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The executive management was keen on developing a strategy that clearly reflects NCM’s vision, future trends, the tasks assigned to management and staff at all times. We are committed to maintain our customers and shareholder’s trust while earning the best reputation and credibility. This can only be achieved by exceeding our customers’ expectations.
Corporate Governance is a set of systems, organizational structures and systems determining the responsibilities of the board of Directors and Senior Management of a company to ensure the protection of the shareholders’ and relevant stakeholders’ rights (financiers, customers, management, employees, government, and the community).
CORPORATE GOVERNANCE AT NCM Investment
The CMA in 2015 has issued a set of instructions on corporate governance for local companies. CMA takes into account the structure of the Kuwaiti financial sector, the basic characteristics of the Kuwaiti economy and its integration with global economy as well as other factors that underline the critical importance of corporate governance at Kuwaiti companies. The instructions include the following:
1. Board of Directors
2. Corporate Values, Conflict of Interest and Group Structure
3. Senior Management
4. Risk Management & Internal Controls
5. Remuneration Policies and Procedures
6. Disclosure and Transparency
7. Complex Corporate Structure Pillar
8. Protection of Shareholders’ Rights Pillar
9. Protection of Stakeholders’ Rights
The following pages include a brief on each Pillar and the steps taken by NCM to implement the requirements under each Pillar in order to comply with the CMA instructions and promote good governance within NCM.
THE BOARD’S OVERALL RESPONSIBILITY
The Board has overall responsibility for the company, including
approving and overseeing the implementation of NCM investment’s strategic
objectives, risk strategy, corporate governance and corporate values. The Board
is also responsible for providing oversight of NCM’s senior management
including the CEO.
The Board assumes ultimate responsibility for NCM business and its financial soundness, fulfilment of CMA requirements, protecting the legitimate interests of shareholders, staff and stakeholders and ensuring that NCM is managed in a prudent manner and within the applicable laws and regulations and the internal policies and procedures.
BOARD COMPOSITION
NCM has an adequate number and appropriate composition of Board members to be in compliance with the governance requirements of the CMA.
BOARD CHAIRMAN
The Chairman ensures the proper functioning of the Board and maintains a
relationship of trust with the Board members. She/he ensures that Board
decisions are taken on a sound and well-informed basis through proper
discussion and dialogue. The Chairman establishes a constructive relationship
between the Board and the senior management of NCM Investment and ensures a
sound corporate governance standards are in place.
ORGANIZATION AND FUNCTIONING OF THE BOARD
The Board meets as often as it deems fit but at least 6 times a year
with at least 1 meeting in every quarter. The minutes of the meetings shall be
mandatory and constitute part of NCM’s records. The Chairman, in consultation
with the senior management, proposes the important and comprehensive topics to
be included in the agenda of each Board meeting and ensures that the Board
members are provided with sufficient information enough time before each Board
meeting so as to be able to make informed decisions. The Board Secretary takes
record of all Board discussions, suggestions by the Board members and results
of voting conducted in the Board sessions.
BOARD SECRETARY
The overall role of the Board Secretary is to assist the Board and its
Chairman in running Board affairs including but not limited to:
Ensuring timely development of Board agendas in conjunction with the
Chairman and CEO.
Co-coordinating, organizing and attending Board and shareholder
meetings.
Drafting and maintaining minutes of Board meetings.
Carrying out any instructions of the Board.
Ensuring compliance with all statutory requirements in relation to Board affairs.
RIGHTS OF THE BOARD MEMBERS
The board members have the right to receive all available information to
be discussed at a meeting, prior to that meeting. Moreover to be given adequate
time to consider and debate issues.
They also must have access to relevant and reliable information and be
entitled to obtain such resources and information from NCM, including direct
access to employees, as they may require.
Any Director or Committee of the Board may, with the prior approval of
the Chairman of the Board, seek their own independent legal or other
professional advice at NCM’s expense to assist them in the proper performance
of their duties.
DELEGATION OF AUTHORITY
The Board has delegated the task of running the day to day operations of
NCM to the senior management headed by the CEO through written / approved
delegated financial and operational authorities. NCM has clearly set out all
transactions that cannot be delegated to NCM’s management or the CEO and
require the Board’s approval.
QUALIFICATIONS OF BOARD MEMBERS
It is the aim of NCM to have qualified and experienced members on the
Board as well as the various Board Committees in order to serve the interests
of NCM and its various shareholders and stakeholders. The Board Nomination
& Remuneration Committee (NRC) assists the Board in the selection /
appointment of Directors for the Board and its Committees by setting the basic
criteria for such memberships. These are aimed at creating a Board capable of
challenging, stretching and motivating management to achieve sustained,
outstanding performance in all respects. Board members should be and remain
qualified, including through training, for their positions. They should have a
clear understanding of their role in corporate governance and be able to
exercise sound and objective judgment about the affairs of NCM.
CORPORATE GOVERNANCE AT NCM
The CMA in 2015 has issued a set of instructions on corporate governance
for local companies. CMA takes into account the structure of the Kuwaiti
financial sector, the basic characteristics of the Kuwaiti economy and its
integration with global economy as well as other factors that underline the
critical importance of corporate governance at Kuwaiti companies. The
instructions include the following:
Board of Directors
Corporate Values, Conflict of Interest and Group Structure
Senior Management
Risk Management & Internal Controls
Remuneration Policies and Procedures
Disclosure and Transparency
Complex Corporate Structure Pillar
Protection of Shareholders’ Rights Pillar
Protection of Stakeholders’ Rights
The following pages include a brief on each Pillar and the steps taken
by NCM to implement the requirements under each Pillar in order to comply with
the CMA instructions and promote good governance within NCM.
PRINCIPLES OF GOOD CORPORATE GOVERNANCE
Corporate Governance is a set of systems, organizational structures and operations that attain institutional control as per global standards and principles through determining the responsibilities and duties of the board of Directors and Senior Management of a company taking into account protection of shareholders and relevant stakeholders rights (financiers, customers, management, employees, government, and the community).
OUR VISION
The executive management was keen on developing a strategy that clearly
reflects NCM’s vision, future trends, the tasks assigned to management and
staff at all times. We are committed to maintain our customers and
shareholder’s trust as well as NCM’s market credibility. This can only be
achieved through our excellence in serving our customers and responding to
their expectations.
Senior management consists of a core group of experienced and qualified
individuals including the CEO and Executive Managers who are responsible and
held accountable for overseeing the day-to-day management of NCM Investment.
Under the direction of the Board, the senior management ensures that the
activities are consistent with the business strategy, risk appetite and
policies approved by the Board. The Board depends on the senior management’s
competency in implementing the Board’s resolutions / decisions without any
direct interference by the Board. Senior management contributes substantially
to a sound corporate governance through personal conduct and by providing
adequate oversight of those they manage. They are responsible for delegating
duties to the staff and its monitoring thereof and establishing a management
structure that promotes accountability and transparency.
Senior management is responsible for supervision and control over the
business, particularly with respect to ensuring compliance, risk control,
independence of functions and segregation of duties. They provide the Board
with periodic transparent and objective financial and administrative reports.
CHIEF EXECUTIVE OFFICER
The Chief Executive Officer (CEO) is responsible to the Board for the
overall management and performance of NCM.
The CEO manages NCM in accordance with the strategy, plans and policies
as approved by the Board. The CEO is responsible for:
• Delivering on NCM’s strategic and
operational plans as approved by the Board
• Referring transactions outside of
his/her delegated authority to the Board
• Ensuring that all actions comply
with NCM’s policies and with the laws
• All actions delegated to him/her by
the Board
• The CEO act within the authority
matrix approved by NCM’s Board if directors.
The performance of the CEO is to be reviewed by the Board on an annual
basis. The remuneration of the CEO is to be considered by the Nominations and
Remuneration Committee and a recommendation made to the Board following the
annual review of performance.
INTERNAL AUDIT
NCM Investment has in place an independent Internal Audit function
headed by the General Internal Auditor, through which the Board, senior
management, and stakeholders are provided with reasonable assurance that its
key organization and procedural controls are effective, appropriate, and
complied with. Internal Audit has access to any information or any staff at NCM
as well as the full authority to perform the tasks assigned to Internal Audit.
The General Internal Auditor is appointed by the Board and reports to
the Audit Committee.
The scope and particulars of a system of effective organizational and
procedural controls shall be based on the following factors: the nature and
complexity of business and the business culture; the volume, size and
complexity of transactions; the degree of risk; the degree of centralization
and delegation of authority; the extent and effectiveness of information
technology; and the extent of regulatory compliance.
The key responsibilities of the Internal Audit function include the
following:
Verifying the sufficiency and effectiveness of internal control systems
and ensure that the internal control systems pertinent to financial and
administrative issues are comprehensive and are being reviewed on timely
manner.
Verifying that NCM’s internal policies are in full conformity with the
relevant laws, policies, regulations and instructions.
Examining particular business activities relating to NCM’s financial
position, internal control systems, risk management and others.
NCM shall not outsource any of the basic audit roles. In the event where
NCM needs to outsource certain audit tasks to external parties for a specific
period of time, the CBK’s approval will be sought.
EXTERNAL AUDIT
An external auditor shall enable an environment of good corporate
governance as reflected in the financial records and reports, an external
auditor shall be selected and appointed by the shareholders upon recommendation
of the Audit Committee and the Board.
The Audit Committee has set appropriate standards to ensure that the
external audit process is carried out by applying the Dual Audit methodology.
The external auditor shall provide the Audit Committee with a copy of
the audit reports and will meet with the Audit Committee to discuss these reports
and any other significant observations on NCM’s issues. The Audit Committee
shall meet with the external auditor in the absence of the senior management at
least once a year.
The external auditor of NCM shall not at the same time provide all
services of an internal auditor to NCM. NCM shall ensure that other non-audit
work shall not be in conflict with the functions of the external auditor.
The audit firm’s partner in charge of NCM’s audit shall be rotated every
four (4) years or earlier.
AUDIT COMMITTEE
The Audit Committee is formed of the Board members, including at least
three non-executive members, one of whom shall be the Chairperson of the
Committee. At least two members of the Audit Committee shall be qualified and
experts in financial business.
The Audit Committee is responsible for reviewing the following:
NCM’s internal and external audit scope, results and adequacy
Accounting issues of a substantial impact on NCM’s financials
NCM’s internal control systems, ensuring that the resources available
are sufficient for the monitoring functions
NCM’s financials before presenting them to the Board to ensure that
necessary provisions are sufficient
Ensuring that NCM complies with the relevant policies, rules and
regulations and instructions
The Audit Committee is authorized to obtain any information from the CEO
as well as the right to invite any senior or Board member to its meetings.
The Board actively oversee NCM’s remuneration system’s design and
operation, and monitors and reviews the remuneration system to ensure that it
is operating as intended. The Nominations and Remuneration Committee provides
guidance to the Board in respect of all remuneration related matters.
NCM’s Salary Administration Policy within its HR Policies serves as the
remuneration policy and incorporates all the requirements within its corporate
governance instructions. The policy includes all aspects and components of
financial remuneration taking into account reinforcing effective risk
management in NCM. The policy is designed to attract and retain highly
qualified, skilled, and knowledgeable professionals.
