Corporate governance
Our corporate behaviour
In addition to adhering to and promoting good corporate governance, ACWA Power supports exemplary corporate behaviour by adopting a stringent compliance approach to ensure that we adopt the highest standards of ethics, conduct business with reputable third parties and comply with international best practice.
Our compliance approach
One of the most important factors for the success of any organisation is its compliance with laws, rules and regulations. Compliance protects the Company’s reputation and credibility, serves shareholders’ interests, ensures customer satisfaction and reduces litigation. Compliance is a comprehensive and multi‑aspect responsibility involving all parties in a company; it starts with the Board of Directors and senior management and ends with all employees and contractors, each according to the authority and responsibilities entrusted to them.
ACWA Power has accomplished high standards of ethics and integrity in all aspects of our business conduct. We are committed to complying with the applicable legislation and obligations in force in the countries where we operate. To facilitate this objective, the Company has developed and implemented a Compliance Management Framework, which is intended to demonstrate the Company’s commitment, in the clearest possible terms, as follows:
- Ensuring the highest standards of ethics and compliance with all applicable laws, regulations, rules and policies.
- Detecting and swiftly correcting identified compliance gaps.
- Eliminating misconduct and other wrongdoing.
The Compliance Management Framework lays down the policy guidelines and the detailed compliance practices to be implemented.
ACWA Power operates across multiple jurisdictions and is required to comply with a complex compliance landscape, consisting of a plethora of obligations imposed by regulators, arising from agreements or from federal, local, or global regulations. Compliance obligations include one‑time, event‑based, ongoing, licenses, filings and statutory dues that need to be tracked and acted upon in a timely manner. This diverse landscape imposes a regular monitoring and screening to ensure that the set of rules, regulations and laws that ACWA Power and its affiliates must adhere to in order to operate legally and ethically, is properly identified and complied with.
In 2023, the Compliance Department trained, informed, and advised employees across all business units on the applicable regulatory requirements, contractual obligations and internal Group‑wide policies. In addition to whistleblowing and conflict of interest webinars (see below), the Compliance Department delivered six orientation sessions for almost 30 new joiners from different departments and levels.
The department also organised training for the Compliance Champions network. Compliance champions play a crucial role in promoting and maintaining ethical behaviour, regulatory adherence, and best practices within the workplace.
One of the solutions the Compliance function has implemented to help building and fostering a culture of compliance in ACWA Power is the Compliance Portal. It is a ‘one‑stop‑shop’ where the employees of ACWA Power can easily connect with the Compliance Department, directly access policies and procedures having compliance bearing or initiate key compliance processes. It allows employees to submit declarations of conflict of interest or request authorisation before offering/accepting gifts, entertainment and hospitality. As a further step, the portal will also allow employees to submit to Compliance requests for performing due diligence screening on high risk third parties. This additional enhancement is planned to be finalised in 2024.
With a view to take advantage of the new existing and available technologies, an AI‑chatbot was launched to have in place a tool able to effectively support the compliance team in liaising with employees and addressing compliance‑related queries. The project kicked‑off in 2023, with extended capabilities to be implemented during 2024.
Our code of conduct
ACWA Power strives to offer a secure and positive work environment to encourage its employees to work to the very best of their abilities but, at the same time, expects employees to portray certain ethical and cultural values and to project an image of integrity and professionalism.
The Company has implemented a Code of Conduct and Ethics Policy (the Code, which sets down key guidelines and compliance practices which all employees are expected to observe, wherever they are located or operate.
The Code is a forward‑looking document and outlines the ethical responsibilities that will grow our organisation, reputation and business. It aims to provide guidance on general conduct in order to maintain harmonious working relations internally, with clients and other stakeholders, in line with the laws of the relevant jurisdiction and ACWA Power’s values, ethics and corporate policies.
To help foster awareness of the Code, we have developed mandatory e‑learning modules, which offer guidance in an interactive and engaging way to help employees gain a better understanding of the guidelines and practices set out in the Code and so adhere to the highest ethical standards. The training is ongoing and is mandatory for all employees.
Engaging with trusted partners
With business regulations worldwide becoming increasingly complex, it is essential for ACWA Power to entertain business exclusively with partners of good repute, to ensure that third‑party risk can be mitigated.
In view of our global expansion, we have implemented a thorough Know Your Customer (KYC) process, so risk‑based due diligence on third parties can be conducted before agreements are entered into. The process helps reduce potential risks such as fraud, corruption, bribery, money laundering and similar malpractices.
In 2023, the Compliance Department conducted a webinar on Third‑Party Due Diligence for all ACWA Power group employees to build awareness on the Third‑Party Due Diligence and Know Your Customer framework currently operational in the Company. It highlighted the purpose of the third‑party due diligence and (KYC) process, third‑party scope, exception of due diligence screening and due diligence risk assessment outcome. More than 240 employees attended the session.
In 2023, the Ethics Policy was revised and amended to reflect the major principles of the Company. The additions included provisions specifying applicability of the Code to the vendors, the definition of Primary Compliance Training courses to be completed by Employees within 2 months from joining, the Company’s commitment to protecting the confidentiality and integrity of personal data and so on.
Anti‑corruption
ACWA Power has zero‑tolerance for any bribery and corruption activities and is committed to conducting its business ethically and in compliance with all applicable domestic and foreign anti‑bribery and anti‑corruption laws and regulations. To this end, the company’s Management Committee approved the Anti‑Bribery and Anti‑Corruption Policy (ABC Policy) in 2021. This policy applies to Directors, officers, third parties such as consultants, agents, vendors, suppliers and independent contractors and all employees of ACWA Power, including its subsidiaries, business units and branches.
The ABC Policy is overseen by Senior Management, administered by an individual with sufficient authority, expertise and resources and endorsed by the Board of Directors. Senior Management has the oversight responsibility and allocates sufficient resources to achieve reasonably effective operations. Periodic updates and material issue reporting are made to the Executive Board and the Board of Directors.
For all new customers, the Company performs Customer Due Diligence to ensure that they are properly risk‑assessed. To further protect the Company, ACWA Power may conduct heightened due diligence in circumstances where there is a reason for it.
The Risk Management Department develops metrics designed to assess the effectiveness of the financial crime risk controls in place at ACWA Power and provides Senior Management and the Board with oversight as to the current position regarding risks and issues. The financial crime metrics are also reported to the relevant Executive and Board‑level Committees in accordance with the Governance structure of the Company.
All the new Directors, officers, employees, consultants and contractors of ACWA Power at the time of their induction are provided with an overview of the Policy, educated on its importance and informed where the Policy is available for future reference. In addition, all Directors, officers and employees of ACWA Power, including its subsidiaries, business units and branches, receive annual refresher training on the Policy and are asked annually to formally accept that they will comply with this Policy.
All Directors, officers, employees and long‑term consultants and contractors of ACWA Power provide annual certification of compliance to the Policy. As for short‑term contractors and consultants (contracted for less than six months), suppliers, business partners and third parties, ACWA Power provides them with a copy of the Policy and communicates the zero‑tolerance attitude and importance of their adherence to anti‑bribery and anti‑corruption laws and regulations.
Our whistleblowing programme
ACWA Power is committed to conducting its business with the highest standards of ethics and integrity by treating employees and partners with utmost respect and professionalism, fostering a culture of compliance and accountability for own actions, and promoting an environment where employees, third parties and stakeholders are encouraged to raise their concerns confidently regarding any unethical behaviour or any wrongdoing in the Company.
A dedicated Compliance line provides a mechanism for the confidential and anonymous submission of concerns through an independent third‑party, Ethics Point, which is accessible at any time.
The purpose of the whistle‑blower procedure is to define the processes and actions that must be followed to blow the whistle and report identified concerns through dedicated channels.
The main objectives of this procedure are to:
- raise awareness on the whistle‑blower programme in place at ACWA Power;
- explain the importance of reporting serious concerns;
- explain who is a whistle‑blower and when to blow the whistle;
- identify the types of concerns to be reported;
- list the commitment expected from whistle‑blowers;
- identify channels available to report concerns;
- provide an overview on the mechanism to investigate and remedy any wrongdoing; and
- set out the key performance indicators (KPI) of the whistle‑blower programme.
This procedure should be read in conjunction with ACWA Power’s whistle‑blower policy and code of conduct and ethics policy. This whistle‑blower procedure applies to all employees of ACWA Power, including business units and wholly‑owned subsidiaries.
In 2023, the Compliance Department also started management of the whistle‑blower programme, which provides employees with a channel for raising any ethical breach or potential violation of laws/policies. The revised Ethics policy stresses the Company’s commitment to the highest standards of quality, honesty, openness, and accountability and the obligation to treat whistle‑blowers that come forward with utmost confidentiality. In 2023, a new management committee was formed (Culture and Values Committee) chaired by the Managing Director of ACWA Power, whose role is to focus on the WB cases impacting culture and values of ACWA Power.
During the course of 2023 ACWA Power received notification of 54 whistleblow cases through various channels which were properly evaluated and investigated. Out of these 54 notifications, 12 major cases were escalated to the Disciplinary Committee for further review and necessary disciplinary actions. The WB cases assessed during the year gave rise to 72 action items, mainly relating to disciplinary actions and other process improvement actions. To support management, tracking and recording of these action items, Compliance developed a Power App‑based system which effectively enhanced monitoring and closure of actions items.
In 2023, the Compliance Department launched motion graphic awareness videos for all employees regarding the whistleblowing, anti‑bribery and anti‑corruption, related party transactions, gift taking rules, avoiding conflict of interest, non‑harassment and non‑discrimination, and preventing market abuse.
A webinar on Whistleblowing framework was organised for all ACWA Power Group employees to build awareness on the whistleblowing framework currently operational in the Company. More than 500 employees attended the session, and their queries relating to confidentiality and retaliation were properly addressed. As additional initiative, Compliance rolled out a short video in two languages (English and Arabic) that helped creating further awareness on the whistleblowing framework. A survey, carried out soon after this training session, confirmed that around 90% of employees were aware of the process and channels for reporting whistleblow cases.
Grievance procedures
Grievance means any type of dissatisfaction or discontent arising out of factors related to an employee’s job which he/she thinks is unfair. A grievance is a sign of an employee’s discontentment with his/her job or relationship with his/her colleagues. Grievances generally arise out of the day‑to‑day working relations in an organisation. Any internal or external stakeholder (employees, contractors, vendors, etc.) is able to file a formal grievance, in confidence, via the Company website.
To ensure ease of reporting and proper management, the organisation has categorised grievances to ensure timely and relevant action. Any filings are then assessed by a committee (People Committee) comprising of individuals with appropriate experience and no prior involvement in the complaint. Once the investigation is completed and an outcome has been decided, a member of the People and Culture team will arrange a meeting with the complainant and the subject of the complaint to discuss the outcome and next course of action, if any. All actions taken as part of the process will be in line with the organisation’s HR policy and local regulations.
Conflict of interest
The Compliance Department is responsible for managing the conflict‑of‑interest programme in place at ACWA Power in accordance with the provisions set out in the Conflict of Interest Policy and Procedure. In 2023, the ACWA Power Compliance Department has put in place a thorough process for identifying, disclosing and governing business dealings between the Company and its related parties thus ensuring correct implementation and compliance with the applicable regulations and the Company’s Related Party Transactions and Conflict of Interest Policy (RPT&COI Policy). The final revision and approval from the General Assembly of the Company’s RPT&COI Policy amendment is expected to occur in 2024.
In the year 2023, a total of 134 cases of conflict of interest were reported to the Compliance Department. The department performed a proper assessment on the received cases, including:
Evaluation of the nature of the conflict, specifically focusing on instances such as relative hiring.
- Clarifications from the employees involved.
- Examination of the cases of conflict of interest.
- Determination of a recommended course of action.
In 2023, the Compliance Department organised a webinar on Conflict of Interest for all ACWA Power Group employees to build awareness on the conflict‑of‑interest framework currently operational in the Company. It highlighted conflict of interest definition, type of conflict of interest, avoiding conflict of interest, conflict of interest disclosure, manage/resolve conflict of interest and the impact of having a conflict of interest. More than 300 employees attended the session.
Our commitment to human rights
ACWA Power places great emphasis on treating employees and individuals in the communities in which we operate and throughout our supply chain with dignity and respect. Where we don’t have managerial control, we expect and require compliance with this policy. We regularly review and update our policies and procedures proactively to identify, address and respond to unfavourable human rights issues with which we are possibly involved.
We are dedicated to complying with the pertinent laws and implement controls wherever we operate. Where national law and international human rights standards differ, we adopt the higher standard.
Among the broader human rights issues identified, we consider the following as crucial and non‑negotiable:
- providing access to grievance mechanisms;
- supporting access to water and sanitation;
- any form of child labour, modern slavery, forced labour and human trafficking in any part of its business and supply chain;
- ensuring a decent living wage and income;
- ensuring safety and health; and
- empowering and supporting women.
Anti‑discrimination and anti‑harassment
ACWA Power has a Code of Conduct and Ethics Policy regarding discrimination and harassment:
The key principles of anti‑discrimination and anti‑harassment are:
- We strictly prohibit employees from making malicious accusations against any employee of the organisation.
- We require staff to behave respectfully with other team members, and not purposefully, falsely, or maliciously attempt to injure the reputation of another team member.
- We do not accept abusive conduct, including verbal abuse and physical conduct that another person would find threatening or humiliating.
- We encourage staff to speak up to report harassment without fear of retaliation.
- The Сompany’s management is responsible for ensuring a culture of accepting grievances without prejudice and providing a safe and impartial procedure to complete the relevant investigation of each grievance.
- We have set up a Whistleblowing Procedure that any one of its employees can use to report a breach of the rules set out in the Code of Conduct and Ethics Policy.
Our disclosure and transparency approach
ACWA Power’s commitment to transparency is long‑standing and weaved into our fabric. Since our listing on the Kingdom’s main stock exchange, Tadawul, in 2021, we must also comply with Capital Market Authority laws and regulations.
We have implemented a disclosure and transparency mechanism to identify, assess and, if needed, disclose to the public, any material development originating as part of our business that might affect the Company’s financial position, its ESG rating or evaluation.
This is in compliance with the specific provisions set out in the Rules on the Offer of Securities and Continuing Obligation.
ACWA Power developed and rolled out a disclosure and transparency (DT) mechanism, inclusive of a DT Policy, a DT Procedure and a DT Committee. The DT Committee is a working committee whose mission is to provides a structured and systematic oversight on the organisation’s wide implementation of the DT mechanism in pursuing the DT regulatory obligations. It is chaired by the Company’s CFO and composed by representatives of key enabling functions such as Compliance, Legal, Finance, Investor Relations, Communication and Marketing and Business Development.
During the course of 2023 Compliance brought to the attention of the DT Committee for assessment a total of 293 events submitted through the DT portal, of which 42 were deemed material and announced on Tadawul.