Corporate Governance

Corporate Governance Summary

Overview

The Bahrain Institute for Pearls and Gemstones (DANAT) B.S.C. Closed (“DANAT”) is a wholly owned subsidiary of the Bahrain Investment Holding Company – Istithmar B.S.C. Closed (“Istithmar”) and incorporated as a Closed Shareholding Company in accordance with Article 76 of the Commercial Companies Law promulgated by Decree No. 21 of 2001, as amended. As a Closed Shareholding Company, DANAT is governed by the Bahrain Commercial Companies Law and operates in compliance with the Bahrain Corporate Governance Code issued by the Ministry of Industry, Commerce & Tourism (“MOICT”).

Governance Overview

DANAT is committed to principle-based, value-driven corporate governance, which is reflected in its goals of sound governance, transparency, integrity, performance and conformance.

DANAT’s Corporate Governance Guidelines document the framework, policies and practices for the effective corporate governance of the company, outlining the rights and obligations of shareholders, stakeholders, executive management and the Board of Directors. The guidelines have been developed in accordance with key corporate governance principles set out in the Bahrain Corporate Governance Code.

Board of Directors

DANAT is managed by a Board comprised of nine (9) independent non-executive directors, appointed by resolution by Istithmar, as shareholder. Board members are selected based on their competence and independence to be able to demonstrate judiciousness, experience and objectivity. Board members are appointed for a term of three (3) years, which may be renewed. The Board is required to meet on a periodic and regular basis, convening at least four (4) times in the financial year.

The oversight responsibilities of DANAT’s Board of Directors are codified in the Board Charter. The Board is expected to maintain effective oversight of organisational performance and conformance by regularly monitoring key business activities and providing directives to DANAT’s Board Committees as part of its fiduciary duties of care and loyalty to DANAT and its stakeholders. The Board of Directors has established three (3) committees; the Audit & Risk Committee, Executive Committee and Nomination, Remuneration and Governance Committee. Each committee has a committee charter that confirms the roles, responsibilities, scope and authority of the relevant committee. In addition, the Board seeks input from external experts when necessary, to ensure sound business practice and governance.

Board Committees

Audit & Risk Committee

This Committee assists the Board of Directors in fulfilling its oversight responsibilities regarding the quality and integrity of DANAT’s accounting, internal and external auditing, and reporting practices. This includes ensuring compliance with legal and regulatory requirements as well as internal policies and procedures.

Appointed by the Board, the Audit & Risk Committee comprises four (4) independent non-executive directors.

Executive Committee

This Committee addresses specific matters delegated to it by the Board of Directors, making recommendations and decisions thereof. The Executive Committee also reviews and approves business proposals, budgets and major initiatives for subsequent submission to the Board as well as investment opportunities, major procurement and outsourcing matters, as may be delegated by the Board.

Appointed by the Board, the Executive Committee comprises four (4) independent non-executive directors.

Nomination, Remuneration & Governance Committee

This Committee assists the Board of Directors in formulating a framework for nominating and appointing the directors and senior management of DANAT and its remuneration policies. Furthermore, the Committee supports the Board in establishing DANAT’s Corporate Governance framework and monitoring compliance in this regard.

Appointed by the Board, the Nomination, Remuneration & Governance Committee comprises four (4) independent non-executive directors.