Corporate Governance Consulting Services

Corporate governance is a set of rules through which a business entity is directed and controlled. It encompasses mechanisms governing different relationships between the board of directors, the executive management, shareholders and other stakeholders through establishing specific procedures to facilitate the decision-making process with emphasis on transparency and credibility in order to protect the rights of shareholders and other stakeholders and attain fairness and competitiveness in the marketplace and business environment.

What is Corporate Governance Consulting?

Certain business entities seek to engage the services of a consulting firm to obtain corporate governance consulting. These are specialist services intended to assist business entities in developing and implementing effective corporate governance frameworks and policies with view to enhancing transparency, accountability and sustainability as well as ensuring compliance with regulatory rules and criteria and best practices in the management of businesses.

What are the key regulatory authorities in the State of Kuwait?

1. Central Bank of Kuwait: It supervises banks, financing companies, exchange companies, credit information companies and electronic payment business.
2. Capital Markets Authority: It supervises listed companies and companies licensed to carry on securities business.
3. Insurance Regulatory Unit: It supervises insurance companies, reinsurance companies, brokerage companies for insurance and reinsurance, and insurance related professions.

What are the corporate governance rules issued by the key regulatory authorities in the State of Kuwait to be implemented by the supervised entities?

1. Corporate Governance Instructions issued by Central Bank of Kuwait:

   The Central Bank of Kuwait issued Instruction No. (2/BS/ IBS/284/2012) dated 20 June 2012 to all Kuwaiti Banks regarding the Corporate Governance Rules and Systems in Kuwaiti Banks, as amended by Circular No. (2, BS, IBS/446/2019) dated 15 September 2019 to all Kuwaiti Banks regarding Updating the Corporate Governance Rules and Systems in Kuwaiti Banks, which include the corporate governance rules and requirements to be implemented by banks and financial institutions.

2. Corporate Governance Instructions issued by Capital Markets Authority:

   The Capital Markets Authority issued Resolution No. 72 of 2015 dated 09 November 2015 regarding the Issuance of the Executive Bylaws of Law No. 7 of 2010 concerning the Establishment of Capital Markets Authority and Regulating Securities Activities, Module 15 “Corporate Governance”, which includes the corporate governance rules and requirements to be implemented by listed companies and CMA-licensed companies.

3. Corporate Governance Instructions issued by Insurance Regulatory Unit:

   The Insurance Regulatory Unit issued Resolution No. 58 of 2023 dated 06 November 2023 regarding the Issuance of the Corporate Governance Rules, which includes the corporate governance rules and requirements to be implemented by insurance and reinsurance companies.

What are the requirements of Corporate Governance?

The corporate governance requirements include creating organizational structure that encompasses organizational units entrusted with undertaking control activities in addition to documenting the processes, policies and procedures manuals for the organizational structure units to ensure efficiency and effectiveness of the operations. It is imperative to employ specialist job incumbents as per the requirements of regulatory authorities, in addition to a set of reports including those internally developed or prepared by an external consulting firm such as Sustainability Report on Environmental, Social and Governance (ESG) and the Integrated Report. Overall, the foregoing requirements achieve the principles of transparency, fairness, responsibility and accountability.

What are the organizational units in focus of Corporate Governance rules within business entities?

The board of directors, board committees, i.e., nomination and remuneration committee, risk committee and audit committee, and the executive management. The corporate governance rules emphasize the process of board formation and its responsibilities within a business entity. With respect to board committees, the corporate governance instructions state the formation criteria and functions that they will follow up.

What are the activities that the board committees should follow up?

The external audit, internal audit and risk management in addition to reviewing and assessing the internal controls and ensuring compliance with the requirements of anti-money laundering and combating the financing of terrorism.

What is the added value to business entities from Corporate Governance Consulting Services?

1. Ensure that regulatory compliance is achieved including compliance with laws, regulations, resolutions, rules, and instructions issued by the regulators;
2. Ensure compliance with the up-to-date international standards and practices, which are relevant to the entity’s business activities;
3. Promote the stakeholders’ confidence in the business entities and enhance its reputation in the marketplace where it operates; and
4. Utilize the expert knowledge and experiences brought through compliance consulting services.

What are the services offered by Baker Tilly Kuwait?

1. Preparing the strategy and business plans
2. Preparing the organizational structure as per the regulators’ requirements
3. Preparing the organizational competencies manuals for the organizational structure
4. Preparing the job structure
5. Preparing the job description
6. Preparing processes, policies and procedures manuals
7. Preparing the delegation of authority matrix
8. Preparing templates of periodic internal reports and the reports presented to the regulators
9. Preparing Sustainability Report on Environmental, Social and Governance (ESG)
10. Preparing the Integrated Report