Corporate governance practice in the GCC: Kuwait as a case study

Abstract

Corporate governance practice has recently become an important topic around the world and specifically within the emerging stock markets in order to avoid expropriation by corporate management at the expense of minority shareholders. Although corporate governance is considered to be tremendously important in many countries, whether developed or developing, corporate governance does not exist in Kuwait as a mean of shareholder protection. This thesis intends to provide a regulatory analysis to laws and regulations that should be implemented to regulate corporate governance practice in Kuwait in private companies and in the State-Owned Enterprises. The second chapter draws a theoretical framework of corporate governance. These theories must be discussed, because this thesis is the first to address corporate governance from a legal perspective and will help Kuwaiti practitioners and those involved in corporate governance practice to gain a better and more comprehensive understanding of and appreciation for effective corporate governance. The third chapter provides an overview of the corporate governance practice in the emerging markets. The fourth chapter presents the characteristics of a corporate culture to lay the groundwork for adopting corporate governance that will fit within the Kuwaiti culture. The fifth chapter offers an assessment of the institutional settings necessary to establish a sound corporate governance system in Kuwait, including legal and political institutions. The sixth chapter will examine corporate governance practice in the State-Owned Enterprises in Kuwait. The seventh chapter focuses on the best practices of corporate governance and the protection of shareholders in companies listed in the Kuwait Stock Exchange (KSE) by analysing the regulations and laws that apply to the KSE and that should relate to corporate governance. Chapter eight offers recommendations for corporate governance reform that derive from the assessment made in this thesis in both public and private sectors in Kuwait. Finally, chapter nine provides the general conclusion of the thesis and the contribution of this study.