Regulatory Governance

Regulatory governance rules apply to all entities, whether implemented voluntarily or mandatorily.

Regarding the mandatory application of regulator governance rules, regulators in the State of Kuwait, i.e,. The Central Bank of Kuwait (CBK). Capital Markets Authority (CMA), and Insurance Regulatory Unit (IRU), have issued corporate governance rules and mandated their supervised entities to implement them.

With respect to the governmental entities, the General Secretariat of the Supreme Council for Planning and Development issued the “National Guide for Corporate Governance in the Administrative Apparatus”, which provides guidelines for implementing the governance principles in ministries and other government bodies.

What is the regulatory governance?

Regulatory governance is the organizational framework of a business entity that ensures sound and prudent management is effectively and transparently, ensuring a balance between the stakeholders’ interests.

What Are the Regulatory Governance Frameworks in the State of Kuwait?

Regulatory governance frameworks refer to the set of rules issued by supervisory and regulatory authorities to establish oversight and organizational structures for entities under their jurisdiction. These frameworks are outlined as follows:

1. Corporate Governance Regulations issued by the 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 Regulations issued by the 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 Regulations issued by the 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.

4. Corporate Governance Regulations in the State Administrative Apparatus:

   In 2021, the General Secretariat of the Supreme Council for Planning and Development issued the “National Guide for Corporate Governance in the Administrative Apparatus”, which provides the employees of the government sector with a well-structured approach to implementing the corporate governance principles in different governmental bodies, e.g., ministries, government administrations, authorities, institutions, and independent agencies with dependent budgets.

5. Corporate Governance Rules Issued by the Ministry of Social Affairs and Labor, Mandatory for Charitable Associations

   On 29 June 2025, the Ministry of Social Affairs and Labor issued a set of regulatory controls governing charitable work in the State of Kuwait, which obligate charitable associations to adhere to a range of requirements aimed at enhancing corporate governance in the management of their operations. These include, but are not limited to, the presence of a documented organizational structure with defined organizational authorities that clarify responsibilities, enable accountability, activate independent financial auditing of financial statements, activate internal audit functions, and implement risk management practices. The Ministry also mandated the creation of a Compliance Officer role to ensure that charitable associations adhere to the regulations of the Ministry of Social Affairs and Labor.

Regulatory governance rules require establishing a set of systems, including the following:

• Developing an organizational structure
• Developing a job structure
• Developing job description cards
• Developing processes, policies, and procedures manuals
• Developing an administrative and financial authority matrix
• Developing charters binding the organizational units

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?

Baker Tilly provides the following services:

• Preparing organizational structures according to the regulators’ requirements
• Preparing job structures according to the regulators’ requirements
• Preparing job description cards
• Preparing processes, policies, and procedures manuals
• Preparing the administrative and financial authority matrix
• Preparing charters binding on the organizational units
• Preparing the integrated report as per the CMA’s requirements

Why Baker Tilly Kuwait?

1. Baker Tilly in Kuwait is a member of the Baker Tilly International network based in the UK, ranked amongst the top 10 global accounting networks.
2. Extensive experience in providing Regulatory Governance Consulting Services to companies operating across various business sectors in the State of Kuwait.
3. Highly experienced bilingual team with specialized academic qualifications and professional certifications.
4. Commitment to performing Regulatory Governance Consulting Services engagements according to predefined timelines with no delays, and responsiveness to client requirements.