KUWAIT CITY, Oct 16: Recent developments in Kuwait’s investment sector have led to a significant “screening” process for approximately 25 listed companies, resulting in a thorough reassessment of the performance of their executive management and boards of directors. This initiative comes as many firms aim to refresh their competitive strategies following major shifts in the investment landscape due to changing market conditions. Informed sources told the daily that executive management performance has notably declined, with many companies failing to propose innovative strategies or effectively capitalize on available opportunities, particularly in asset management.

As a result, some companies have opted to dismiss their executive management, citing negligence in enhancing company assets and failing to comply with regulatory standards set forth by the Capital Markets Authority. Specifically, certain investment firms have encountered violations related to key positions, including risk managers, investment and asset managers, and investment advisors. These shortcomings have severely impacted their business operations, financial performance, and overall results. Furthermore, noncompliance with Law No. 7 of 2010 and its executive regulations has necessitated substantial restructuring within these companies.

Despite previous efforts by the Capital Markets Authority to enforce governance and transparency, several listed investment companies continue to struggle with adhering to these essential standards. Recent evaluations have highlighted numerous violations by executive management, which have adversely affected corporate performance and financial results. The restructuring efforts have led to changes in executives and presidents across around 25 listed companies. Reports indicate that many executive teams have failed to effectively implement company strategies or fulfill their responsibilities to activate primary business functions, often neglecting to adhere to board-approved policies. For example, some investment decisions were made without proper review by the company’s risk management departments, violating established risk management procedures. The sources further noted a lack of progress among several companies in identifying alternative revenue channels, particularly in an investment environment characterized by scarcity and limited tools.

Consequently, some firms have resorted to capital reductions, reflecting the absence of a clear vision or plans for expansion. Additionally, a trend has emerged wherein companies are narrowing their activities and licenses from the Capital Markets Authority to focus on specific roles, such as subscription managers and investment portfolio managers. This deterioration in company conditions and the absence of effective revenue-generating strategies have compelled several firms to reevaluate their executive management structures. The lack of forward-thinking goals has driven companies toward comprehensive changes, aiming to rebuild and reposition themselves in the market. Notably, some of the changes within the boards of directors and executive teams were infl uenced by exit strategies and restructuring efforts aimed at enhancing organizational effectiveness.