: Kuwait utilizes a "comply or explain" framework for certain provisions, requiring companies to either follow the rules or disclose reasons for non-compliance in their annual reports.
Kuwaiti listed companies are strictly governed by the CMA, which enforces a mandatory, rule-based approach rather than the "comply or explain" model found in many Western jurisdictions. The pillars of Kuwaiti governance, as highlighted by leaders in the sector, focus on board effectiveness, shareholder rights, and robust risk management.
Stricter definitions for independent board members. Risk Management: Mandatory, enhanced oversight functions. : Kuwait utilizes a "comply or explain" framework
Stakeholder Engagement: The UK has moved toward a "Section 172" approach, where directors must consider the interests of employees, suppliers, and the environment. Kuwaiti codes remain more focused on shareholder-centric protections.
The Code is applicable to all UK premium listed companies. The Financial Reporting Council (FRC) maintains the Code, which continues to uphold the flexibility of "comply or explain" reporting and seeks to deliver improvements that promote trust, transparency, and accountability in companies. Stricter definitions for independent board members
┌────────────────────────────────────────┐ │ BOARD OF DIRECTORS │ └───────────────────┬────────────────────┘ │ ┌──────────────────────┴──────────────────────┐ ▼ ▼ ┌─────────────────────────┐ ┌─────────────────────────┐ │ CHAIR │ │ CEO │ ├─────────────────────────┤ ├─────────────────────────┤ │ Leads the Board │ ≠ SEPARATED ≠ │ Manages Operations │ │ Non-Executive / Indep. │ │ Executive Director │ └─────────────────────────┘ └─────────────────────────┘
Kuwait has made progress in ESG, with listed companies now having the option to voluntarily publish annual sustainability reports, supporting Kuwait Vision 2035. However, mandatory ESG reporting is not yet required, though the CMA and Boursa Kuwait are set to significantly improve their ESG score with continuous initiatives. The UK Code's 2024 version removed specific references to diversity groups to allow greater flexibility, and ESG considerations feature in the updated guidance rather than the Code itself. Saudi Arabia has seen significant growth in sustainability disclosures, with 94 companies reporting in 2024. Qatar has taken the most decisive step, mandating ESG and sustainability reporting for all listed companies for the first time. supporting Kuwait Vision 2035. However
: Operates on a hybrid "comply or explain" basis, mandating strict adherence for listed entities while allowing flexibility in specific contexts. Board Structure
Disclaimer: This article is based on information available as of early June 2026 and should not be considered legal advice.
Independence: Saudi rules are often more prescriptive regarding what constitutes an "independent" director compared to Kuwait.