09 Corporate Governance

Zain’s Board of Directors is responsible for reviewing and approving all reported information, including the company’s material topics. The process ensures accuracy, transparency, and alignment with the company’s strategic direction and long-term value creation objectives.

Executive management provides the Board with regular briefings throughout the year, including quarterly, semi-annual, and annual updates. These briefings present a full picture of the company’s performance, risks, sustainability initiatives, and progress on
strategic priorities.

The information submitted to the Board combines both qualitative insights and quantitative metrics, covering key performance indicators, progress toward sustainability commitments, and any emerging issues that could affect the company’s operations, people, or broader stakeholder landscape. This enables the Board to gain a comprehensive understanding of Zain’s economic, environmental, and social impacts, as well as evolving regulatory developments and future opportunities.

As part of its oversight, the Board reviews and assesses the information to confirm alignment with the company’s strategy, governance requirements, and stakeholder expectations. The process is supported by specialized Board committees, internal functions, and independent auditors, ensuring that the information is accurate, reliable, and thoroughly examined.

Once this review is complete, the Board grants final approval, reaffirming Zain’s commitment to transparency, strong governance, and long-term value creation across its operations.

Zain maintains a governance system built on integrity, transparency, and the protection of stakeholder interests. A core pillar of this system is the company’s Conflict of Interest Policy, which ensures that personal interests never compromise corporate decision-making. The Board of Directors, executive management, and all key personnel operate under clear obligations to identify, disclose, and address any actual or potential conflicts in accordance with local regulatory requirements and international best practices.

Zain applies several structured processes to prevent conflicts before they arise and to mitigate them effectively when they do:

• Mandatory Disclosure: Board members and executives must proactively declare any personal or professional interests that may interfere with company activities. These declarations are documented and reviewed to ensure full transparency.
• Decision-Making Safeguards: Individuals with a declared interest are excluded from discussions and voting on related matters. This preserves objectivity and protects the integrity of Board and management decisions
• Independent Assurance: Transactions representing 10% or more of total assets trigger the appointment of an independent expert, who provides an impartial assessment to the General Assembly. This external review strengthens trust in major decisions, particularly those involving related parties or controlling shareholders.
• Formal Review and Investigation: All reported conflicts are subject to structured examination by the Board. Where a member is involved, they are removed from the process to avoid influencing the outcome.
• Corrective and Disciplinary Actions: Confirmed breaches may lead to disciplinary measures, including suspension or termination, underscoring the company’s zero-tolerance stance.

Collectively, these measures reinforce Zain’s ability to make balanced, risk-aware decisions that support long-term value creation and operational resilience. By safeguarding shareholder value, Zain ensures that financial resources are allocated carefully and protected from bias. Strong governance over major investments enhances infrastructure, ensuring that network and operational advancements are based solely on merit and strategic need. Transparent oversight also supports environmental integrity by preventing decisions that could compromise natural resources or sustainability goals. A culture of accountability enriches corporate culture, reinforcing employee trust, ethical conduct, and leadership credibility. Clear governance processes strengthen process knowledge, and enhance internal systems, decision-making structures, and cumulative organizational experience. Finally, transparent disclosures and ethical conduct elevate trust, deepening confidence among regulators, customers, partners, and society at large.

Zain is committed to openly communicating relevant conflicts of interest to stakeholders in a clear and structured manner. The governance framework requires disclosure in the following areas:

Board members must disclose positions they hold in other entities. These disclosures are assessed to ensure such roles do not compromise objectivity or influence Zain’s strategic decisions.

Any shareholdings or financial interests in suppliers, partners, or other stakeholders must be declared. The Board evaluates these cases to ensure decisions remain impartial and competitively driven.

Transactions involving controlling shareholders receive heightened scrutiny‭. ‬Significant transactions‭ (‬10%‭+ ‬of assets‭) ‬require an independent expert report shared with the Board and the General Assembly‭, ‬supporting transparency and fairness‭.‬

Zain’s Related Party Transactions Policy mandates the disclosure of all related-party relationships, transactions, and outstanding balances. These disclosures are reviewed by management, the Board, and external auditors, ensuring accuracy and alignment with shareholder and stakeholder interests.

Both the Conflict of Interest and Related-Party Transactions Policies were reviewed and approved by the Board and subsequently revamped to introduce an additional layer of assurance and control through the Compliance Department, which operates independently and reports directly to the Board Risk Committee (BRC).

Zain’s Whistleblowing Policy forms a core element of its governance system, ensuring that serious concerns (ethical, operational, environmental, or social) are safely reported and escalated to the Board. The policy is fully aligned with Kuwaiti legal requirements, which mandate the protection of whistleblowers and ensure confidentiality and non-retaliation. The process not only safeguards integrity but also directly supports the organization’s financial strength, operational resilience, environmental responsibility, people development, governance maturity, and stakeholder trust.

Employees and external stakeholders can anonymously report issues related to misconduct, governance breaches, or ESG violations. Protecting whistleblowers and encouraging transparency reinforces trust, strengthens the company’s ethical culture, and promotes a safe and supportive workplace. This contributes to stronger people practices and helps build credibility with the broader community and regulators.

Once a serious concern is received, defined escalation pathways ensure that it reaches executive management or the Board without delay. This timely response protects the company from potential financial losses, compliance failures, and reputational damage. It also safeguards the continuity and reliability of operations, ensuring that critical services and infrastructure remain stable and well-managed.

Executive management provides the Board with periodic briefings on all reported matters, giving Board members visibility over trends, root causes, and corrective actions. This strengthens the organization’s ability to learn, adapt, and improve its internal systems and decision-making processes. It also helps identify environmental or social risks early, ensuring responsible management of resources and reinforcing Zain’s commitment to sustainable and responsible operations.

Through this integrated reporting and escalation approach, Zain ensures that critical concerns are addressed transparently and transformed into opportunities to strengthen ethics, mitigate risks, and maintain trust with employees, regulators, partners, and society at large.

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

Each year, the Board undertakes a structured self-assessment to evaluate how effectively it oversees Zain’s economic, environmental, and social impacts. However, in line with best practice, this year the Board is conducting an independent third-party assessment as part of its approach to alternating between the two evaluation methods over successive years. The assessment covers several core areas:

• Governance & Compliance: The Board’s adherence to corporate governance principles, regulatory expectations, and ethical conduct.
• Strategic Leadership: The degree to which sustainability considerations are embedded into strategic planning and long-term decision-making.
• Risk Oversight: The effectiveness of identifying, assessing, and mitigating ESG-related risks that could impact business continuity, financial stability, or stakeholder trust.
• Stakeholder Engagement: The Board’s effectiveness in overseeing the company’s engagement with regulators, shareholders, employees, partners, and communities.
• Financial and Operational Oversight: Ensuring sustainable financial performance and resilience through sound oversight of the company’s resource allocation, investments, and operations.

Through this evaluation process, the Board reflects on its alignment with Zain’s mission and assesses whether it is sufficiently supporting sustainable value creation across all parts of the business—from strengthening workforce capabilities to protecting natural resources, enhancing operational systems, and maintaining strong relationships with stakeholders.

This performance assessment is conducted annually, ensuring consistent and timely reflection on the Board’s effectiveness. In line with recognized governance standards, Zain alternates between internal self-assessments and independent third-party evaluations. This year, the Board is undergoing an external review, incorporating updated regulatory expectations and emerging sustainability requirements. This alternating approach ensures the evaluation process remains thorough, objective, and fully aligned with global best practice.

The insights gathered from these evaluations are used to drive meaningful improvements in governance practices, Board effectiveness, and organizational performance:

Identified gaps are addressed through refined training programs that deepen Board members’ understanding of ESG developments, sector-specific sustainability risks, and regulatory changes. This strengthens the Board’s ability to govern responsibly, support long-term performance.

The Board reviews its composition periodically to ensure it retains the expertise necessary to oversee the company’s strategic and sustainability priorities. During the reporting period, no changes to membership were required; instead, the Board focused on further strengthening the competencies of its current directors through targeted development and enhanced training, ensuring continued alignment with evolving regulatory expectations and emerging governance challenges.

The Board’s evaluations drive improvements across governance, risk management, and stakeholder engagement, strengthening operational efficiency, supporting responsible practices, and reinforcing the systems that sustain Zain’s long-term performance.

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.

The total remuneration for the Board shall not exceed 10% of the company’s net profits, calculated after accounting for depreciation, reserves, and the distribution of dividends to shareholders, which will not be less than 5% of the company’s capital, or a higher percentage as outlined in the Articles of Association.

Board remuneration is subject to approval during the AGM of shareholders, based on recommendations from the Board Nomination and Remuneration Committee (BNRC) and the Board itself.

considers the operational environment, performance results, and the company’s risk tolerance. The key components of this system include:

Fixed remuneration is determined by the level of responsibilities assigned and the specific career path of each executive member. A remuneration index is established for each position, reflecting its value to the company. This index is reviewed annually by the BNRC, in collaboration with relevant departments such as Human Resources, to reassess the total remuneration package, market conditions, and the performance of various divisions. Fixed remuneration encompasses salaries, allowances, benefits, and end-of-service indemnities, all awarded in accordance with the approved salary and grading structure, applicable laws and regulations, and the manual of contractual agreements issued by Human Resources.

Variable remuneration is contingent upon the achievement of predefined goals and is designed to motivate and reward members of executive management. Variable bonuses are allocated based on both individual performance and the overall performance of the company. At Zain, variable remuneration consists of two elements: annual variable remuneration, granted to employees on a yearly basis, and multi-annual variable remuneration, awarded over multiple years to emphasize the Board’s focus on short-, medium-, and long-term objectives. The annual objectives include both financial indicators, representing financial targets for the company and its departments, and non-financial indicators, reflecting operational objectives achieved through specific activities and initiatives, such as product launches or strategic investments.

The BNRC oversees the design and implementation of Zain’s remuneration policies. It operates independently, ensuring that remuneration aligns with best practices in good governance, shareholder interests, and regulatory requirements. Annually, the BNRC reviews and updates the remuneration policy to reflect changes in the market and internal performance.

Votes on remuneration policies and proposals are conducted during the AGM, where shareholders are invited to vote on the recommendations made by the BNRC. Results of these votes are disclosed transparently as part of Zain’s commitment to good governance and accountability.

The Board plays a pivotal role in establishing a robust control framework that integrates a comprehensive set of standards, processes, and structures to ensure effective internal controls across the organization. In fulfilling its oversight responsibilities, the Board ensures the implementation of a functional anti-corruption system and continually monitors executive management’s performance in executing the associated policies. A key priority is embedding a culture of integrity and ethical conduct throughout the organization, reinforcing the importance of anti-corruption principles as a foundation for responsible business practices.

Aligned with international governance standards, the Board’s actions contribute directly to value creation across multiple areas, by safeguarding the company’s assets, preserving stakeholder trust, strengthening human capabilities through training, and supporting sustainable long-term performance. Notably, in 2025, Zain incurred zero costs related to corruption fines or penalties, emphasizing the strength of its governance systems and the effectiveness of its internal controls.

The Board maintains open and transparent communication with shareholders and stakeholders, ensuring timely, accurate, and coherent disclosure of essential information. This commitment supports enhanced social and intellectual resources, enabling informed decision-making and reinforcing credibility. Both the Board and executive management remain committed to addressing the company’s broader economic, environmental, and social impacts, promoting inclusive growth and long-term sustainable value.

Zain’s anti-corruption policies and procedures were communicated to all relevant stakeholders—including Board members, employees, business partners, and suppliers—across all operational markets. The policy is also available publicly on the company’s website, ensuring broad accessibility and strengthening social and intellectual aspects through transparency and awareness. Communication was delivered through email notifications and video materials, supported by tracking mechanisms that verify receipt and review. These systems will continue to evolve throughout 2026 to enhance accountability and further develop the organization’s human capital.

In 2025, the Board held a total of six meetings. Engagements between the Board and the executive management team occur periodically or when required, ensuring continuous oversight across economic, social, environmental, and human rights matters. Delegated authorities reflect the specific responsibilities of senior executives and support effective strategic alignment. This approach reinforces Zain’s Corporate Sustainability strategy, which focuses on delivering “Meaningful Connectivity,” and driving systemic change.

The Board also meets with Internal Audit, Risk Management, Compliance, Finance and Strategy teams at least quarterly, as mandated by applicable laws and regulations. These interactions ensure comprehensive oversight of internal controls, risk mitigation, and financial performance. 

The Board retains the discretion to invite any member of executive management to participate in these meetings when necessary, strengthening financial and intellectual resources through informed, data-driven oversight.

Anti-Corruption Policies Communication: All employees across every operating market received communication on anti-corruption policies and procedures through electronic channels and publicly accessible materials. Tracking mechanisms support continuous monitoring of engagement. Policies were also communicated to all business partners, including suppliers and contractors, ensuring alignment with Zain’s ethical standards. This broad communication reinforces ethical expectations across the value chain.

Incidents of Corruption: Zain reported zero confirmed incidents of corruption in 2025. No employees were dismissed or disciplined for corruption-related activities, and no contracts with business partners were terminated or not renewed due to corruption violations. Furthermore, no public legal cases were brought against the company or its employees during the reporting period. This strong record protects the company’s reputation and minimizes operational and financial risks.