Transparency Award 2008 - Evaluation Criteria

Evaluation Criteria:


  • To shed more color as to how this award was structured and based on select criteria and a well established methodology developed by BMG, we conducted and concluded a multiple stage screening process to come up with you finalists that have proven to be the most transparent on the Saudi Stock Exchange “Tadawul”.
  • The process started with 111 companies which represented a snapshot of the shares listed on Tadawul as of a specific date in January 2008. The 5 screening stages can be summed up as follows:
  • The first screening stage was based on the period of listing, companies needed a track record of 1 year to be considered for this year’s award, with that said, companies listed after 1/1/2006 were eliminated. The reason we chose 2006 as our base is because most 2007 annual reports would not have been available in time to complete the exercise.
  • The second screening stage was based on the companies’ websites; whether they had a designated individual within the company to handle Investor Relations who was readily available to respond to investors and financial intermediaries. An equally weighted 5 point grid was used to perform this exercise. Companies that didn’t have websites or scored poorly on this exercise were eliminated.
  • The third screening stage was based on quarterly reporting and accompanying notes to the financials as on the company websites.
  • The fourth screening stage addressed the qualitative aspect, and was based on company pro-activeness, examples of measures used for this exercise include, whether management of the company actively encourages being reached and helps with provision of information useful to the publication of research on the company, and the ease of access of senior management to financial intermediaries and key existing and potential shareholders. For this, we contacted the companies to establish contact with the Investor Relations Representative furnished on the Tadawul website. We found that in general, the companies’ investor relations representative was not easily accessible, and thus eliminated companies that fell into that group.
  • The fifth and final screening stage looked at the level, timeliness and quality of information from the company. Annual reports for the year 2006 were used as the benchmark for this exercise. Companies that had basic annual reports limited to financial information scored less than more extensive reports that detail company strategy for example.
  • Another aspect we also looked at was Research Coverage. We were so proud to see that our top 11 winners have research reports that have been written on them. We therefore believe in you setting the standards for the rest of the market, and encouraging companies that are not covered to seek and strive for coverage.

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