Kuwait has made significant progress in corporate governance, aligning with its broader goals of attracting foreign investments, diversifying the economy, and increasing transparency. A key milestone in this effort is the enhancement of environmental, social, and governance (ESG) reporting. Kuwaiti-listed companies now have the option to voluntarily publish annual sustainability reports, a move that supports Kuwait Vision 2035 and reflects the country’s commitment to responsible business practices.
Kuwait’s corporate governance framework includes several measures to strengthen shareholder rights and board accountability. Shareholders can attend and vote in meetings using modern technologies, ensuring greater participation. Those with at least 5% ownership have the right to add agenda items at general meetings, promoting inclusivity in decision-making. To ensure balanced leadership, the majority of board members must be non-executive, with at least one independent member. Additionally, leadership roles are restricted, preventing individuals from chairing multiple companies. Shareholders holding at least 25% of a company’s capital can also call for the removal of board members, reinforcing accountability. Furthermore, related party transactions require independent risk units and expert reviews to prevent conflicts of interest. Kuwait has also taken steps to attract foreign investments, allowing up to 100% foreign ownership in specific sectors such as insurance and tourism.
Despite these advancements, certain aspects of Kuwait’s corporate governance structure still need refinement. One key challenge is the timing of financial disclosures, as most companies release financial statements ahead of their annual general meetings (AGMs) but delay governance reports until afterward. This limits transparency and timely access to crucial information for investors. Another issue is the lack of diversity criteria, particularly regarding gender representation on boards, leading to low female participation in corporate leadership.
Kuwait’s corporate governance framework has evolved significantly, creating a more transparent and investor-friendly business environment. However, increasing transparency in financial disclosures and improving board diversity would further strengthen governance practices and enhance Kuwait’s attractiveness as a global investment destination.
