CORPORATE GOVERNANCE

Corporate Governance

Before the company was listed on the Egyptian Stock Exchange (EGX), ISP recognised the importance of governance and compliance. The company was established with the potential and vision to grow, and ISP chased that goal fervently, reaching new horizons of development and advancement. This approach has set the platform for establishing a resilient governance culture that grew as the company matured. ISP developed a governance structure that ensured the company’s best practices and helped ISP realise its potential.

Our Corporate Governance approach is built on fostering an environment of respect, trust, transparency, and accountability. In this regard, we built independent, effective structures to ensure the resilience of this spirit. Setting the mechanisms and tools that provide effective governance and creating the facilities necessary to govern ISP’s operations and performance were essential to building the company’s credibility. The governance framework that Ibnsina adopted ensures a proper communication mechanism is set in place to guarantee transparency across its departments, affairs, and day-to-day operations.

Board of Directors

The Board consists of 11 members, two independent, six non-executives, including the chairman, and the rest executive members, including the Vice Chairman and the Managing Director. The board has one female representative, but ISP’s governing board wishes to increase that number. The board's composition exhibits a balance of competency and expertise amongst its members that guarantees the highest level of transparency, accountability, and diversity that would guide the company toward success. The criteria for selecting board members are essentially based on experience and knowledge, covering financial and non-financial elements, and is the paramount duty of the board. The board orchestrates the affairs of the company, sets the business strategy and overall direction, oversees operational, financial, and ethical performance, sets the policy for the company's ethics and integrity, manages the implementation of compensation policies, and reacts promptly and swiftly to the concerns of the shareholders and stakeholders at large.

Board Committees

Audit and Governance Committee

The Committee convenes at least quarterly and comprises six members, out of which, three are dependent non-executive members and three are independent non-executive members.

Roles and Responsibilities

· Reviews the company’s internal controls procedures and ensures compliance

· Examines accounting policies and changes resulting from applying new accounting standards

· Analyses and reviews internal audit plan, its mechanism and procedures

· Analyses and reviews drafting of periodic reports presented to the different managerial levels

· Examines the methods followed in drafting and reviewing the following:

· Routine and annual financial statements,

· Releases of public and private offerings, and

· Projected balance sheets, including cash flow and income statements.

· Examines initial financial information before presenting it to the board of directors and the financial auditor

· Responsible for the appointment, compensation and oversight of the work of the auditor and matters related to resignation or dismissal in a manner that does not violate the provisions of the law

· Assigns tasks to auditors other than reviews of financial statements and gives recommendations on fees in a fashion that safeguards their independence

· Reviews the auditor’s report and follows up on comments and remarks, and settles disputes between the management and the auditor

· Ensures the submission of a report by an independent advisor on the nature of transactions and acquisitions executed with intended parties and the extent of its harm to the interest of the company or its shareholders

· Ensures the application of the necessary controls to preserve the company's assets

· Conducts periodic evaluation of administrative procedures to ensure compliance with the rules and regulations and

· Prepares reports for the Board of Directors.

ISP created auditing processes that ensure internal compliance of all departments and operations with a mandate to maintain financial accountability and business transparency.

· Developing research and promoting innovative solutions to increase productivity, protect the environment, generate income, and optimise consumption.

· Identifying strategic environmental, social, and governance goals.

· Evaluating the company’s long-term ESG performance and contributing to the achievement of its goals.

· Ensuring strategic planning.

Remuneration Committee

The Committee convenes annually and comprises two dependent non-executive members. The Committee recommends the remunerations and fees of the directors, executives, and non-executive directors.

Investment Committee

The Investment Committee convenes at least quarterly and comprises four members three dependent executive members and one dependent non-executive member. The Committee works in conjunction with the Board of Directors.

Roles and responsibilities of the Investment Committee:

· Assists the Board of Directors in executing its obligations related to financial and investment policies and regulations

· Reviews and evaluates investment opportunities and their alignment with the company’s investment strategy

· Monitors and assesses existing and future holdings and submits its recommendations to the board of directors

· Supervises the advisory work related to the mandate of the committee, in addition to the tasks assigned by the board of directors

· Submits audit evaluation reviews of company policies, investments, and funding criteria

· Conducts studies on core business-related investments

· Monitors and reviews new investment agreements and offers recommendations for potential investment opportunities

· Oversees and evaluates the investment portfolio on behalf of the Board of Directors and presents the findings and

· Monitors investment operations within its work scope.

Sustainability Committee

The Sustainability Committee convenes annually and comprises five members, of which, two are dependent executive members, two are dependent non-executive members and one is an independent non-executive member.

Sustainability matters are discussed at the board level, and substantial measures and decisions have been taken to minimise the company’s environmental footprint. Many initiatives were enacted to make necessary changes in the interest of the business. ISP is committed to reporting on its ESG initiatives and their impact on the community, environment and business performance, outlining its financial and non-financial results. The road to business sustainability entails learning, commitment, engagement, research and innovation. It is essential to keep track of the company’s progress toward sustainability, stay focused on its objectives, create sound impact, and assess the effectiveness of our initiatives.

As we aspire to become a responsible business and show our commitment to the environment and the community, we opted to create a sustainability committee to manage our impact. We believe it’s an essential step toward steady and sustained growth. In addition, sustainable practices will encourage us to conscientiously and wisely utilise our resources and discover previously unimaginable opportunities for innovation and progress.

In publishing our first sustainability report, the committee members were responsible for outlining our first standalone sustainability report and it is also responsible for formally reviewing and approving our sustainability report and ensuring that all material topics are covered.

Members of the committee were selected based on their qualifications, innovative skills, and level of expertise.

General Assembly

All shareholders are invited to attend the General Assembly. Essential and material topics are raised during the annual General Assembly Meeting to ensure honest disclosure and effective decision-making that primarily benefits the company's and stakeholders' interests. The General Assembly rigorously complies with the rules and regulations of the Egyptian Stock Exchange and the Financial Regulatory Authority.

Disclosure and Internal Controls

ISP enforces policies and procedures to cover the company’s transparency and disclosure. The Investor Relations Department (IR) is responsible for disclosing accurate and timely information to the shareholders and stakeholders on the stock exchange disclosure portals and through local and international conferences.

Our disclosure policy ensures ISP’s commitment to providing information on its environmental, social, and governance activities transparently and comprehensively. In addition, the policy guarantees prompt and accountable information about the company’s ESG performance, strategic direction, and business endeavours to enable investors to make informative decisions.

To better serve our investors, we created an investor relation section on our website specifically designed to provide updated information about the company’s ESG performance and make it readily accessible for the investors and shareholders.

 

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