Do Institutional Investors Play a Meaningful Role in the Effective Implementation of Corporate Governance on SDG?

Abstract

Objective: Corporate governance is a recent development in Kuwaiti financial markets. Corporate governance principles have created several new concepts, such as the independence of directors, the establishment of various committees, the separation of the CEO from the chairman of the board, and other related principles. This article will discuss how institutional investors can play a meaningful role in the effective implementation of Corporate Governance Principles. The primary aim of this research article is to seek a detailed understanding of the Kuwait Corporate Governance Code (KCGC) as it relates to instituting a special code for institutional investors. Method: Solving legal problems and finding the best way to apply special laws can best be highlighted by using a comparative legal analysis. This methodology allows scholars to compare the laws of several countries to find alternative ways of addressing legal issues. This research article will compare legislation in the developed market in the UK to evaluate its potential effectiveness in averting future problems and bringing a better understanding of this subject in Kuwait. Result & Conclusion: The institutional investor plays an influential role in increasing the effectiveness of the principle of commitment to the ‘Comply or Explain’ regime. In the UK, the stewardship code for financial institutions was issued to give them control and responsibility over the application of the governance system. The article suggests that institutional investors should play a more active role in insisting on the application of corporate governance principles. It considers the ‘Comply or Explain’ regime and how it is being used effectively by companies backed by institutional investors. In addition, a new corporate governance code for institutional investors should be developed, similar to the UK Stewardship Code.