What are key duties of PIF’s corporate governance department?

The Public Investment Fund (PIF) is a key driver of economic diversification in Saudi Arabia, and consistently strives to enhance its position as an efficient investor and global partner. PIF investments also generate lucrative returns over the long term.

As part of its role as a global investment powerhouse, PIF has set a list of objectives regarding the governance of its operations, notably improving the corporate governance (CG) within its portfolio companies and monitoring their performance. This helps boost the firms’ growth rates, aggrandize PIF’s assets and enhance its role as an active investor.

PIF maintains a governance and operating model that reflects its mandate and objectives, based on international best practice. This model ensures transparency and efficiency in the decision-making process as well as the ability to evolve in the future.

PIF’s Corporate Governance responsibilities vary across the organizations work. Key responsibilities include evaluating the governance structure and practices of PIF’s portfolio companies, working closely with the boards of directors and executive management to enhance governance frameworks and performance.

The department also provides advisory services for all its portfolio companies on governance-related issues and practices.

Moreover, the department’s duties include protecting PIF’s interest as an investor through exercising its rights in line with local and global market regulations, as well as individual company bylaws. PIF also helps manage communications with the regulatory and supervisory authorities in the Kingdom and abroad to safeguard PIF’s interest and reputation.

One method utilized by the Corporate Governance department to maximize performance focuses on strengthening the role of board members appointed as PIF representatives to portfolio company boards. The Fund highlights the significant role its representatives play in improving company performance, protecting PIF interests and exercise its rights as a shareholder.

PIF has a strict set of criteria for board members selection, choosing from a carefully vetted list that includes over 500 experts in various investment fields, followed by an evaluation of corporate need.

PIF develops specialized programs for its representatives and the relevant company. It also monitors performance and equips the board members with required support tools.

PIF has also made great efforts to increase the number of representatives present on portfolio company boards.

Those representatives benefit from the Corporate Governance department’s advisory services and support to apply international best practices in governance.

The department nominates Saudi candidates for these positions, particularly for the Saudi equity portfolio companies, thanks to their extensive experience in the geographical location, local market and variables in the sector under which the company operates.

The department also nominates international experts in specific areas where global expertise is required.

PIF has also developed a center to develop and educate board members, managers and executives of portfolio companies. The new facility will gather all board members, whether or not they serve as representatives of the fund. Specialized centers will also provide integrated training programs in line with the best international practices.