• Participating in discussions and voting on the resolutions of the General   Assemblies.
• Exercising the rights as per the prevailing principles and without discrimination.
• Identifying the rules governing the voting procedures and attending the annual general assemblies.

Clients

The Company is responsible for protecting the rights of its clients and adhering to such responsibility, through the following principles, which includes but without limitation:

• Fair and equality in its dealings.
• Display the available and launched products accurately and transparently.
• Participate in the assessment of clients’ satisfaction, and deal with their   individual complaints.

Employees

The Company seeks to protect the employees’ rights, and encourages the following doctrines:

• Working in an atmosphere of transparency.
• Community (Company’s Social Responsibility)
• Contributing to the plans of managing and developing the outstanding   employees

Kuwait Cement Company has been a pioneer amongst the companies similar to it with respect to caring for social responsibility, hence it works diligently on adhering to this principle by means of developing and deepening its role in the community, and achieving social development as one the primary intent in its mission and objectives.