Corporate Governance Reforms In Kuwaiti IFIs: A Comparative Study With Global Best Practices
Keywords:
Corporate, Shariah, Governance, IFIs, KuwaitAbstract
Globally, shariah-compliant finance has become more popular, with Kuwait acting as an important centre for Islamic financial institutions (IFIs). This study aims to investigate Kuwait's Shariah corporate governance reform, examining its distinctive features and contrasting them with international practices proposed by the Accounting and Auditing Organisation for Islamic Financial Institutions—Islamic Finance Standard-Setting Bodies (AAOIFI IFSB). This study uses comparative analysis to shed light on the unique aspects of the reformed Central Bank of Kuwait (CBK) Shariah corporate governance and compare it with the reformed AAOIFI IFSB Shariah corporate governance standards. The research examines the regulatory framework, roles, and duties of significant stakeholders, including the Board of Directors, Senior Management, Shariah Supervisory Boards, and Islamic Supervisory Auditors. The study also looks at Kuwait's difficulties in bringing its Shariah corporate governance up to par with international standards, including problems with concentrated ownership, passive shareholders, and the requirement for regulatory reforms. The results of the research indicate that there are many discrepancies in Shariah corporate governance practices between AAOIFI IFSB and CBK. Moreover, the results show that Kuwait suffers difficulties implementing international corporate governance norms for many reasons, such as centralised ownership by governmental agencies and wealthy individuals, as well as prohibitions on foreign ownership. This research intends to offer useful insights into the potential and challenges of Kuwait's road towards successful Shariah corporate governance reform by evaluating these dynamics and making comparisons with global best practices. In the end, the research will add to the continuing discussion on corporate governance in Islamic financial institutions, promoting transparency, accountability, and the long-term development of Kuwait's financial industry.
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