The Government Performance Monitoring Agency recently addressed a number of government agencies of a government investment nature, including public bodies and institutions and representatives in the boards of directors of banks and companies, headed by the Kuwait Investment Authority, the Public Institution for Social Security (PIFSS), the General Authority for Minors’ Affairs and others, of the need to establish clear principles and criteria according to which the nomination and appointment of the boards of directors of companies and banks in which the state contributes.
The agency demanded that government agencies of an investment nature have a clear system for evaluating the performance of their representatives on a regular basis, in accordance with the strategic plan of each company or bank, reports Al-Qabas daily.
The agency recommended that public bodies and institutions set standards for the extent to which government contributions achieve their goals and the return of profits from their activities in a way that reflects on public money for the benefit, stressing the need to link the rewards of representatives of government agencies in the boards of directors of banks and companies to the extent to which they achieve the desired returns and goals from the state’s investment in them or not.
The agency stressed the need for representatives of government bodies and institutions in companies and banks to adhere to the application of Article 189 of the Companies Law and its amendments, which stipulates that public institutions, public bodies, and state-owned companies fully remit the amounts due for their representation on the board of directors of the company in which they contribute, and the chairman of the board of directors.
The company shall pay those amounts directly to the aforementioned authorities within a week of their due date, and these authorities may determine the remuneration and salaries that are paid to their representatives on the boards of directors of those companies.
The government performance monitoring agency has alerted government investment agencies of the need to adhere to the provisions of Article 198 of the Companies Law and its amendments, as the company contract shows the method for determining the remuneration of the chairman and members of the board of directors, and the total of these remunerations may not be estimated at more than 10 percent of the net profit after deducting depreciation and distribute a profit of at least 5 percent of the capital to the shareholders or any higher percentage stipulated in the company contract.
An annual bonus of not more than 6,000 dinars may be distributed to the chairman of the board of directors and to each member of this board from the date of the company’s incorporation until it achieves profits that allow it to distribute bonuses, as stipulated in the previous paragraph. By a decision issued by the ordinary general assembly of the company, an independent member of the Board of Directors may be excluded from the maximum limit of the aforementioned remuneration.
The need for the Board of Directors to submit an annual report to be presented to the company’s Ordinary General Assembly for approval, provided that it accurately includes a detailed statement of the amounts, benefits, and privileges obtained by the Board of Directors, whatever their nature and name.