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Independent Director Agreement

Independent Director Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Independent Director Agreement

"I need an Independent Director Agreement for a Saudi-listed telecommunications company, compliant with CMA regulations, with specific provisions for virtual board participation and technology committee membership, starting March 2025."

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Document background
The Independent Director Agreement is a crucial document used when appointing independent members to a company's board of directors in Saudi Arabia. It is particularly relevant for joint stock companies, especially those listed on the Saudi Stock Exchange (Tadawul), where independent directors are mandatory under Capital Market Authority regulations. The agreement must comply with the Saudi Companies Law, Corporate Governance Regulations, and relevant CMA directives, while also adhering to Shariah principles. This document typically includes detailed provisions on independence criteria, duties, remuneration, and compliance requirements, reflecting both international best practices and local regulatory requirements. It serves as a key governance tool in implementing Saudi Arabia's Vision 2030 corporate governance objectives.
Suggested Sections

1. Parties: Identification of the Company and the Independent Director

2. Background: Context of the appointment and confirmation of director's independent status

3. Definitions: Key terms used throughout the agreement, including regulatory definitions from Saudi Companies Law and CMA regulations

4. Appointment and Term: Terms of appointment, duration, and renewal provisions

5. Independence Criteria: Specific criteria maintaining independence status as per CMA regulations

6. Duties and Responsibilities: Core duties, including statutory obligations under Saudi law and company-specific responsibilities

7. Time Commitment: Expected time dedication for board and committee meetings

8. Remuneration: Compensation structure, including fees and allowances

9. Confidentiality: Obligations regarding company information and trade secrets

10. Compliance: Adherence to Saudi laws, regulations, and corporate governance requirements

11. Termination: Conditions and processes for ending the appointment

12. Governing Law and Jurisdiction: Confirmation of Saudi law application and dispute resolution mechanisms

Optional Sections

1. Committee Appointments: Used when the director will serve on specific board committees

2. Share Ownership: Include when the company has specific requirements or restrictions on director share ownership

3. Insurance and Indemnification: Optional detailed provisions for director liability protection

4. External Interests: Include when director has specific external commitments requiring disclosure

5. Training and Development: Used when company provides specific director development programs

6. Electronic Communications: Include when specifying protocols for virtual board participation

7. Succession Planning: Optional section for longer-term appointments addressing succession

8. Related Party Transactions: Include when director has potential related party dealings

Suggested Schedules

1. Schedule 1: Independence Declaration: Detailed independence criteria checklist and director's declaration

2. Schedule 2: Remuneration Structure: Detailed breakdown of fees, allowances, and payment terms

3. Schedule 3: Board and Committee Meeting Schedule: Annual calendar of scheduled meetings and time commitments

4. Schedule 4: Company Policies: List of relevant company policies the director must comply with

5. Schedule 5: Conflict of Interest Disclosure: Template for ongoing conflict of interest disclosures

6. Appendix A: Code of Conduct: Company's code of conduct and ethical guidelines

7. Appendix B: Board Charter: Key provisions of the board charter relevant to independent directors

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Clauses
Appointment
Term and Renewal
Independence Requirements
Duties and Responsibilities
Authority
Time Commitment
Board Committees
Remuneration
Expenses
Confidentiality
Conflicts of Interest
Non-Competition
Related Party Transactions
Compliance
Corporate Governance
Regulatory Obligations
Board Meetings
Performance Evaluation
Training and Development
Insurance and Indemnification
Intellectual Property
Record Keeping
Company Policies
Representations and Warranties
Termination
Resignation
Notice
Force Majeure
Severability
Amendment
Assignment
Entire Agreement
Governing Law
Dispute Resolution
Shariah Compliance
Relevant Industries

Financial Services

Banking

Insurance

Real Estate

Manufacturing

Technology

Healthcare

Energy

Telecommunications

Mining

Retail

Transportation

Construction

Education

Professional Services

Relevant Teams

Legal

Compliance

Corporate Governance

Board Secretariat

Risk Management

Executive Office

Corporate Affairs

Regulatory Affairs

Internal Audit

Shareholder Relations

Relevant Roles

Independent Director

Board Chairman

Company Secretary

Corporate Governance Officer

Compliance Officer

Legal Counsel

Chief Executive Officer

Board Committee Chair

Chief Legal Officer

Corporate Secretary

Governance Director

Risk Officer

Industries
Companies Law (Royal Decree No. M/3 of 2015): Primary legislation governing companies in Saudi Arabia, including provisions on director appointments, duties, and responsibilities
Corporate Governance Regulations 2017 (amended 2021): Issued by Capital Market Authority (CMA), details requirements for independent directors, including independence criteria, roles, and responsibilities
Capital Market Law (Royal Decree No. M/30): Relevant for listed companies, contains provisions affecting director duties and disclosure requirements
Anti-Corruption Law (Royal Decree No. M/36): Contains provisions regarding conflicts of interest and ethical conduct that directors must adhere to
Labor Law (Royal Decree No. M/51): While independent directors aren't typically employees, certain provisions may be relevant for compensation and service terms
Competition Law (Royal Decree No. M/75): Relevant for non-compete provisions and market competition considerations in director agreements
Saudi Vision 2030 Governance Framework: National strategic framework affecting corporate governance practices and director responsibilities
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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