Chapter II: Duties and Responsibilities of the Board, Audit Committee and Executive Management Towards Compliance
Principle 1: Duties and Responsibilities of the Board Towards Compliance
1. Subject to its duties and responsibilities contained in relevant laws and regulations and SAMA-issued instructions, the Board shall:
a. Buttress and promote the values of honesty and integrity throughout the Company.
b. Ensure the existence of a compliance unit that is effective, well-developed and independent. It shall be granted appropriate powers and resources, and its employees provided with specialized training while developing their abilities and skillsets in the field of compliance.
c. Approve a written policy for compliance that sets out the powers,tasks and responsibilities of the Compliance Unit , as well as compliance programs and relevant processes.
d. Appoint the Compliance Officer based on the Audit Committee’s recommendation after obtaining a no-objection letter from SAMA.
e. Accept the Compliance Officer’s resignation based on the Audit Committee’s approval, and notify SAMA thereof.
f. Set a clear outline of the responsibility and accountability of the Company; enforce compliance thereof by its employees; and establish complete separation of responsibilities at the level of Executive Management.
g. Review the periodic compliance report submitted by the Compliance Officer.
Principle 2: Duties and Responsibilities of the Audit Committee Towards Compliance
1. Subject to its duties and responsibilities contained in relevant laws and regulations and SAMA-issued instructions, the Audit Committee shall:
a. Review the periodic compliance report submitted by the Compliance Officer; document the actions taken regarding to, and decisions resulting from, the report; and submit it to the Board.
b. Verify the implementation and evaluate the effectiveness of, update, and propose the necessary amendments to the compliance policy approved by the Board on an annual basis.
c. Approve the plan that encompasses the main activities and operations of the Unit, subject to annual update by the Compliance Officer.
d. Submit recommendations to the Board for the appointment of the Compliance Officer along with the reasons and justifications.
e. Approve the resignation request of the Compliance Officer.
f. Assess the Compliance Officer’s performance according to the Company’s approved plan.
g. Evaluate the effectiveness and efficiency of compliance policies, procedures, reporting mechanism and the extent of compliance with such policies on an annual basis; and submit recommendations to the Unit for improvement to the policies before their approval by the Board.
h. Review and approve the risk-based compliance program implemented by the Unit in their work.
i. Review the outcomes of SAMA’s reports, and ensure that the Company has taken the necessary actions in this regard.
j. Escalate issues to the Board as needed, and give recommendations on the actions that must be taken.
k. Verify the Company’s compliance with relevant laws, regulations, policies and instructions, and take the necessary measures to improve the level of regulatory compliance in the Company.
l. Verify that the number of employees in the Unit is sufficient to match the size of the Company’s business and business model.
Principle 3: Duties and Responsibilities of the Executive Management Towards Compliance
1. Subject to its duties and responsibilities contained in relevant laws and regulations and SAMA-issued instructions, the Executive Management shall:
a. Comply with applicable laws and instructions, and take the necessary measures and controls to prevent violations thereof.
b. Establish an independent unit for compliance and describe its role to all Company employees.
c. Create a work atmosphere built on trust and harmony between the Unit and other departments, and take the necessary measures to achieve that.
d. Develop a written policy for compliance approved by the Board that sets out the powers, tasks and responsibilities of the Unit, as well as relevant compliance programs.
e. Incorporate into the Company’s internal regulations guarantees of compliance with relevant laws and instructions.
f. Develop a written organizational policy that includes work guidelines and procedures, and update it continuously in line with changes. The policy shall be communicated to the concerned employees in the appropriate manner and within a timeframe that allows for compliance. Such policy shall include the rules regulating compliance to the relevant laws and instructions.
g. Provide appropriate training to the Company’s employees on an annual basis with periodic follow-ups, with the aim of keeping pace with developments in their respective fields of work and ensuring that they perform their duties and responsibilities effectively to help achieve compliance.
h. Support the Unit to undertake its duties, including AML/CTF, by qualifying staff and upgrading technical and information systems, and budget setting in order to effectively implement, manage and monitor the AML/CTF program requirements, in the event that the AML/CTF unit is reporting to the Compliance Unit.