The Jumeirah Group Board places considerable emphasis on maintaining the highest standards of corporate governance in the business to enhance performance.
Corporate Governance Framework
The Company has a well-defined and well-structured corporate governance framework in place to support the Board’s aim of promoting a viable and competitive business and achieving long term and sustainable shareholder value.
In order to maintain this framework, it is essential that it is underpinned by the right culture, values and behaviours, which the Company strives to achieve through its established Hallmarks and Guiding Principles, both at the top and throughout the entire organisation.
The effectiveness of the Company’s corporate governance framework is achieved through focus on effective risk management and internal control, legal and regulatory compliance, and business conduct and ethics.
In order to support and provide a framework for the Company’s strategic decision making, Dubai Holding has established an investment mandate. The Company makes its decisions transparently with appropriate disclosures of interests so that its shareholder can hold Directors and management accountable. The Company is well monitored through internal audit, which is managed through the Audit and Risk Committee, together with a risk management working group.
Board Structure & Composition
An important responsibility of the Board is to foster the long-term prosperity of the Company. In support of this aim, the Board’s role is to provide entrepreneurial leadership within a framework of prudent and effective controls which enables risk to be assessed and managed. The Board is responsible for formulating the business strategy and ensuring that the necessary financial and human resources are in place to meet its objectives. It is also responsible for monitoring and reviewing the operating and financial performance of the Company.
The full responsibilities of the Board and the authority it delegates to its Committees and to management are outlined in written terms of reference for the Board and each of the Committees, which are reviewed and revised, as appropriate, on an annual basis. During the year, the full set of Board, Committees and working groups’ terms of reference were revised and updated.
The Board comprises five members including three independent Non-Executive Directors and two Executive Directors. The Non-Executive Directors bring independent judgement and contribute diversity and depth of views to the Board, enabling a more effective decision-making process. They constructively challenge and help develop proposals on strategy and scrutinise the performance of management in meeting its agreed targets and objectives. During the year, the Board convened in person on five occasions.
There were no changes to the Board members in 2014. On 25 February 2015, Richard Hartman, bringing over 35 years’ experience in the hotel and restaurant industry, was appointed Independent Non-Executive Director. On the same date Ghaith Al Ghaith, CEO of flydubai, assumed the role of Vice Chairman of the Board. He has been an advisor to the Board since June 2008 and was appointed a Board Director in June 2012. After a tenure of eight years as a member of the Board, Sir David Michels stepped down on 24 February 2015. He provided invaluable contribution to the governance of the Company over many years together with his strategic input and support for the Group’s success.
The biographies of the Board members can be found here.
Good governance demands that boards are engaged, and therefore the Company has established a framework to promote and facilitate Board members’ engagement. Essential aspects include well defined expectations which are clearly set out at the time of appointment, as well as in the terms of reference of the Board and its Committees. Regular communication through emails and monthly reports keeps Board members updated and connected to the business between meetings, and the use of an online board portal enables easy and timely access to meeting materials, votes and other communication, such as a compendium of reference material. Another essential aspect to engagement is the effective use of Board members’ skills and experience, which is encouraged through active participation and discussion both at and between Board meetings. Board engagement is also influenced by the ability to evaluate performance, which is provided in more detail below.
Activities took place during the year to promote enhanced Board engagement and a better understanding of the business. These included bringing the Board together at one of the overseas hotels it manages for a set of Board and Committee meetings, which included a strategy implementation session, a Development exhibition of domestic and international projects, an interactive Risk Workshop, and social events to promote further interaction between the Board and senior management.
In line with Dubai Holding’s strategic objectives to develop and enhance the Company’s corporate governance, the Board undertook a formal and rigorous evaluation of its own performance and that of its Committees in the previous year. After careful consideration of the findings, the Board agreed its actions and priorities for 2014.
With a view to seeking continuous improvement in the Board’s performance and engagement, an enhanced evaluation was undertaken for 2014 comprising a questionnaire, using the online board portal to ensure anonymity, together with one-to-one interviews with an independent governance consultant who was appointed to facilitate the process. Key areas of focus covered in the evaluation related to strategy, risk governance, the Board’s role, composition and processes, interaction with Management, effectiveness of the Board Committees and relationships with key stakeholders.