A draft amendment to the Corporate Governance Regulations, announced by the Capital Market Authority (CMA) required companies to form internal audit units or departments in order to enhance transparency. The Authority is seeking public opinion regarding it for a period of 30 calendar days, ending on March 10, 2021.
According to a statement issued by the Authority, the proposed amendments in the project aim to strengthen the internal control of the joint stock companies listed on the financial market, and to develop the provisions regulating the signs of independence of the members of the Board of Directors in line with best practices and international standards in this regard.
The most prominent of the main elements of the project are the transformation of Articles 76, 77 and 78 of the Corporate Governance Regulations related to internal audit work to change from guidance materials into mandatory articles with the aim of strengthening internal control.
These articles relate to the formation of the internal audit unit or department and the internal audit plan. The regulations also include amending Article 39 of the Corporate Governance Regulations relating to the training of members of the Board of Directors and the Executive Management
It also includes training and qualifying the members of the committees formed under the Corporate Governance Regulations and amending Paragraph (c) of Article 20 of the Corporate Governance Regulations by stating the cases related to the business and contracts that are prepared for the company’s account.
The Authority receives the opinions and comments of interested persons and those concerned through the dedicated form via e-mail: (Laws.Regulations@cma.org.sa).
The Market Authority said that all opinions and observations will be subject to attention and study for the purpose of approving the final version of the project.