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A Director Appointment Agreement formalizes the selection and duties of a company director under Saudi Arabia's Companies Law. This binding contract spells out key terms like compensation, responsibilities, and duration of service, protecting both the company and the incoming director.

The agreement must align with Saudi corporate governance rules and Shariah principles. It typically includes confidentiality obligations, performance expectations, and board meeting requirements. Companies listed on Tadawul (Saudi Stock Exchange) need to file these agreements and disclose material terms to meet transparency standards set by the Capital Market Authority.

Use a Director Appointment Agreement when bringing new directors onto your Saudi company's board, especially during major corporate changes like expansions, mergers, or leadership transitions. This agreement becomes essential before the director begins their duties and needs filing with the Ministry of Commerce.

Critical timing includes pre-IPO preparations, when adding independent directors to meet CMA requirements, or during corporate restructuring. The agreement protects your company by clearly defining roles upfront, particularly for family businesses transitioning to professional management or companies expanding their board to meet governance requirements.

• Executive Director Agreements: Detailed terms for full-time directors handling day-to-day operations, including performance metrics and executive compensation
• Non-Executive Director Agreements: Focus on oversight duties, meeting attendance, and committee responsibilities with lighter time commitments
• Independent Director Agreements: Enhanced independence provisions meeting CMA requirements for listed companies, with specific conflict-of-interest clauses
• Family Business Director Agreements: Special provisions balancing family interests with professional governance requirements under Saudi law
• Subsidiary Board Agreements: Modified terms for directors serving on boards of subsidiary companies within larger corporate groups

• Board of Directors: Reviews and approves the final agreement terms, ensuring alignment with company strategy and governance needs
• Company Secretary: Prepares the Director Appointment Agreement and handles required regulatory filings with Saudi authorities
• Legal Counsel: Drafts and reviews agreement terms to ensure compliance with Companies Law and CMA regulations
• Incoming Director: Reviews, negotiates, and signs the agreement, becoming bound by its terms and responsibilities
• Shareholders: May need to approve director appointments in certain cases, particularly for major corporate changes

• Director Details: Gather full legal name, ID/passport details, and qualifications as required by Saudi regulators
• Company Information: Compile commercial registration details, board composition, and existing governance structure
• Role Specifics: Define exact position, committee assignments, and scope of authority
• Compensation Package: Document agreed salary, benefits, meeting fees, and any performance-based incentives
• Term Duration: Specify appointment period, renewal conditions, and termination provisions
• Compliance Review: Check alignment with company bylaws and CMA requirements before finalizing

• Party Details: Full legal names, registration numbers, and authorized signatories of both company and director
• Appointment Terms: Position title, duties, and board committee assignments under Saudi Companies Law
• Compensation Structure: Detailed breakdown of fees, allowances, and benefits following CMA guidelines
• Confidentiality Provisions: Specific obligations regarding company information and trade secrets
• Conflict Re����ֱ��: Dispute re����ֱ�� mechanisms aligned with Saudi judicial requirements
• Sharia Compliance: Statement confirming adherence to Islamic principles in governance matters
• Termination Clauses: Clear conditions for ending the appointment and post-termination obligations

A Director Appointment Agreement differs significantly from a Director Services Agreement in several key aspects, though both relate to board governance in Saudi Arabia. While the appointment agreement establishes the formal position and basic terms of directorship, the services agreement details specific duties and operational responsibilities.

• Scope and Purpose: Appointment agreements focus on board membership status, voting rights, and compliance with Companies Law, while services agreements outline detailed day-to-day responsibilities and deliverables
• Legal Requirements: Appointment agreements must be filed with regulatory authorities and meet CMA governance standards, whereas services agreements are internal operational documents
• Duration and Flexibility: Appointment terms typically align with board tenure periods, while services agreements can be more flexible and project-specific
• Compensation Structure: Appointment agreements cover basic board remuneration, while services agreements may include performance metrics and additional consulting fees