Corporate Governance Of Listed Companies In Kuwait A Comparative Study With United Kingdom Saudi And Qatar Codes Link Fixed Direct
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.
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) The research on corporate governance of listed companies
Navigating Governance: A Comparative Study of Kuwait’s Corporate Code
Corporate governance has evolved from a "check-the-box" exercise into a strategic necessity for listed companies. In Capital Markets Authority (CMA)
has established a robust framework designed to enhance transparency and protect shareholder rights. However, how does Kuwait’s approach stack up against global benchmarks like the UK or regional neighbors like Saudi Arabia and Qatar? The Kuwaiti Landscape: Foundation and Pillars
The Kuwaiti Corporate Governance Code (CGC) is built on eleven foundational pillars, emphasizing accountability, fairness, and the protection of stakeholders. Board Composition
: Listed companies must have a minimum of five board members (banks require 11). Independence
: The majority of board members must be non-executive, with at least one independent director required. Restrictions No mandatory gender diversity target on boards (UK:
: A person cannot chair more than one public shareholding company in Kuwait or serve on more than five boards locally. Shareholder Rights
: Investors owning 5% can add items to meeting agendas, and those with 25% can request the removal of board members. Comparative Benchmarks: UK, Saudi Arabia, and Qatar UK Corporate Governance Code 2024
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 Kuwait: Law No
: 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
Objective
To assess Kuwait’s corporate governance framework for listed companies against the UK (as a mature common‑law model) and two regional peers (Saudi Arabia & Qatar), identifying gaps, strengths, and actionable improvements.
2. Kuwait’s Gaps vs. UK
- No mandatory gender diversity target on boards (UK: 40% for FTSE 350).
- No binding shareholder vote on remuneration (UK: binding policy vote every 3 years).
- No stewardship code for institutional investors (UK: Stewardship Code since 2010).
- Limited risk management detail – no equivalent to UK’s ‘viability statement’.
- No ESG disclosure mandate – Kuwait lags behind global norms.
Kuwait: Law No. 7 of 2010 and CMA Law No. 7 of 2010 (Updated)
Kuwait’s governance regime is primarily governed by the Capital Markets Authority (CMA) Law No. 7 of 2010 and its subsequent Executive Bylaws (Modules Fifteen). Historically, Kuwaiti governance was weak, characterized by "close-held" family firms. The introduction of Module Fifteen (Corporate Governance) mandated specific rules for listed companies, including separation of CEO and Chairman roles (unlike the UK’s flexibility) and the establishment of nomination and remuneration committees.