Annual Report 2012

CORPORATE GOVERNANCE

INTEGRITY IS
OUR WATCHWORD

AS PART OF THE INITIAL ESTABLISHMENT OF ABU DHABI HEALTH SERVICES COMPANY PJSC (SEHA) IN NOVEMBER 2007, A CORPORATE GOVERNANCE FRAMEWORK WAS ESTABLISHED TO PROVIDE A STRUCTURE FOR EFFICIENT AND RELIABLE CORPORATE DECISION-MAKING AND THE CONTROL, MONITORING, AND REPORTING OF BUSINESS PROCESSES IN ACCORDANCE WITH BEST PRACTICES (WITHIN SEHA’S CURRENT OPERATING ENVIRONMENT), APPLICABLE LAW, AND SEHA’S CONSTITUTIONAL DOCUMENTS (INCLUDING THE EMIRI DECREE). THE CORPORATE GOVERNANCE FRAMEWORK WAS UPDATED IN JANUARY 2011 TO REFLECT THE DEVELOPMENT OF THE ORGANIZATION SINCE ITS ESTABLISHMENT.

Independence from Government of Abu Dhabi

Before its establishment, SEHA was part of the Government of Abu Dhabi through the ownership and operation by the Health Authority-Abu Dhabi (HA-AD) of public healthcare assets. However, pursuant to the Emiri decree, SEHA has been made independent of the Government, except in the latter’s capacity as shareholder. For example, the decree provides that SEHA is “an independent corporate body with full legal capacity to practice its activities and achieve its objectives and with financial and administrative independence in all its affairs”.

Shareholder Governance

By operation of the Emiri decree, the entire share capital of SEHA is owned and held by the Government as the sole legal and beneficial shareholder, acting in shareholder matters through the Executive Council. Under the Companies Act, certain matters are reserved to and voted on by shareholders of a public joint stock company at the annual general meeting. The Executive Council undertakes all functions and practices all competences of such general assembly through issuing Executive Council resolutions.

Board of Directors and Committees

SEHA has a board of directors consisting of government, business, and industry representatives who provide leadership and strategic direction with predominantly privatesector objectives. The Emiri decree gives the board wide powers to carry out the objectives of SEHA (subject to approval of Executive Council or, in cer tain cases, HA-AD).

The members of the Board are appointed by the Executive Council through issuance of resolutions. The current directors consist of senior management of HA-AD, other Government ministries and Government-owned entities, and a member of SEHA senior management who is also the Chairman of the Board.

The Board of Directors is responsible for the overall management of SEHA by leading and directing SEHA’s affairs and setting its strategic direction and objectives. The decree mandates the basic board structure and responsibilities. It provides that:
  • SEHA shall be managed by a Board of Directors which shall consist of a Chairman and a number of members
  • The Board is required to be appointed by a resolution of the Chairman of the Executive Council, which shall also establish the terms of Board membership and financial compensation for directors
To ensure transparency regarding independence and potential conflicts of interest in Board decision-making, each Board member is required to review and sign a Statement of Independence and Conflicts of Interest annually or when information contained in the form changes.

The Board of Directors has established certain committees which are responsible for reviewing, informing, and making recommendations to the Board with respect to the committee’s mandate. These committees are the Audit Committee, which is responsible for matters relating to finance and audit, and the Nomination and Remuneration Committee, which is responsible for matters relating to Board nominations and senior management and Board compensation. In addition, SEHA management has implemented Executive, Corporate Procurement, and Corporate Human Resources committees.

Meetings and voting

The procedures of the Board are set out in the Emiri decree and SEHA’s articles of association, which stipulate that the Board must meet at least once every three months. Currently the Board meets quarterly and may (in accordance with the Companies Act) receive and approve resolutions in writing between meetings. Decisions of the Board at meetings must be by majority vote of those present. In the case of an equal number of votes representing each side, the deciding vote shall be made by the Chairman. A meeting of the Board will be valid only if a majority of directors are present. In accordance with the Companies Act, the term of Board membership is three years and a director may serve more than one consecutive term.

Other procedures of the Board of Directors, as prescribed by the Companies Act, are set out in the articles of association, including notifying the Board and abstaining from voting on any transaction or matter submitted to the Board for discussion and approval.

Control of Business Entities

SEHA is organized into a Corporate Office and separate operational Business Entities. Oversight, coordination, and control of the Business Entities are exercised through an appropriate level of organizational governance and operational policies (including delegation of authority limits), functional direct reporting and meetings, and on-going data and performance reviews (including quarterly key performance indicators assessment).