Corporate Governance

The Board consists of ten members, nine of whom are non-executive, including the Chairman. Two members are independent.

Board members serve a three-year term, with the possibility of extension in line with legal requirements.

Each member holds various commitments and positions of importance in line with their expertise. Details on individual members’ other commitments are outlined in the company’s annual report.

Though Zain is committed to diversity and inclusion, at present, the Board is comprised only of male members. The company’s Board diversity policy aims to foster a culture of inclusivity, actively encouraging representation from various backgrounds.

The Board members bring a wide range of competencies related to the company’s impacts. They showcase a rich diversity of skills and competencies that align with contemporary principles of Environmental, Social, and Governance (ESG) practices, driving sustainable value creation. With extensive backgrounds in investment and financial management, Board members are adept at portfolio allocation and financial strategy, particularly within sovereign wealth funds and private equity. Their telecommunications expertise, drawn from significant roles in major companies, enhances their understanding of network operations and business transformation, allowing them to align strategic initiatives with ESG goals. Additionally, strong representation in corporate governance and compliance equips the Board to navigate complex regulatory landscapes while fostering transparency and accountability, key aspects of value creation in today’s market.

Members also possess substantial project management experience, ensuring that sustainability impacts are integral to project execution. Their deep knowledge of local and international markets, especially in the MENA region, provides insights into economic diversification and investment opportunities that adhere to ESG principles. The Board’s strong academic credentials, including advanced degrees in business administration and finance, further support informed decision-making that prioritizes responsible growth. Finally, with experience across diverse industries such as banking, tourism, and technology, Board members bring a multifaceted perspective to discussions on how to balance profitability with social responsibility, ensuring that the company’s strategic direction not only meets financial objectives but also contributes positively to society and the environment.

This combination of expertise positions the Board to effectively govern and guide the company toward sustainable growth and responsible business practices, reflecting a commitment to creating long-term value for all stakeholders.

Zain emphasizes transparency and encourages shareholder participation in its Annual General Meetings (AGM), where significant decisions, including the appointment of Board members, are made. All shareholders are invited to participate without fees, ensuring comprehensive representation of stakeholder interests.

Zain Group’s governance structure is designed to ensure effective decision-making and oversight of the company’s impacts on the economy, environment, and people. Below is a description of its key committees:

The Audit Committee consists of five members, with at least one being independent. The Chairman of the Board or any executive members are not permitted to sit on this committee, following Kuwait’s laws and regulations.

This Committee has five members, and as per local laws, the Board Chairman does not sit on this Committee.

This Committee has five members, and as per local laws, the Board Chairman does not sit on this Committee.

Zain’s Board appoints specific executives to manage the company’s impacts. These roles include:

• Chief Sustainability Officer (CSO): Responsible for the development of the company’s sustainability strategy, oversees strategies for reducing environmental impacts, achieving net-zero emissions, and ensuring the company’s alignment with global sustainability standards. The CSO collaborates with the Board, stakeholders, and other executives to shape and implement Zain’s sustainability agenda.
• Chief Inclusion, Diversity and Equity Officer: Focuses on promoting diversity, equity, and inclusion in the workforce.
  Chief Purpose and HR Officer: Manages the company’s human capital focusing on topics such as well-being and organizational culture, aligning with the company’s overall mission and values.
• Chief Corporate Affairs & Communications Officer: Ensures compliance with corporate governance and transparency regulations, including communication on the company’s social, economic, and environmental performance.

Executives further delegate responsibilities to various employees across operational levels. Specific employees within the departments of sustainability, corporate governance, and operations are given the responsibility to ensure the execution of initiatives and compliance with the company’s policies regarding its economic, environmental, and social impacts. These employees work closely with executive management to implement sustainability initiatives and monitor progress.

Executive management report back to the Board on the progress toward its strategic objectives and how the company manages its impacts. This process includes preparing quarterly performance reviews and publishing the consolidated annual Sustainability Report, Annual Governance Report, and the comprehensive Company Annual Report. These annual reports encompass all social, economic, environmental, and human rights-related impacts and are provided by the management to the Board for review and final approval.

These reporting efforts reflect the Board’s commitment and oversight on Zain’s sustainability strategies and outcomes. It also empowers executives and employees to manage and address sustainability challenges efficiently.

The Board of Directors, is responsible for reviewing and approving the reported information, including the company’s material topics. The process for reviewing and approving the information generally includes the following steps:

1. Reporting Intervals: Executive management provides comprehensive reports to the Board at regular intervals, such as quarterly, semi-annually, or annually. This ensures that the Board receives timely updates and can effectively monitor the company’s performance.
2. Detailed Reporting: The reports submitted to the Board cover key performance indicators, progress updates on sustainability KPIs , initiatives undertaken, challenges faced, and future action plans. These reports are detailed and include both qualitative and quantitative data, relevant metrics, and benchmarks as needed.
3. Holistic Understanding: The reports provide a comprehensive view of the company’s sustainability performance and its impacts on the economy, environment, and people. This includes insights into regulatory environment, emerging trends, risks, and opportunities.
4. Review Process: The Board conducts assessments of the reported data. This involves evaluating the alignment of the information with the company’s strategic objectives, stakeholder commitments, and industry standards.
5. Specialized Committees and Auditors: The review process often involves specialized committees, independent auditors, and internal stakeholders to ensure a robust governance framework. These entities facilitate detailed discussions, analyses, and recommendations.
6. Final Approval: The Board’s final approval of the reported information signifies the company’s commitment to transparency and accountability. It reinforces trust and confidence among shareholders, stakeholders, and the broader business community.

Zain implemented a robust governance framework designed to uphold transparency and accountability. Central to this framework is a conflict-of-interest policy that ensures potential conflicts between personal and company interests are managed effectively. The Board of Directors and executive management are required to disclose any actual or potential conflicts of interest in line with this policy, which aligns with local legal requirements and global best practices.

Key processes for preventing and mitigating conflicts include:

• Disclosure Requirements: Board members must declare any personal interests related to company business or contracts to ensure transparency.
• Voting Restrictions: If a Board member has a personal interest in a decision, they are prohibited from participating in the relevant vote. This practice mitigates the risk of biased decision-making.
• Independent Expert Review: For transactions valued at 10% or more of the company’s total assets, an independent expert is appointed to submit a report to the General Assembly. This measure ensures objective evaluation before approving such transactions.
• Comprehensive Investigations: The Board investigates all reported conflicts of interest, assessing the extent and intentions behind the conflict. Where a Board member is involved, they are excused from the discussions to prevent undue influence.
• Disciplinary Measures: In cases where conflicts are confirmed, the Board retains the authority to impose disciplinary actions, including potential suspension or termination of employment.

The conflict-of-interest policy is a vital component in Zain’s value creation strategy, ensuring that the governance structure promotes long-term sustainability by aligning business practices with stakeholder interests. Transparency, accountability, and stakeholder engagement are key ESG tenets that Zain upholds through its Governance Framework. To ensure alignment with these standards, awareness training material on conflict of interest was distributed to all employees across our operations. This training serves to reinforce the importance of upholding these ethical guidelines and ensures all employees are equipped to recognize and address potential conflicts of interest. This proactive stance not only mitigates risk but also fosters trust with shareholders, employees, and the broader community, supporting the company’s value creation efforts in a competitive and responsible manner.

Zain is committed to full transparency regarding conflicts of interest, disclosing such matters to all relevant stakeholders, including shareholders, directors, employees, and regulatory bodies. The company’s governance framework outlines the following key areas for disclosure:

• Cross-Board Membership: Zain requires Board members to disclose any memberships on boards of other organizations, particularly where such memberships might present a conflict of interest. These disclosures are recorded and discussed at Board meetings to prevent any influence.
• Cross-Shareholding with Suppliers and Stakeholders: If a Board member or executive management holds shares in a supplier or other stakeholders, these interests must be disclosed in line with the conflict-of-interest policy. The Board evaluates such disclosures to ensure impartiality in business decisions.
• Existence of Controlling Shareholders: Any transactions or arrangements involving controlling shareholders are carefully monitored. Independent reports are generated for transactions exceeding 10% of the company’s total assets, with the findings presented to the Board and eventually to the AGM. This ensures that controlling shareholders do not exercise influence over company operations.

Related Parties Transactions Policy: The policy ensures that all related-party transactions, including relationships, transactions, and outstanding balances, are disclosed to the Board and stakeholders. These disclosures are also subject to auditor review, adding another layer of scrutiny to safeguard stakeholder interests.

Zain developed a comprehensive Whistleblowing policy that serves as a key mechanism for communicating critical concerns to the Board. This policy empowers employees and stakeholders to report any instances of misconduct, unethical behavior, or violations of environmental or social responsibilities. Reports submitted through this confidential and secure platform are treated with utmost seriousness and are swiftly escalated to the Board of Directors or executive management when deemed critical.

Critical concerns are communicated through a structured process that involves:

• Confidential Reporting Channels: Zain provides secure, anonymous channels for employees and stakeholders to report concerns, which include issues relating to governance, ethics, and violations of ESG principles.
• Direct Escalation: Once a report is received, internal mechanisms ensure that serious matters are escalated promptly to the Board for immediate review and action.
• Regular Updates: The executive management also provides the Board with periodic updates on the status of reported concerns, ensuring that the Board is informed of the nature, extent, and corrective actions related to these issues.

This process strengthens Zain’s governance structure by embedding transparency and accountability into decision-making processes. By addressing critical concerns efficiently, Zain not only mitigates potential risks but also enhances its value creation, as a company committed to ethical practices, long-term sustainability, and stakeholder trust.

During the reporting period, no critical concerns were communicated to the Board.

Zain’s remuneration policy ensures a balance between fixed, and variable pay for members of the Board and executive management. Fixed remuneration is based on the responsibilities and the specific career paths of individuals, reflecting their value to the company. Variable remuneration, on the other hand, is tied to the achievement of predefined goals, both financial and non-financial, to motivate and reward executive management based on individual and company performance.

Sign-on bonuses or recruitment incentives are provided as needed, particularly when attracting top-tier talent. These incentives are aligned with the company’s strategic objectives and competitive market conditions.

Termination payments are included as part of the approved contractual agreements, compliant with applicable laws. These may consist of end-of-service indemnity as stipulated by Zain’s human resources policies and contractual agreements.

Retirement benefits include end-of-service indemnities and other benefits as per the applicable laws and regulations, ensuring that these packages remain competitive and aligned with Zain’s human resources policies.