Governance & Compliance
Aramex’s Board of Directors strives to cement the company’s position as a leader in corporate governance. Our Board selection process involves nominations by shareholders and other Board members, and strictly adheres to the Board’s Charter and Corporate Governance Guidelines. The process also ensures that all candidates are highly-qualified individuals who possess the necessary knowledge and expertise of economic, environmental and social issues pertinent to the company and its operations.
Aramex’s nine-member Board of Directors strives to cement the company’s position as a leader in corporate governance by implementing and upholding its Charter and Corporate Governance Guidelines. The current Aramex Board of Directors, which was elected by our Annual General Assembly on May 2011 consists of the following members:
|Mr. Abdullah M. Mazrui||Chairman||Independent||Non-Executive||Male||61||Since Inception||Emarati||Chairman (3 Company boards) Director (2 Company boards)|
|Mr. Fadi Ghandour||Founder and Vice Chairman||Non-Independent||Non-Executive||Male||54||2005||Jordanian||Director (1 Company board)|
|Mr. Hussien Hachem||Chief Executive Officer and Director||Non-Independent||Executive||Male||44||2011||Canadian||None|
|Mr. Helal Al-Marri||Director||Independent||Non-Executive||Male||37||Since Inception||Emarati||General Director (1 Company) CEO (1 Company) Chairman (1 Company board) Chairman (1 committee) Director (4 Company boards)|
|Mr. Ahmed Al-Badi||Director||Independent||Non-Executive||Male||57||Since Inception||Emarati||Chairman (1 Company board) Director (13 Company boards)|
|Mr. Arif Naqvi||Director||Independent||Non-Executive||Male||53||2005||Pakistani||Director (1 Company board)|
|Mr. Charles El Hage||Director||Independent||Non-Executive||Male||56||2011||French||None|
|Mr. Ayed Aljeaid||Director||Independent||Non-Executive||Male||57||Since Inception||Saudi||None|
|Mr. Mana Al-Mulla,||Director||Independent||Non-Executive||Male||37||2011||Emarati||CEO, VP and Director (1 Company board) Director (5 Company boards)|
Seven of the Board members (78%), including its chairman, are independent non-executive directors, one member is a non-independent non-executive director: Fadi Ghandour, the Founder and Vice Chairman, and the remaining member is a management representative: Hussein Hachem, CEO of Aramex.
Our Board selection process involves nominations by shareholders and other Board members, and strictly adheres to the Board’s Charter and Corporate Governance Guidelines. The process also ensures that all candidates are highly-qualified individuals who possess the necessary knowledge and expertise of economic, environmental and social issues pertinent to the company and its operations. In the rare event that potential conflicts of interest arise, they are self-declared by the members of the Board, who are then excused from related discussions. Where necessary, the Chair or other members are also entitled to identify potential conflicts of interest involving other members.
Aramex governance guidelines was structured in accordance with Federal Law No. 8 of 1984 regarding the Commercial Companies Law, and the new Corporate Governance Code for Joint- Stock Companies and the Institutional Discipline Criteria to assist the Board and its committees in the exercise of their responsibilities. Our governance includes the Nomination and remuneration, and the audit committees.
Boards of Directors
- The General Assembly should elect members of the Board of Directors by secret ballot. The majority of the members of the Board of Directors must be holders of a Gulf Corporation Council nationality, and must not be convicted of a crime of honor unless the competent authorities pardoned him/her.
- The Board of Directors shall elect from amongst its members a chairman and a Vice Chairman who will act on behalf of the Chairman in his absence. The chairman must be a national of the Gulf Corporation Council states.
- At least one third of Directors shall be Independent Directors, while the majority of Directors shall be Non-Executive Directors, who shall have experience and technical skills to the best interest of the company.
- In all cases, elected Non-Executive Directors shall be able to dedicate enough time and attention to the Board, their directorship of the Board of Directors must not conflict with any of their other interests.
- The position of Chairman of the Board of Directors and the Company’s Chief Executive Officer may not be held by the same person.
- The Board is responsible for reviewing the requisite skills and characteristics of new Board members as well as the composition of the Board as a whole. This assessment will include members’ qualification, as well as consideration of diversity, age, skills, and experience in the context of the needs of the Board.
- Below is a description of the desirable characteristics that the Board should evaluate when considering candidates for nomination as Directors. The Board will review such characteristics at least annually and perform any appropriate changes thereto.
- Integrity and Accountability: High ethical standards, integrity and strength of character in his or her personal and professional dealings and a willingness to act on and be accountable for his or her decisions.
- Informed Judgment: Demonstrate intelligence, wisdom and thoughtfulness in decision-making. Demonstrate a willingness to thoroughly discuss issues, ask questions, express reservations and voice dissent.
- Financial Literacy: Ability to read and understand balance sheets, income and cash flow statements. Understand financial ratios and other indices for evaluating company performance.
- Mature Confidence: Assertive, responsible and supportive in dealing with others. Respect for others, openness to others’ opinions and the willingness to listen.
- High Standards: History of achievements that reflect high standards for himself or herself and others.
- Accounting and Finance: Experience in financial accounting and corporate finance, especially with respect to trends in debt and equity markets. Familiarity with internal financial controls.
- Business Judgment: Record of making good business decisions and evidence that duties as a Director will be discharged in good faith and in a manner that is in the best interests of the company.
- Management: Experience in corporate management. Understand management trends in general and in the areas in which the company conducts its business.
- Crisis Response: Ability and time to perform during periods of both short-term and prolonged crisis.
- Industry/ Technology: Unique experience and skills in an area in which the company conducts its business, including science, manufacturing and technology relevant to the company.
- International Markets: Experience in global markets, international issues and foreign business practices.
- Leadership: Understand and possess skills and have a history of motivating high-performing, talented managers.
- Strategy and Vision: Skills and capacity to provide strategic insight and direction by encouraging innovations, conceptualizing key trends, evaluating strategic decisions, and challenging the companyto sharpen its vision.
Commitment to the Company
- Time and Effort: Willing to commit the time and energy necessary to satisfy the requirements of Board and Board Committee membership. Expected to attend and participate in all Board meetings and Board Committee meetings in which they are a member. Encouraged to attend all annual meetings of shareholders. A willingness to rigorously prepare prior to each meeting and actively participate in the meeting. Willingness to make himself or herself available to management upon request to provide advice and counsel.
- Awareness and Ongoing Education: Possess, or be willing to develop, a broad knowledge of both critical issues affecting the company (including industry, technology and market-specific information), and Director’s role and responsibilities (including the general legal principles that guide Board members).
- Other Commitments: In light of other existing commitments, ability to perform adequately as a Director, including preparation for and attendance at Board meetings and annual meetings of the shareholders, and a willingness to do so.
Team and Company Considerations
- Balancing the Board: Contributes talent, skills and experience that the Board needs as a team to supplement existing resources and provide talent for future needs.
- Diversity: Contributes to the Board in a way that can enhance perspective and experiences through diversity in gender, ethnic background, geographic origin, and professional experience (public, private, and non-profit sectors). Nomination of a candidate should not be based solely on these factors.
- The Board has established the following standing committees: the Audit Committee and the Nomination and Remuneration Committee. The Board may, from time to time, establish additional committees as necessary or appropriate.
- Committee members will be appointed by the Board. Consideration should be given to rotating committee members periodically although such is not mandatory.
- Each committee will have its own charter; the charters will set forth the purposes, goals and responsibilities of the committees as well as committee structure and operations and committee reporting to the Board.
- Committees shall be formed of not less than three Non-Executive Directors, at least two of which shall be Independent Directors, including one as head. The Chairman of the Board of Directors may not be a member of those committees.
In order to avoid conflict of interest within the board
- Director’s tasks shall include: To ensure that the priority shall be given to the company’s and shareholders’ interests in case of conflict of interests.
- Any Board member, having an interest in conflict with that of the company in respect of certain transactions presented to the Board for consideration and approval, shall have to report it to the Board. Such report must be documented in the meeting minutes, whereas the involved Director is excluded from participating in voting on the decision concerning the said transaction, and the exclusion is to be explicitly documented in the meeting minutes.
- In all cases, elected Non-Executive Directors shall be able to dedicate enough time and attention to the Board, their directorship of the Board of Directors must not conflict with any of their other interests.
- Directors must notify the Chairman or the General Counsel in a timely fashion before accepting an invitation to serve on the Board of another company. This prior notice is to allow discussion with the Chairman and/ or the General Counsel to review whether such other service will interfere with the Director’s service on the company’s Board, or create an actual or apparent conflict of interest for the Director.
- Any matters related to conflict of interest and/or related party are documented and reported in the Annual Corporate Governance Report which is published on the company’s website. This report is also reviewed by SCA
Regular Board meetings will be held once every two months, at least, upon a written convocation of the Chairman of the Board of Directors or a written request submitted by at least two Directors and special meetings will be called as necessary. Shareholders are entitled to raise issues with the Board during the Annual General Meeting. Two standing committees — the Audit Committee and the Nomination and Remuneration Committee — have their own charters that stipulate their responsibilities and tasks. The Nomination committee meets once a year. Moreover, The Audit Committee will meet whenever necessary, but not less than once every three months, at such time and place as is deemed appropriate.
Additional meetings may be requested by any member, the Internal Auditor or the External Auditor. The Committee receives direct reports from Aramex’s Internal Audit Function and briefs the Board accordingly, in compliance with the corporate governance code of the Securities and Commodities Authority (SCA). The Internal Audit is an independent activity designed to add value and improve the company’s operations. It employs a systematic and disciplined approach to the evaluation and improvement of the company’s effectiveness in the areas of risk management, control, and governance. Operating under the International Standards for the Professional Practice of Internal Auditing set forth by the Institute of Internal Auditors, the Internal Audit provides the Board of Directors, the Audit Committee and the management with independent assurance that financial and operational mechanisms are functioning as intended. It also serves to reassure members that appropriate control mechanisms are in place to manage areas of high-risk and implement benchmark policies, procedures and activities to achieve best practices.
The Board of Directors will:
- Review, evaluate and approve, on a regular basis, long-term plans for the company.
- Review, evaluate and approve the company’s budget and forecasts.
- Review, evaluate and approve major resource allocations and capital investments in accordance with the company’s Delegation of Authority Matrix.
- Review the financial and operating results of the company.
- Director tasks shall include: participating in the meetings of the Board of Directors and providing independent opinion on strategic matters, policy, performance, accountability, resources, basic appointments and activity criteria.
- The company shall work on implementing an environmental and social policy to favor the local community.
In keeping with Aramex’s commitment to being a responsible corporate citizen, our CEO, Mr. Hussein Hachem, regularly briefs the Board on the company’s strategic stakeholder approach, as well as its sustainability initiatives and results, and how these elements relate to overall corporate performance. Aramex strives to continuously pursue sustainability at the corporate level, and implements internal policies relating to the environment, responsible procurement, and whistle-blowing. Strategic sustainability-related decisions are discussed at Board meetings, and Board approval is required for all major sustainability initiatives or targets prior to their implementation, as per the Board’s code of conduct.
The Sustainability Council was formed to handle and evaluate matters related to economic, environmental and social topics. The Council includes members of the Board of Directors and meets quarterly, to decide on sustainability strategy and discuss any concerns.
The Sustainability Council, which is made up of six members, including a chairperson, discusses economic, environmental and social topics. The Chief Sustainability Officer then briefs the Chief Executive Officer on matters of economic, environment and society; the CEO then communicates these topics to the board, and the board then reverts back to the CSO. Moreover, the Chairman will review with each Director on a periodic basis the performance of each Director’s duties, as well as the role and responsibilities of each Director.
The Sustainability Council, along with the dedicated sustainability team, facilitates partnerships with the public and private sectors and civil society in order to expand and improve Aramex’s sustainability activities, impact and reach. Moreover, active stakeholder engagement through sessions, face-to-face meetings and survey ensure that our activities are in line with our stakeholders’ needs. The Sustainability Council approves Aramex’s annual report for publishing.
The Board sets the strategy for risk management, due diligence procedures related to economic, environmental and social impacts. These strategies are then communicated with the Council and delegated to the team for implementation. The sustainability council is headed by the vice chairman of the board, who in turn ensures alignment of the council’s performance with that of the Board of Directors and company strategy.
In 2013 we began the structuring of our risk management function. Mainly, this year we drafted our risk assessment guide, and developed a mechanism for the registration of risks and risk controls. We will continue deploying these mechanisms throughout our operations in 2014.
Controls are defined and built into a process/product/system etc. from the outset, and designed to ensure that risk mitigation is carried out effectively.
Only existing controls will be considered in the assessment of a risk. Planned controls have no relevance in the assessment (other than as part of the action planning process) as their effectiveness is unproven.
Most controls are designed to prevent the risk event actually occurring. Alternatively, controls may be designed to identify and highlight that a risk event has occurred, or to help limit the severity of impacts. Controls will generally be one of these types (although it is possible for a control to be more than one type).
During a risk assessment, the effectiveness of individual and groups of existing controls is evaluated. This helps inform the assessment of the likelihood of a risk event occurring and its impact(s), should it occur.
Where action is deemed necessary i.e. to avoid, reduce or transfer/share the risk, an appropriate action plan must be established.
This action plan documents the assignment of specific actions to individuals, with agreed target dates for completion.
Action plan progress is monitored centrally and the status of pending/completed actions is reported regularly to senior management.
Completion of an action should lead to a re-assessment of a risk (although, in the case of the introduction of new controls, it may be necessary to allow a period of time for sufficient evidence to be compiled on the effectiveness of those new controls).
In line with the AccountAbility AA1000 principle of inclusivity, shareholders and employees are encouraged to provide input via the whistle-blowing mechanism offered through the company’s intranet. Our whistle-blowing policy, implemented to emphasize Aramex’s commitment to transparency, ensures discrepancies are reported and dealt with promptly to ensure ethical business practices and protect employees. While the Board does not generally have direct contact with employees, it remains fully appraised of their opinions and concerns through the feedback processes offered by the Aramex system.
Each year the company’s shareholders receive the Board’s recommendation regarding the remuneration to be paid to the company’s directors. For the year ending in December 31, 2013, the company’s shareholders approved the Board’s recommendation that directors would receive US $68,000 each. In order to automatically succeed in placing an item on the Board’s agenda, a shareholder must possess a holding of at least 10% of the company’s shares. At present, the highest holding is less than 10%, which means items for discussion are tabled at the Board’s discretion.
Aramex is listed on the Dubai Financial Market (DFM), and complies with the Emirates Securities and Commodities Authority’s (ESCA) Corporate Governance Regulations for Joint Stock Companies and Institutional Discipline Criteria, a mandatory requirement since 2010. Furthermore, building on our commitment to transparency, we have produced an independent governance report in compliance with the ESCA. Moreover, we comply with ESCA regulation in relation to reviewing the performance of the board.
As a member of the transportation and logistics community, Aramex complies with all necessary regulations related to the industry; these include stipulations delivered by local and international regulators covering the handling of hazardous material and the accuracy of labeling and information concerning our services.
We strive to ensure that the impact of our services on all stakeholders is consistently positive, and that any negative impact we may have is reduced to an absolute minimum; for example, we are working tirelessly to reduce our carbon footprint.
We incorporated ethical business training into our induction program for the first time in 2011, and continued to provide further training to those leading our major operations. We view our training regime as an ongoing, continuous process, and intend to increase the frequency of our programs for existing employees.
During 2013 Aramex did not experience any instances of non-compliance with local or international regulators, nor did we face any anti-competitive or antitrust legal actions -an indication of the success of our aim to ensure all operations comply with applicable international and national laws and regulations.
Our internal auditing team conducts regular audits on all our offices covering all lines of business; this also includes corruption risk assessments. As far as we know, we did not have any cases of corruption during 2013.
Aramex policy dictates that the company shall not accept any funds from governments or political parties, and no such funds were received during 2013; neither did the company lend its support to any political party or movement.
- The Internal Audit Function is responsible for reporting critical concerns to the Audit Committee of the Board, at least on a quarterly basis. In 2013, we did not have any major critical concerns reported. (G50)
- The Audit Committee of the Board will report the activities and findings of the Internal Audit Function to the Board of Directors.
- The internal audit is an independent, objective assurance and consulting activity designed to add value and improve Aramex’s operations. It helps Aramex to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.
- The scope of internal auditing encompasses, but is not limited to, the examination and evaluation of the adequacy and effectiveness of Aramex’s governance, risk management and internal controls, process as well as the quality of performance in carrying out assigned responsibilities to achieve Aramex’s stated goals and objectives.
- The Internal Audit Function continuously follows up with management with regards to the implementation of the agreed upon action plans to resolve the findings, issues and concerns of the internal audit.
- On a quarterly basis, the Internal Audit Function reports the status of management’s action plans implementation.
We are declaring the remuneration of our highest governance body. As for our executive committee remuneration analysis, we will not be able to declare since it is not a business norm in the markets where we operate.
Aramex Compliance Program strives to ensure that the operation maintains a culture of respect, honesty and integrity. By providing a framework for the management of compliance issues, the program helps to ensure that each employee is able to recognize and avoid situations that might compromise Aramex integrity. The program has the support of leadership, demonstrated by a reporting structure that gives Aramex Compliance Officer direct access to senior leadership and the Board. The program has been created to provide the support and tools necessary to fulfill expectations that every staff member and employee act with honesty and integrity while performing their work.
Aramex code of conduct sets forth our endeavor to build an organizational culture that guides our actions and decision-making in a way that is rooted in what is fair and ethical, and what promotes a dignified life for all people.
Aramex code of conduct is the platform that paves the way for operating globally and interacts with our employees, agents, suppliers, and customers, this results in:
- Transparent, fair and professional procurement
- Selection of suppliers and partner compliance with all laws and regulations
- Equal employment opportunities
- Equitable and fair treatment and advancement opportunities for all employees
- Safe, secure and healthy working conditions
- Respect for colleagues and diversity
- Respect for universal human and labor rights
- Crisis and emergency management
- Conflict of interest
- Protection and efficient use of company assets and property
- Protection of confidential information including Aramex trade secrets and intellectual property
- Open communication and open door policy
- Business gifts and entertainment
- Bribery and corruption
Moreover, with the assistance of a third party audit firm, Aramex has expounded the code of conduct into single policies to ease the internal learning process and they are as follows:
- Trade compliance
- Improper gifts, entertainment and payment
- Legal and licensing
- Human and labor rights
- Conflict of interest
- Anti-competition and anti-trust
- Charitable donations and sponsorship
- Money laundering
Where policies, procedures and internal controls do not offer clear guidance for a particular course of action, employees and leaders are expected to honor the spirit of the code and/or to seek advice.
Along with publishing mentioned policies and the code of conduct on all Aramex internal and external web sites, Aramex management decided that the best way to relay the material and gain a better understanding of our ethics is to hold classroom training sessions for all Aramex employees. To that end, over the past two years, we have trained 72% of our employees on all topics included in our code of conduct, such as training on human and labor rights and anti-corruption policies. The training should cover all employees by the end of 2014. Moreover, to ensure complete understanding of these policies, we will begin in 2014 to send refresher messages, emails and on-the- spot quizzes to trained employees. Moreover, 100% of Aramex operations were assessed for risks related to corruption, and no cases of such were identified.
Class Room Training Summary
|Total Head Count||11649|
|Total Trained phase 1||6840|
|Total Trained Phase 2||3134|
We have demonstrated our genuine beliefs in our code of conduct by being in compliance with, but not limited to:
- Aramex participates in the World Economic Forum’s Partnering Against Corruption Initiative (PACI), which was launched in 2004 with the aim of consolidating industry efforts to fight corruption
- UK Bribery Act
- U.S Foreign Corruption Practice Act (FCPA)
- Accountability principles standards AA1000
- International Labor Organization (ILO)
- Other international and local laws
- UN Declaration on Human Rights
- Environmental standards
In 2013 (FY13), the program continued to refine its infrastructure, address active compliance issues, create new policies to minimize risk, and enhance formal and informal lines of communications in order to foster a culture of compliance at Aramex.
It is anticipated that unknown or underappreciated issues may still exist, so it is important to note that the program’s process of assessing and prioritizing compliance threats is ongoing and dynamic, allowing for strategic changes during the work plan year as unforeseen threats emerge.
This is an exciting time for the program as existing management systems are increasingly utilizing the program as a resource. We will continue to enhance the program and spread awareness, while concentrating on active assessment and monitoring of compliance risks.
As part of our commitment to uphold human rights, all Aramex locations across the globe were assessed for human rights, ensuring that there are no violations. Moreover, 100% of Aramex’s security team has received code of conduct training that includes a whole section about human and labor rights. We don’t offer training to suppliers and/or customers. However, we have initiated the processes of adding the human rights clauses, along with other code of conduct-related clauses, to our contracts and in the form of a questionnaire to suppliers and subcontractors. This includes any third party security providers.
In 2013, we began implementing our new Supplier Evaluation Form initiative, which surveys our suppliers’ compliance-related issues including human and labor rights anti-corruption and bribery, as well as environmental criteria such as the application of environmental management systems.
Moreover, we ensured the evaluation of all new suppliers with the use of the questionnaire. Starting from June of 2013, we ensured that 100% of our new suppliers have been evaluated through the questionnaire. Furthermore, we circulated the same to all major current suppliers.
The purpose of this questionnaire is to ensure that all of our suppliers and subcontractors are in compliance with internationally-recognized human and labor rights, anti-corruption and bribery laws and standards in all their business and non-business areas. Where we find gaps in the application of environmental management controls, we work with the suppliers to set plans to amend them. We should conclude this exercise toward the end of 2104. Moreover, we make sure to share our policies against the use of forced or
child labor with our business partners and raise awareness on the matter throughout our business circles.
Moreover, we plan to extend this evaluation to include a third party audit mechanism for our suppliers to ensure their compliance.
As far as we are aware, there have been no cases of human rights, child labor or compulsory and forced labor violations within our supply chain. Moreover, in 2013, we did not have any human rights, forced or child labor grievances or concerns related to our operations. Furthermore, we are not aware of any concerns of human rights, forced or child labor violations related to our suppliers, and we did not receive any through our formal grievance channels, nor did we identify or receive any complaints of negative social
impacts due to our operations or in our supply chain.
We did not identify any issues of significant negative impacts on the environment, beyond the emissions that result from the use of airlines, sea lines and road freight to transport our shipments and provide services to our clients. However, we account for these impacts along our supply chain through our calculation of our Scope 3 carbon footprint.
Aramex whistleblowing policy provides guidelines to Board Members, Aramex employees, customers and stakeholders with respect to the reporting of possible fraud, irregularities and grievances related to our code of conduct and social and environmental performance at Aramex. We encourage our employees and customers to use the whistleblowing system and provide sufficient training for them to report on whatever incident they encounter. For external concerns and complaints, we have a dedicated email for the general public to use in order to report any issue. These grievances are dealt with in the same mechanism as internal ones.
Cases that are reported in Aramex’s whistleblowing system are dealt with immediately by an independent committee. The investigation process involves an internal committee to reach the utmost decision.
After the investigation is complete, the HR representative will discuss the results of the investigation with the complainant and the accused. In case any party is dissatisfied, the party has the right to appeal within 10 working days from the date of completing the investigation. The appeal will be forwarded to the Regional HR Manager and/Regional Area Manager.
Corrective action includes, but is not limited to:
- Oral/written warning
- Requirement to provide a written apology
- Requirement to take Business Ethics training sessions or any training deemed necessary or related
- Suspension without pay for a maximum period of 60 working days
- Loss of employment
- Civil and criminal liability and local legalities