In Jerusalem Pharmaceuticals, we believe that good corporate governance is fundamental to our business. JePharm was one of the leading public listed companies in the Palestine stock exchange that has observed the principles of governance in its work towards achieving sustainability and development; as well as protecting and managing shareholders’ and other beneficiaries’ interests.

In November 2009, Jerusalem Pharmaceuticals adopted the "Code of Corporate Governance in Palestine" that was issued by the National Committee for Governance as a directive guide for the establishment of good governance. Its efforts culminated in the adoption of its first Code of Corporate Governance in 2013, which was revised in 2014. The Code regulates the relationship between the Board of Directors, Executive Management and Shareholders. In 2013, the Board of Directors established a number of committees with the aim to ensure the implementation of corporate governance principles and regulations. The four committees are Compliance & Risk Management Committee; Corporate Governance and Remuneration Committee; Finance and Strategy Committee; and Products Committee.

In 2016 and 2017, the Board of Directors continued its efforts to strengthen the governance culture among the Board Members, the Executive Management and all the company employees by keeping abreast of recent developments and communicating with specialized consultancy and training institutions in this field.

Jerusalem Pharmaceuticals has adopted the corporate governance principles set forth below as a framework for the governance of the company. The principles are reviewed annually and changes are recommended to the Board of Directors as appropriate. The principles are:

1. Accountability to shareholders
2. Transparency and disclosure
3. Responsibility for the powers and authorities it exercises

Jerusalem Pharmaceuticals Board of Directors consists of 11 members who are elected by shareholders to direct and oversee management efforts towards the realization of the company's strategic goals. These goals ultimately serve shareholders interests, while observing company mission and values. The Board shall bear overall accountability for the performance of Jerusalem Pharmaceuticals.

The Board of Directors' key responsibilities are to ensure that the company will meeting the interests of its shareholders as well as its stakeholders. In addition to strategic planning and oversight and monitoring of business and financial plans of the executive management, the Board deals with issues relating to corporate governance, compliance and internal controls, risk assessment and social responsibility.

The Committee supervises and audits the company's financial, administrative and technical activities; and identifies internal and external business environment risks. Supervision involves several responsibilities which include to:

• Ensure the adequacy and completeness of the internal audit work by reviewing the effectiveness of risk management arrangements
• Ensure the full responsiveness of the identified and tracked issues, particularly though the implementation of internal and external audit and ensuring independence
• Examine the technical departments’’ full compliance by looking into the internal audit reports of the quality assurance department
• Review the reports of fact-finding committees that are appointed to look into cases of fraud, corruption, conflict of interest, and embezzlement among others
• Measure & Evaluate the level of effectiveness of JePharm internal audit and control systems

Direct the executive management's attention to any risks including operational risks, market risks or credit risks

The Committee is responsible for developing and supervising the implementation of governance rules and making comprehensive recommendations to the Board of Directors within the following main tasks:

• Prepares & maintains governance guidelines of the board of directors and the executive management
• Reviews and approves all administrative, financial and technical policies and regulations governing business
• Reviews the organizational structures and the jobs description manual for all departments and considers newly created roles
• Develops compensation and benefits policy for the Board of Directors and reviews them annually
• Develops compensation and benefits policy for the executive management in alignment with the company performance
• Reviews the amendments of the salary structure
• Reviews performance evaluations of annual salary increase, bonuses and promotions
• Approves the appointment of senior executive managers and granted benefits

The Committee focuses on the strategic and financial planning in the short and long terms; and proffers its recommendations to the Board of Directors as follows:

• Prepares the strategic plan for Board consideration
• Reviews feasibility studies for projects and studies related to external partnerships
• Reviews financial data, reports and analyses
• Studies the proposed annual budgets
• Reviews the cash flows and the financial policy

The Committee is responsible for reviewing Jerusalem Pharmaceuticals portfolio of human medicines and veterinary and agricultural products in all of its facilities and partnerships for local and export markets and performs the following tasks:

• Formulates in collaboration with executive management the product development and registration plans for new and existing products and submits plans for Board of Directors’ consideration. It also monitors and evaluates the implementation of these plans
• Studies the renewal of existing products registration, and/or propose their development or elimination
• Offers recommendations to the Board of Directors with regard to strategic directions in research and development, new products lines and lines upgrades