Case study: How the Saudi Investment Bank gains and preserves public trust through effective corporate governance practices
As one of Saudi Arabia’s leading financial institutions, seeking to promote economic stability and growth for employees, shareholders, customers, and Saudi Arabia, the Saudi Investment Bank (SAIB) tries, through effective corporate governance practices, to embrace and promote transparency, gaining and preserving public trust.
This case study is based on the 2016 Sustainability Report by the Saudi Investment Bank published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate that CSR/ sustainability reporting done responsibly is achieved by identifying a company’s most important impacts on the environment and stakeholders and by measuring, managing and changing.
Promoting public trust and confidence in the Saudi Investment Bank (SAIB) and in the banking system as a whole is key for SAIB in building a successful, sustainable business. In order to gain and preserve public trust through effective corporate governance practices, SAIB took action to:
- monitor compliance, assess risks and opportunities through the Board of Directors
- comply with governance requirements set out by national and international authorities and agreements
- assess the effectiveness of corporate governance practices
- implement a Code of Conduct and Ethics
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With this case study you will see:
- Which are the most important impacts (material issues) SAIB has identified;
- How SAIB proceeded with stakeholder engagement, and
- What actions were taken by SAIB to gain and preserve public trust through effective corporate governance practices
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What are the material issues the company has identified?
In its 2016 Sustainability Report SAIB identified a range of material issues, such as customer trust and protection, quality of services and customer satisfaction, accurate and transparent disclosure of performance, data security, financial performance. Among these, achieving and maintaining public trust as a result of effective corporate governance practices stands out as a key material issue for SAIB.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups SAIB engages with:
Information collected through stakeholder engagement as described below helped SAIB identify material issues, based on GRI’s Reporting Principles.
| Stakeholder Group | Method of engagement |
| Clients
| · Branches · Flexx Call contact center · Mobile and online banking · Website · Social media channels · Relationship managers · Customer research · SMS Banking · Web Chat · ATM · Cash Deposit Machine · Interactive Teller Machine |
| Staff | · Employee engagement survey · SAIB internal magazine · Training and development · Regular meetings · Annual performance reviews · HR helpdesk · Employee Suggestions · Program – “My Idea” · Recognition and awards programs · Code of Conduct · Innovation center · Yammer (staff social media app) · Internal Communication announcements |
| Shareholders
| · Annual general assembly · Board of Directors meetings · Annual, semi-annual and quarterly reports · Shareholder Relations team · Complaints handling mechanism |
| Environmental groups
| · Engagements with various environmentally oriented non-governmental organizations (nGos) · Annual Sustainability Reports which publish environmental performance data |
| Regulators
| · Letter correspondence and email communications · Meetings and onsite visits · Regular reporting · Participation in governmental initiatives and campaigns |
| Local community | · Public reports · Media relations activities · SAIB’s own employees, who are primarily nationals · Charitable initiatives supporting important local issues · Website · Social media |
| Vendors and service providers | · Bidding and tendering · Procurement and vendor management policy · Complaint management framework |
What actions were taken by SAIB to gain and preserve public trust through effective corporate governance practices?
In its 2016 Sustainability Report SAIB reports that it took the following actions for gaining and preserving public trust through effective corporate governance practices:
- Monitoring compliance, assessing risks and opportunities through the Board of Directors
- SAIB’s Board of Directors, whose members are appointed for a period of three years by SAIB’s shareholders, oversees the risks and opportunities brought about by the Bank’s activities, and is also responsible for ensuring and monitoring legislative and regulatory compliance, as well as compliance with ethical standards. The Board of Directors can be contacted by the public by means of an e-form.
- Complying with governance requirements set out by national and international authorities and agreements
- SAIB complies with the governance requirements set forth by Basel III, the Saudi Arabian Monetary Authority (SAMA), the Capital Market Authority (CMA) and the Ministry of Commerce and Investment (MCI).
- Assessing the effectiveness of corporate governance practices
- As a member of the S&P/Hawkamah ESG Pan Arab Index, SAIB is ranked on its environmental, social and governance performance – improving its ranking from 7th place in 2015 to 6th in 2016 – and uses such rankings to assess the effectiveness of its corporate governance practices.
- Implementing a Code of Conduct and Ethics
- To make sure that it operates in an ethical and responsible manner, complying with relevant legislation and regulations, [tweetthis]SAIB implements a Board of Directors Conduct and Ethics Code and an Employee Code of Conduct[/tweetthis].
Which GRI Standards have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 102-21 Consulting stakeholders on economic, environmental, and social topics
2) Disclosure 205-1 Operations assessed for risks related to corruption
78% of the world’s 250 largest companies report in accordance with the GRI Standards
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References:
1) This case study is based on published information by SAIB, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
http://database.globalreporting.org/
2) http://www.fbrh.co.uk/en/global-reporting-initiative-gri-g4-guidelines-download-page
3) https://g4.globalreporting.org/Pages/default.aspx
4) https://www.globalreporting.org/standards/gri-standards-download-center/
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