The Saudi Arabian Monetary Authority (SAMA) published the key principles for governance in financial institutions under the control and supervision of the Saudi Central Bank. The principles aim to set the minimum requirements that would enhance the effective management of financial institutions, direct their financial and non-financial resources toward achieving their strategic objectives, maintain their stability, and preserve the rights of stakeholders.
Subject to the mandatory provisions stipulated in relevant laws and regulations, these principles shall apply as guiding rules to credit information companies, payment and financial technology companies, money exchange companies and institutions, consumer microfinance companies, finance support companies, financial lease contract registration companies, and debt-based crowdfunding companies. The central bank may, at any time, enforce all or some of the provisions of these principles on a mandatory basis. The principles cover the following aspects:
- Qualifications of board members
- Formation, appointment, and board affairs
- Responsibilities of the board
- Responsibilities of executive management
- Committees formed by the board
- Rights of shareholders
- Disclosure and transparency
SAMA has issued several regulations on governance; these principles should be read alongside these regulations, which include principles of conduct and business ethics in financial institutions; principles of compliance for commercial banks operating in the Kingdom of Saudi Arabia; requirements for appointment to leadership positions in financial institutions that are under the supervision of the Central Bank; Shariah-compliant governance framework for local banks; and Sharia-compliant governance instructions for finance companies.
Related Link: Key Principles (PDF)
Keywords: Middle East and Africa, South Africa, Banking, Governance, ESG, Key Principles, Guidance, SAMA
Hasan leads Moody’s Analytics ESG methodology development. He is expert on carbon transition, nature related risks and is a guest lecturer at ESSEC Business school on sustainable finance.
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