Corporate Governance

The Board’s main responsibility is to provide effective governance over the Company’s affairs for the benefit of its shareholders, and to balance the interests of its diverse stakeholders, including its customers, employees, suppliers and local communities. Apart from its mandated responsibilities, the Board reviews and approves annual business plans, strategic plans, operational initiatives, significant investments, funding initiatives and reviews the overall financial performance of the Company, in addition to the compensation and remuneration of senior management. In achieving the above-mentioned strategic tasks, the Board is required to act in good faith, provide insight and at all times to consider the interests of the Company as well as the shareholders. The Board met four times in 2007 and it was agreed that in future, the number of meetings will have to be at least six times a year, at the rate of one meeting every two months.

The Company’s Board consists of eight members. The majority of the Board is comprised of non-executive directors (independent and non-independent) in addition to the Chairman and an executive director. The Board is headed by the Chairman who schedules the meetings, prepares agenda in consultation with the Group Chief Executive Officer and effectively administers the flow of information between senior management and the Board.

The position of the Chairman and the Group Chief Executive Officer are held by two persons, in support of effective and clear supervision and accountability at the Board and management levels.

Members of the Board are prominent individuals with extensive experience in public administration, finance, legal, strategic management, retail and commercial businesses. Further details of the Directors, their qualifications and professional experience are provided  in the Annual Report, under the section Board of Directors, from page 23 to 28. 

To perform its duties, the Board has direct access to senior management. If necessary, the Board can seek independent professional advice at the Company’s expense.

The Board may establish and ensure the effective functioning of board committees & sub committees as it considers necessary or appropriate to oversee critical or major functional areas and to address matters which require detailed review or in-depth consideration. Further details of the Board Committees are provided in the following sections.

The main objective of the Audit Committee is to assist the Board of Directors in fulfilling its oversight and fiduciary responsibilities to Emaar Properties PJSC and its subsidiary and associated companies (‘’the Emaar Group’’) to act in the interest of the Emaar’s members and stakeholders as a whole.

During 2007, the Audit Committee concluded five meetings, which were headed by the Chairman and constituted by a majority of the Committee members. 

In preview of its scope of work, the Audit Committee responsibilities include review of the interim, annual Financial Statements and the Group Internal Control system. Further, the review scope includes rectifying measures of reported non-compliances with provisions or requirements of the Law. 

The Audit Committee also reviews arrangements by which staff of the Company may, in confidence, raise concerns about possible fraudulent activities and improprieties. Pursuant to this, the Audit Committee introduced “Hotline Policy” where staff may raise suspected concerns to the Audit Committee for further review.

It is the policy of the Company’s Board of Directors to maintain and support a quality internal audit function. It has been entrusted internally and reports directly to the Audit Committee.

The Internal Audit is guided by its Charter that represents the general authorization from the Audit Committee to perform Internal Audit activities within a certain scope of work in accordance with the annual audit plan approved by the Audit Committee.

The Internal Audit Charter also sets out the purpose, authority and responsibility of the Internal Audit function. It establishes the Internal Audit activity’s position within the organization, authorizes access to records, personnel and physical properties relevant to the performance of engagements and defines the scope of work.

The Internal Audit’s core responsibility is to review the effectiveness of the Internal Control systems within the Company. Internal Audit covers all business processes and support functions within the Company, whether situated in the UAE or internationally.

Reports raised by the Internal Audit are submitted to the Audit Committee and Senior Management of the Company. On an ongoing basis, the Audit Committee monitors the progress that management has made with respect to remedial actions taken on issues and findings raised by the Internal Audit.

The Board is responsible for ensuring that a framework of appropriate policies on Internal Controls are maintained and reviewed for their effectiveness. The system of Internal Controls is designed to provide reasonable assurance that the company’s objectives are achieved, assets are safeguarded, transactions are authorized and properly recorded and that material errors and irregularities are either prevented or would be detected in a timely manner. Additionally, establishing a sound system of Internal Controls is meant to safeguard the shareholders interests.

Towards this, written policies, guidelines and procedures, approval limits, automated controls and performance monitoring mechanisms were established and are in place. However, the system is intended to enable the group to identify and manage the risk inherent in its businesses and accordingly can provide reasonable but not absolute assurance against material misstatement or losses.

Assessment of the Internal Controls is obtained from ongoing reviews carried out by the Internal Audit function and the reports from External Auditors and Government Auditors on matters identified in course of their audits. Formal procedures are in place to deal with issues arising from these audits which are reviewed by the Senior Management, considered by the Audit Committee, and further reported to the Board.

Nominating Committee

The Company does not practise selective disclosure of price sensitive information. Information which could impact the share price of the Company is released to the public on a timely basis and in an accurate manner. As a reflection of Emaar’s commitment to disseminating information transparently, the Board approved a Disclosure Policy and established a Disclosure Committee at management level. The new Policy confirms in writing Emaar’s commitment to provide investors and stakeholders with material information in a broad and non-exclusionary fashion. In 2007, Emaar disclosed all material information to authorities as per the requirements of disclosure regulations. Company website is used effectively in communicating with investors and the public.

Annual reports and other financial results are announced and issued within the mandatory periods. During the Annual General Meeting, shareholders are given the opportunity to share their views and direct their queries regarding the Company to directors and senior management.

In the beginning of 2008, the board has resolved a new dividend policy at a minimum of 20% of the nominal value of the shares. The dividend policy will depend on relevant domestic and global market conditions as well as Emaar’s projected growth and capital commitments, and the actual dividends shall be subject to approval from the shareholders annually. The new dividend policy further demostrates Emaar’s strong investor relations and corporate governance policies, and will serve as a roadmap for the Company’s growth.

At Emaar, stakeholder rights established by laws or through mutual agreements are always respected. Corporate Values set the guidelines for the Board, executive management and employees in undertaking their duties and responsibilities. These values also set the background for Emaar’s stakeholder engagement activities.

Emaar’s main assets are its employees; the Company takes on itself to seek for better understanding of its employees concerns and needs by obtaining further insights from its own internal business partners, providing the utmost employee satisfaction in the corporate world. For this purpose Employee Satisfaction Surveys are undertaken annually.

Similarly, as part of communication with customers, Customer Satisfaction Surveys are regularly undertaken. Since 2005 the customer satisfaction surveys are conducted twice a year to measure and assess customer satisfaction throughout the customer life cycle experience. The results are always shared with departments for assessment and action on departmental and management level. Ever since the surveys started, the results show continuous improvement. 

Looking always for better understanding of our customers’ level of satisfaction and expectation, this year the survey will cover a larger segment of customers with their different levels of experiences, and the survey will include in-depth interviews in addition to face to face interviews.

Suppliers and sub-contractors of Emaar are given equal opportunities and tender processes are undertaken by the `Tender Policy` Guidelines. Corporate Services Department is the hub for Emaar and its subsidiaries for procurement of non-project related goods and services. The Department ensures that all requirements of the Company and the subsidiaries are procured in order to carry out the daily operations effectively and efficiently. The Department works on building strong relations and alliances with key strategic vendors and suppliers thus enabling the Company to deliver superior and cost-effective solutions to end users. 

Emaar has won the ISO 14001:2004 certification in 2007, for its environmental management processes, making the company the first property developer in the region to win ISO accreditations for adherence to both quality and environmental standards. With the award of the ISO 14001:2004 certification, Emaar has also underscored its commitment to the Green Buildings initiative of the Dubai government to create energy-efficient residential and commercial buildings that support sustainable development. 

Emaar’s ‘’Earth Watch’’ recycling initiative within its master-planned communities has been a phenomenal success and Emaar is extending it to all its projects. Emaar’s concern for sustainable development is ingrained in the company’s vision, and the winning of the ISO 14001:2004 international standard certification is the result of concerted efforts taken at all levels - its staff and customers - to promote a healthy environment.