Corporate Governance Of Listed Companies In Kuwait A Comparative Study With United Kingdom Saudi And Qatar Codes Link
Institutional investors in Kuwait (NBK, KFH) are passive. By adopting the UK’s 2019 Stewardship Code, Kuwait could force asset managers to engage with family firms, reducing the "principal-principal" conflict.
The corporate governance of listed companies in primarily governed by Capital Markets Authority (CMA) Executive Bylaws
. Kuwaiti regulations have evolved from a strictly binding approach in 2013 to a "comply or explain"
model introduced in 2015. This shift aligns Kuwait with international standards, particularly the UK Corporate Governance Code
, though regional characteristics such as high ownership concentration continue to influence local practice. GCC Board Directors Institute Comparative Overview of Governance Codes
What does Voluntary Delisting Tell us about Corporate ... - Brill
The research on corporate governance of listed companies in , specifically in comparative studies with the United Kingdom Saudi Arabia
, highlights several helpful features and findings regarding the evolution of regional regulatory frameworks. Key Comparative Features
The "Comply or Explain" Hybrid Approach: Kuwait’s Corporate Governance Code (KCCG 2015), which is Module 15 of the Capital Market Authority's Executive Bylaws, adopted a mixed approach. This was inspired by the UK Corporate Governance Code, allowing flexibility rather than a strictly binding mandate. Institutional investors in Kuwait (NBK, KFH) are passive
Board Structure and Size: Listed companies in Kuwait must have a minimum of 5 board members, while banks require at least 11. Studies indicate that board sizes smaller than nine members are generally more effective for firm performance in the GCC.
Separation of Roles: A universal feature across the GCC (Kuwait, Saudi Arabia, and Qatar) is the mandatory separation of the CEO and Chairman roles. In Qatar, the Chairman is further restricted from holding executive positions or sitting on board committees.
Regulatory Flexibility: Saudi Arabia's Companies Law is noted for its higher flexibility compared to Kuwait, allowing for single-shareholder companies and streamlined electronic incorporation, whereas Kuwait emphasizes collective formation and physical meetings.
Performance Drivers: Governance characteristics such as board diversity, independence, and the presence of royal family members on boards have been shown to positively impact firm performance and reduce agency conflicts in the GCC. Summary of Governance Maturity (Ranking)
This study compares the corporate governance frameworks of listed companies against the codes of the United Kingdom Saudi Arabia
. While all four jurisdictions aim to align with international standards like the OECD Principles of Corporate Governance
, they differ in regulatory approach, mandatory requirements, and cultural underpinnings. : The Multi-Pillar Framework
Kuwait’s corporate governance is primarily regulated by the Capital Markets Authority (CMA) Law , specifically Pillars of Governance High transparency
: Kuwait defines 11 pillars, including the protection of stakeholders' and shareholders' rights, risk management, and corporate social responsibility (CSR). Board Structure
: Listed companies must have a minimum of five board members (11 for banks). A majority must be non-executive, with at least one independent member required. Key Restrictions
: A chairman cannot lead more than one public shareholding company in Kuwait and is limited to five total board memberships. Regulatory Style : Operates on a "Comply or Explain"
basis for certain provisions, though the CMA ensures strict adherence across listed and licensed entities. 2. Comparative Analysis: Saudi Arabia United Kingdom Saudi Arabia (KSA) Primary Code CMA Module 15 UK Corporate Governance Code CMA Corporate Governance Regulations Governance Code for Listed Companies (2025) Philosophy Mixed (Mandatory + Comply or Explain) Principles-based ("Comply or Explain") Primarily Mandatory / Rules-based Mandatory (Main Market) Board Composition Min. 5 members; Majority non-exec Min. half board independent (excl. Chair) Mandatory independent director minimums 7–11 members; Min. 3 independent Chair/CEO Split Encouraged CSR-based (Comply or Explain) Integrated into reporting Emerging (disclosed by 94 firms in 2024) Mandatory ESG performance disclosure United Kingdom: The Principles-Based Pioneer UK Corporate Governance Code is the global benchmark for the "Comply or Explain"
model. Unlike the more rigid rules in the GCC, the UK focuses on high-level principles that allow companies flexibility, provided they transparently explain any deviations to shareholders. Saudi Arabia: Strict & Mandatory Saudi Arabia ’s framework, updated in 2023, is notably more than Kuwait's or the UK's. 2025 Kuwait Market IQ - ISS Insights
This guide outlines the corporate governance landscape for listed companies in
, providing a comparative perspective against the established codes of the United Kingdom Saudi Arabia 1. Kuwait Corporate Governance Framework
The governance of listed companies in Kuwait is primarily regulated by the Capital Markets Authority (CMA) Law and its executive bylaws. 20% by 2028) | UK
Key Regulation: Module 15 of the CMA Executive Bylaws serves as the central Corporate Governance Code.
Regulatory Approach: Kuwait utilizes a "comply or explain" framework for certain provisions, requiring companies to either follow the rules or disclose reasons for non-compliance in their annual reports.
Board Structure: Listed companies must have a board of at least 5 members.
Core Objectives: The code focuses on balanced board responsibilities, integrity in financial reporting, robust risk management, and the protection of shareholder rights.
2. Comparative Study: Kuwait vs. UK, Saudi Arabia, and Qatar UK Corporate Governance Code 2024
* UK Corporate Governance Code 2024. UK Corporate Governance Code 2024. Name. UK Corporate Governance Code 2024. Publication date. Financial Reporting Council Overview of the UK Corporate Governance Code 2024 - Ashurst
Book Review: Corporate Governance of Listed Companies in Kuwait: A Comparative Study with United Kingdom, Saudi and Qatar Codes
Author: [Author Name typically found on the cover, often Dr. Sulaiman Al-Abduljader or similar academic titles in this field] Publisher: [Publisher Name, e.g., Kluwer Law International / Palgrave Macmillan / Local Academic Press]
High transparency. Quarterly reports required. Insufficient disclosure leads to FRC investigations and public reprimands.
| Recommendation | Derived from | |----------------|----------------| | Introduce binding shareholder vote on remuneration policy | UK | | Mandate board gender diversity target (e.g., 20% by 2028) | UK, global trend | | Require annual board evaluation (internal or external) | Qatar, UK | | Adopt stewardship code for asset managers | UK | | Mandate climate‑related financial disclosures (TCFD-aligned) | UK, soon KSA | | Strengthen RPT approval – independent director sign‑off | UK, KSA | | Publish enforcement track record annually (CMA) | UK (FRC reviews), Saudi CMA |