Al Abri: Evaluation of performance enhances efficiency
MSM listed companies are recently holding their annual general meeting after being approved by the regulator CMA.
The businesses of the meeting include new item this year which is measuring the performance of the members of the boards of directors as a requirement of the Code of Corporate Governance which became effective in July 2016.
Mohammed Said Al Abri, Vice President, Capital Market Sector said the general meetings of the MSM listed companies started implementing one of the key amendments of the Code of Corporate Governance which is measuring the performance of the members of the boards of directors of the MSM listed companies. The previous meetings set out the evaluation standards and specifying the independent entity which would carry of the evaluation.
He added CMA has obligated the companies to set out specific criteria for evaluation of the performance of the members of boards of directors in the general meeting with the aim of creating a mechanism to follow up the efficiency of the directors and their capabilities and contribution in directing the company to best standards of performance.
On who sets the evaluation criteria Al Abri said the code authorized the general meeting to set out the criteria as internal affair of the company and allowed the general meeting to agree and adopt such criteria by appointing an independent third party to measure the performance of the directors according to the agreed criteria. The criteria differ from a company to another according to the business, objects and size of each company.
The Vice President for Capital Market Sector said the evaluation of the members of the boards of directors is a flexible process and takes places once during the term of the board which is three years
The general meeting is the supreme authority of the company and comprises all the shareholders who can participate personally or by proxy.
Experts and analysists expect the process of evaluating the performance of the members of the boards of directors would enhance the role of the general meeting in holding the directors accountable and in directing the company toward better performance by focusing on skills and expertise required for decision making in the company.
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