The Board, Senior Management and all employees of NCM Investment are committed to effective Corporate Governance and the highest standard of professional behavior and conduct. NCM is committed in promoting integrity and maintaining the highest standard of ethical conduct in all of its activities in compliance with CMA rules and regulation of Kuwait


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 while earning the best reputation and credibility. This can only be achieved by exceeding our customers’ expectations.

 

PRINCIPLES OF GOOD CORPORATE GOVERNANCE
 

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.

The Kuwait Companies Law,  and the corporate governance instructions of CMA as well as NCM’s Articles and Memorandum of Association and internal policies, include the controls and basis for protecting shareholder rights.

The Board ensures that it protects the rights of its shareholders including minority shareholders as well as NCM’s various stakeholders.


RIGHTS OF SHAREHOLDERS

Rights to review and participate in the decisions related to amending NCM’s Article and Memorandum of Association, as well as the decisions related to non-ordinary transactions which might affect NCM’s future or activity, like mergers, sale of a substantial portion of its assets, or winding up of subsidiaries.

Rights of meeting participation, comments and recommendations (if any) on any improvements required.

Rights of contributing in the decision-making of any significant changes being made in NCM.

Rights of expressing an opinion on the appointment of members of the Board of Directors

Rights to have accurate, comprehensive, detailed, sufficient, and timely essential information in order to evaluate investments and make informed decisions.

Rights for receiving dividends and for participating and voting at the General Assembly meetings.    

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