The Capital Markets Authority (CMA) issued a resolution setting the to be applied by the companies subject to CMA supervision.
The Capital Markets Authority in Kuwait has issued Resolution No. 5 of 2013 on 27 June 2013 setting the rules of corporate governance to be applied by the companies subject to CMA supervision. The Resolution has set 11 rules of corporate governance for the companies subject to CMA supervision, each of which consists of a set of principles.
The rules define the general concepts and frameworks of corporate governance to be followed by companies whereas the principles set the requirements and limitations for the application of the rules of governance.
Rule 1: Strengthen Board Composition
Rule 2: Establish Clear Roles and Responsibilities
Rule 3: Recruiting Highly Qualifies Candidates for Board of Directors and Senior Management
Rule 4: Safeguard Integrity in Financial Reporting
Rule 5: Sound Systems of Risk Management and Internal Controls
Rule 6: Promote Ethical Standards and Responsible Conduct.
Rule 7: Ensure Timely and High Quality Disclosure
Rule 8: Respect The Rights of the Shareholders
Rule 9: Recognize the Legitimate Interests of the Stakeholders
Rule 10: Encourage Enhanced Performance
Rule 11: Importance of Social Responsibility
The Resolution has stipulated that:
- These above rules must be applied by the subject companies on or before 31 December 2014.
- The subject companies must submit a quarterly report indicating the steps taken in the process of applying the above rules.
- The subject companies should take into account the immediate application of any principle or requirement stated in such rules with binding legislative status, whether it is in accordance with the Law and its Executive Regulations or with the Companies Law and its Executive Regulations.
Source: Al Qabas Newspaper, Page: 25, Dated: 21 August 2013
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