The Introduction of Audit Committees and Implementation of The Corporate Governance Code in Kuwait

This thesis explores the introduction of audit committees (ACs) and implementation of the corporate governance code (CGC) in Kuwait. The study has five aims: (1) to investigate the reasons for the delay in issuing the ACs’ regulations before the release of the CGC in 2013; (2) to explore why some companies voluntarily formed an AC while others did not; (3) to understand how listed companies perceived, experienced and responded to the CGC’s introduction in 2013 and the reasons for their reactions; (4) to analyse the strategic responses that companies used when the mandatory code was introduced, which led to changing the code; and (5) to explore the interviewees’ perceptions regarding the extent to which they believe that listed companies will implement the AC effectively. The data were collected using semi-structured interviews with key individuals. The institutional logics perspective was used as the theoretical framework to analyse and interpret the study’s findings. The results show that the main obstacle to implementation of CG and ACs in Kuwait is the dominance of family logic. Moreover, the reasons for the delay in issuing the regulations for ACs may be directly or indirectly due to the domination of market and family logic over state logic. The findings indicate that family, market, state, corporate and professional logics have most influence on the decision to voluntarily form ACs. The findings also reveal that the companies guided by state and corporate logic perceived the CGC as compatible with institutional demands, while the companies embedded in family and market logic perceived it as a conflicting demand. The companies and other interested parties used compromise, defiance and manipulation as a response to the introduction of the mandatory code. Most interviewees believed that companies will implement the ACs symbolically because of the dominance of family logic in Kuwait.