Corporate Governance is a critical issue and an integral part of National Financial Institute of Kuwait UAE – NFIK’s business activities. NFIK is committed to the sound practices of corporate governance which set the basic principles of rights and responsibilities for every Shareholder, the Board and, the Executive Management in order to ensure efficient control and management are duly exercised by the bank in support of Shareholders’ added value.

Corporate Governance seeks to define rules, instructions, and procedures for decision-making and control of a company in order to control conflicts of interest and ensuring conformity of information for its beneficiaries and to propose a structure within which the company can attain its objectives. This system emphasizes on equity, transparency, responsibility, and accountability of the organization. It includes mechanisms that ensure that the organizations financing – human and financial resources – is in line with the objectives of the organization. Furthermore, it ensures and enhances the efficiency of the organizations capital management for the long-term.

It is worth noting that the banking system is one of the most critical and sensitive sectors of a countrys economy, as it is responsible for financing the other economic enterprises as well as providing major financial services to the public sector through their payment systems. The banks also have the responsibility of providing credit and liquidity to help improve the economic situation during a financial crisis. Due to the existence of micro and macro depositors as well as plurality and diversity of the customers (users of banking services), the scope of the beneficiaries of the banking system is broader than that of the other economic enterprises, which merits further investigation.
In addition to continually increasing the wealth and the Economic Value Added (EVA) of its shareholders and the broader society, the National Financial Institute of Kuwait (NFIK) has been diligent in considering and securing the interests of its other beneficiaries. In order to achieve success in different fields of its activities, NFIK’s Board of Directors is responsible for setting and overseeing the administrative rules and procedures, as well as the transparency and uniformity of these beneficiaries.

In fact, NFIK’s commitment to apply the right corporate governance rules is due to its belief that these rules constitute an integral part of its culture in managing its daily strategic activities. Further, in addition to consolidating its own culture in terms of companies and establishments, Corporate Governance practices aim at improving the bank’s internal and external controls.


The function of the Compliance Committee is to ensure the conformity of internal instructions, bylaws, and regulations with other pertinent rules such as the Central Bank of Irans rules. The Compliance Committee receives reports from the Compliance Department.

Compliance department as one of the most crucial departments of National Financial Institute of Kuwait was established with the aim of reducing the risk of non-compliance with regulations and reputational risk, ensuring that the activities of the bank are in full compliance with rules and regulations, and enhancing the credibility of the bank. In line with these objectives, the NFIK compliance department follows a strict policy with respect to the grant of credits and facilities.

All the requests of the customers such as loans, letters of credits, and guarantees are monitored by the compliance department to ensure that they comply with domestic and international rules. The domestic rules entail internal as well as external rules. Internal rules are guidelines issued by NFIK, and external rules include a vast area comprising of the constitution, domestic codes, the central bank of Kuwait banking regulations, and banking guidelines. International rules include international conventions, United Nations resolutions, international treaties, Anti-Money laundering and fraud regulations, uniform principles such as the ICC-UCP, and other relevant regulations. The compliance department provides reporting to relevant credit committees on complying with the aforesaid rules. It further assists the board by supplying information about the rules to demonstrate effective corporate governance.


Emirates NFIK sees corporate governance as critical and crucial to achieve its primary goal of creating a sound working environment, achieving better performance and long-term value for all stakeholders. Governance frameworks enable the Group to reduce risk and manage change in-line with achieving its strategic objectives.

The Group also seeks to enhance the performance of the Company’s Board of Directors, strengthen internal control, follow up the implementation of strategies and define the roles and powers of shareholders, the Board of Directors and the Executive Management, in addition to stressing the importance of transparency and accurate disclosure of information used in accordance with international best practice.

Transparency and accountability are central to Emirates NFIK’s business, ensuring that the controls necessary for effective risk management, regulatory compliance, and accurate disclosure of information to the market are in place. Emirates NFIK is committed to operating according to international best practice.

Emirates NFIK fosters excellent professional relationships both internally – between the bank’s Board, its Committees and its Executive Management team and externally, with shareholders, the Central bank, and other regulatory bodies, and the business communities the Group operates in.

We as a Group, abides by all international banking regulations, UAE central bank rules and DIFX stipulations. The Group’s Risk and Capital Management fully complies with Basel II requirements and Anti Money Laundering laws.

The Board strongly promotes good corporate governance in order to achieve superior performance, while maintaining conformity with laws and regulations. The Board adopts innovative tools in its governance and compliance systems to be in line with best corporate practices.


The Group’s Board of Directors meets at least five times during the year, and is comprised of nine prominent members of the local business community, all of whom are leaders in their respected industries.

Mr. Hamad Khalaf Al Hosani, in his capacity as the Group Company Secretary, supports the Board by ensuring that regulatory obligations and corporate governance requirements are met. He manages the operations of the company’s formal decision making, safeguarding that all appropriate procedures are followed.

As provided in Emirates NFIK’s articles of association, the Board of Directors is responsible for the overall direction, supervision and control of Emirates NFIK Bank. The Board’s mandate covers the formal agenda for the overall strategy and oversight of the corporate structure, financial reporting, internal controls, risk management policies, as well as approval of the Annual Report and corporate dividends. The members of the Board comprise a suitable balance of executive, nonexecutive and independent Directors.



The Tax Unit of the Legal Department is responsible for ensuring that it meets the robust requirements set out in the NFIK’s governance standards.

This involves ensuring that there are effective controls in place around all significant tax processes and operations, with adherence to these controls monitored and reported to senior management on a regular basis.
Reviews of tax governance effectiveness are undertaken on a periodic basis by the NFIK’s Internal Audit department and by the Tax Unit of the Legal Department to ensure compliance with the NFIK’s governance standards.

NFIK intends to have professional and cooperative relationships with tax authorities in all of the jurisdictions in which it operates.

It endeavours to comply with all its compliance obligations and legal disclosure requirements and whenever a dispute arises, it actively engages with the relevant tax authority to expedite an efficient resolution.

We consider that this tax policy statement applies to NFIK’s activities within the State of Kuwait and United Arab Emirates, as well as globally, and complies with NFIK’s obligation under paragraph 16(2), Schedule 19 Finance Act 2016 for the year ended 31 December 2017 and subsequent accounting periods.

NFIK accepts that tax risk is a function of the NFIK Group’s global activities and needs to be managed appropriately. It does this through adhering to the NFIK’s formal risk management framework, policies and methodologies to ensure that emerging tax risks across all activities are identified, assessed, managed, and reported where appropriate to NFIK senior management.

Where new tax risks emerge, either as part of a transaction or through day-to-day operations, these are formally assessed by the Tax Unit to ensure that these are in line with the NFIK’s attitude to risk.
Where appropriate, tax advice will be taken from reputable third party advisors and advance clearances will be sought periodically from tax authorities to ensure that NFIK complies with the laws applicable to the transaction structure.

At NFIK, we are driven by our values and principles. Integrity is an important part of who we are as an organisation. We believe that honesty and professionalism are fundamental to our role as the sovereign investment fund of the State of Kuwait. Our culture and values are fully reflected in this Policy.

The Management Executive Committee (EXCO) manages the Group activities in a manner consistent with the business strategy, risk appetite, remuneration and other policies set by the Board. The EXCO updates the Board periodically with all material matters including changes in business strategy and risk appetite, Group’s performance and financial condition, breaches of risk limits or compliance rules, internal control failures, legal or regulatory concerns. EXCO assembles twice a month.

The Board Audit Committee assembles quarterly and is responsible for ensuring quality control in Emirates NFIK Group’s financial reporting and compliance processes. The Board Audit Committee oversees and monitors all the internal controls and systems in place for financial reporting, and ensures legal and regulatory compliance on financial matters. The Committee is responsible for framing policies on internal audit, overseeing financial reporting process, providing oversight and interacting with the Group’s external and internal auditors.

The Board Risk Committee shapes the overall philosophy and approves all risk management frameworks. The Committee also supervises the establishment and operations of risk management systems and receives regular reviews on their effectiveness. It is also responsible for Emirates NFIK Group’s corporate and risk governance framework, which includes reviewing, approving and monitoring various Group Risk Management Procedures, Group Risk appetite and the Overall Risk Profile. The Committee also supervises Basel II and III related activities. It assembles on a quarterly basis.

The Committee reviews and guides Management on strategic Human Resources (HR) decisions that are related to executive succession planning, nationalisation strategy, top management appointments and remuneration policies. The Committee assembles on a quarterly basis and ensures that the Group’s HR policies are practiced in a professional and ethical manner.

The Board Credit and Investment Committee assembles as required in order to review and approve the Group’s credit exposures and investment portfolios. This highly specialised Committee supports the Board Executive Committee and the Board Risk Committee in actively managing credit and investment risk. It oversees the execution of the Group’s credit risk management and reviews the credit profile of material portfolios to ensure that credit risk rating is aligned with business strategy and risk appetite.

Tax planning is a legitimate activity, which the NFIK Group should engage in to protect the value of its investments and manage the costs of any taxes it suffers. Accordingly, NFIK will always consider taking advantage of legitimate tax reliefs and alternatives offered under the laws of the countries in which it invests.
However, NFIK does not use marketed tax avoidance schemes or conduct any wholly artificial tax planning.

Transaction structures must have NFIK’s wider commercial goals as their fundamental driver and NFIK will always consider the potential impacts of all proposed transactions including considering any potential financial and reputational impacts on the NFIK Group.

National Financial Institute of Kuwait (NFIK) was established by Amiri Decision No (22) of 2005 (as amended) establishing the NFIK, with the aim of:

“developing, investing and managing the State reserve funds and other property assigned to it by the Supreme Council for Economic Affairs and Investment of the State of Kuwait (“the Supreme Council”) in accordance with the policies, plans and programs approved by the Supreme Council.”

The Tax Unit of the Legal Department is responsible for providing the tax services required to support the operation of NFIK’s business or, where appropriate, for coordinating the provision of such services from External Tax Advisers or Legal Counsel.

This Policy applies to National Financial Institute of Kuwait (NFIK), all NFIK Managed Entities and all Special Purpose Entities (“SPEs”) controlled by any of them (“NFIK Group”).

This Policy has been approved in accordance with the NFIK governance framework and policies and applies to NFIK Group’s activities within the State of Kuwait, as well as globally.


NFIK is owned by the Government of the State of Kuwait and reports to the Supreme Council for Economic Affairs and Investments, the highest decision making body concerning Energy, Investment and Economy in Kuwait. The SCEAI, which is Chaired by His Highness the Amir, approves investment strategy, assigns funds and approves the budget as well as certain NFIK Regulations.

The Authority is managed by a Board of Directors, consisting of a Chairman, a Deputy Chairman and a number of members appointed by a decision of the Amir, which also determines their remunerations. Some of the members are independent and qualified in the investment field, and the members may include one or more international experts.


The Government of the State of Kuwait has determined that NFIK is a savings fund without pre-defined liabilities and whose objective is investing for the benefit of Kuwait’s future generations.
NFIK’s investment mandate includes an objective to invest domestically and internationally. In addition, NFIK acts as custodian for certain domestic funds and assets of the State in order to provide oversight and to support effective management of the assets of the Government of the State of Kuwait.

Any investment activity having significant direct domestic macroeconomic implications is closely coordinated with the domestic fiscal and monetary authorities represented at the Supreme Council for Economic Affairs and Investment to ensure harmonization of those activities with domestic macroeconomic policies.

NFIK seeks to achieve real long-term investment returns without exposing the Portfolio to unacceptable levels of risk. The Supreme Council for Economic Affairs and Investment through discussion with the Board will determine the timing and level of any dividend payments from NFIK to the Government of the State of Kuwait.
It is the practice of NFIK to ensure segregation between investment decision making and investment evaluation teams.


Towards a more comprehensive view of sustainability customer experience is our priority. Innovation and technology in service to our customers is at the heart of what we do. In addition, given the importance of customer feedback to guide their experience, NFIK has developed various platforms where customers can easily provide their feedback and trigger quick and efficient resolution mechanisms.

In 2014, our overall customer satisfaction score reached a new record of 96% (up 3% compared to 2013, and up 5% since 2015). Significant improvements in customer satisfaction were seen for Credit Cards, Loans, Jawhara Accounts, Branch Facilities, Cash Deposit machines, and Social Media – and all other surveyed areas maintained their very high scores, with no areas declining in customer satisfaction. In addition, improvement actions were identified for some products and services along with the waiting time at branches. Digitization of our services has also become increasingly important in serving our customers.

Along with the availability of service, accessibility of service is important. A service that is not known or is not accessible to customers is simply of no use. At NFIK, we have various channels through which our customers can easily access our products and services without any hassle. These channels are available to all of our customers, particularly those with special needs.

We are delighted to present our 2017 Sustainability Report, which we are proudly publishing for the third year in a row. On behalf of the Board of Directors, We extend our appreciation to all our valued NFIK stakeholders who have been involved in advancing our sustainability practices.

This year, NFIK’s Sustainability Report is focused on impact, while also highlighting that our sustainability commitment and performance are aligned with various organizational, industrial, national and international sustainability frameworks.

In 2016, we identified the key social, economic, and environmental aspects and integrated them in service of creating long-term value. Then, in 2017, we developed sustainability strategy mapping to integrate our key innovative ideas into our core business strategy and operational practices. This year, in 2019, we have emphasized impact through our sustainability-related initiatives and improvements, in alignment with leading global sustainability frameworks.
NFIK believes that “sustainability is everyone’s responsibility.” We are committed to becoming a leading advocate of, and a national exemplar in, sustainability practices.

NFIK’s governance practices and financial performance have been covered in NFIK’s Annual Reports since our incorporation 49 years ago. Since 2008, NFIK has also published annual Corporate Social Responsibility (CSR) Reports. Originally, these CSR reports focused primarily on our community-giving initiatives in Kuwait, while also highlighting our key environmental programs. We now release this 2018 NFIK Sustainability Report as our third consecutive comprehensive Sustainability Report. This continues our commitment since 2006 of transparently communicating our approach to reporting the full range of sustainability-related impacts, issues and opportunities of interest to our stakeholders. Both our 2017 and now our 2018 sustainability reports are in accordance with the core option of the Global Reporting Initiative (GRI) guidelines, and this 2018 report is aligned with the United Nation’s Sustainable Development Goals (UNSDG), the Kuwait National Development Plan (QNDP)-New Kuwait Themes, and the Boursa Kuwait Sustainability Disclosure Guide.

NFIK’s key stakeholders include employees, customers, investors, communities, non-governmental organizations (NGOs), industry and sector bodies, suppliers, regulators and governments. In defining the material issues of concern for NBK, we benchmarked sustainability leaders and competitors in our region, examined leading sustainability indices and raters globally and in the gulf region, reviewed the Global Reporting Initiative (GRI) Financial Sector guidelines, and conducted extensive materiality assessment activities with a wide range of our stakeholders to allow them to highlight their views on what are our most material sustainability priorities.

Our stakeholders increasingly expect banking and financial services firms to integrate environmental, social and economic sustainability considerations into risk management and investment choices, product and service offerings, management of resource consumption and emissions, human resource development, safety and wellbeing, community engagement, governance policies and practices and ESG disclosure and reporting. NFIK is committed to proactively evolving our sustainability policies and practices, more thoroughly reporting on our impact and management policies and practices, better communicating what we are already doing, and vigorously meeting these changing conditions and more rigorous expectations.

NFIK has integrated our approach to sustainability by considering stakeholder engagement, annual materiality assessments, and sustainability strategy mapping. Additionally, NFIK is keen to align our sustainable development performance with the Kuwait National Development Plan (QNDP), the United Nation Sustainable Development Goals (UNSDG), the Boursa Kuwait Sustainability indicators as well as the GRI standards to have clear directions toward a sustainable future.

Our sustainability materiality process is aligned with our wider business practices. In 2018, we conducted our second formal materiality assessment and reported it in detail in our 2018 Sustainability Report. This assessment helped us prioritize and structure our most material issues for sustainability improvement, management, and reporting. Materiality assessment and stakeholder inclusiveness were thus important in determining the content for this report. They are also key principles of GRI standards, and we have followed the methodology outlined by GRI.

In 2018, we used extensive surveying, workshops, one-on-one meetings, complaint tracking and analysis. We have defined the materiality of each topic in the following manner.

We conducted an assessment for our 2018 sustainability business and practices to list out the most related topics within the sustainability context. We identified 18 topics, which have also been rated by our stakeholders according to their significance.
We mapped out a list of internal and external stakeholders who are influenced by and affect our business. We then asked them to rate the importance of each topic on a scale from 1 to 5.

We plotted the average result of each topic according to the internal and external stakeholder rating into a materiality matrix for easy access, available in the 2018 report. NFIK‘s corporate governance is crafted to ensure proper governance, processes, and procedures throughout the organization and to incorporate sustainability elements throughout our policies, practices and performance. We recognize our environmental, social, and governance (ESG) impacts, and therefore governance is a cornerstone in our sustainability strategy.

In 2018, NFIK began the process of chartering a Sustainability Committee to supervise the overall strategy and implementation of our Sustainability Focus Areas, including also our Environment, Social, and Governance (ESG) initiatives related to sustainability practices. We developed a Draft Sustainability Committee Charter defining purpose, membership, roles and responsibilities, operating practices and focus areas.

We have also formed an executive level CSR and Community Committee. This committee designs and helps foster business practices, social contributions and initiatives that support the growth and stability of the society. The committee is chaired by our Board Chairman, but leadership is rotated to help embed social responsibility throughout our executive ranks.

NFIK has long been and remains to this day highly committed to ethical practices. We have a wide range of customer, marketing, and risk management practices focused on the highest ethical standards. In addition, we provide extensive training to employees focused on Anti-Money Laundering, Fraud Risk, Anti-Corruption, and Anti-Bribery. All the elements of our governance efforts are presented in our 2018 Sustainability Report.

NFIK steadily focuses on enhancing our workplace environment, assessing our employee retention strategies, planning individual career development paths for each employee, and ensuring a safe work environment for them. Nationalization, diversity, talent management, and succession planning are NFIK’s core strategy to constantly improve the quality of our workplace.

NFIK is committed to embracing diversity and equal opportunity in our workplace. For us, unlike most organizations, the most material equal opportunity/diversity-related issue is increasing the percentage of Kuwaiti nationals in our workforce. In 2018, 65% of NFIK’s workforce was Kuwaitis. Also of importance to us is growing our percentage of female employees. In 2018, 45% of all NFIK employees were female. Both these percentages remain the same as 2017, and looking ahead, we have plans aimed at increasing both.

Employee engagement, loyalty, motivation, willingness to put in extra effort beyond their job description all impact not only employees’ experience and the work climate for all of NFIK, but customer satisfaction and business performance overall.
Our Employee Value Proposition project (EVP), and an Employee Engagement Survey (EES). Additionally, last year NFIK invested more than KWD 1.1 million in employee training, involving 14,000 employee hours. Our 2018 Sustainability Report profiles 10 significant employee events and activities that have contributed to increased employee engagement and satisfaction.

In both internal operations and for the projects in which we invest, NFIK adheres to regulations on human rights, such as indigenous rights and impacts on indigenous peoples and communities, protection of human health, protection of cultural properties, occupational health and safety, rights around involuntary resettlement, stakeholder engagement and participation. We are compliant with all laws regarding child and forced labor, freedom of association, collective bargaining, and non-discrimination.

“Giving Back to Community” defines the essence of NFIK and is one of our six sustainability focus areas. We strive to continue our strong legacy of maximizing our social impact and contributing actively to the local community. Our consistent track record of giving back to the community forms a powerful foundation of NFIK‘s sustainability performance.

NFIK has focused its objectives on improving health care quality, empowering youth, and improving the natural environment. NFIK has aligned the impacts of our community engagement activities against UNSDGs and KNDP to maximize direct and indirect social and economic returns on our community investment.

NFIK made an impact on the community based on three main themes of New QaTar and Kuwait National Development Plan (KNDP) health care, human capital, and living environment, as well as several United Nation Sustainable Development Goals (UNSDGs)

Our work with NFIK Children’s Hospital as well as more than a dozen other vital community programs is discussed extensively in our 2018 Sustainability Report. NFIK contributed AED 782,000 this past year to our community investments, as well as AED 3,400,000 to the Kuwait Foundation for the Advancement of Sciences (QFAS). Overall, and for over two decades, NFIK spending on giving back to the community through our social responsibility programs has exceeded AED 180 million, including annual contributions to QFAS.

NFIK has taken practical and cost-effective actions to address environmental concerns. NFIK promotes judicious use of the available energy, efficient use of water, proper waste treatment and disposal, and greenhouse gas (GHG) emissions management as part of viable and workable sustainability practices.

Our new headquarters building has been constructed with the formal goal of achieving LEED certification, keeping in mind all the positive environmental criteria that will contribute to reducing the harmful impacts of the traditional construction and building methods.
NFIK recognizes the importance of water as a fundamental resource. As a global company, we understand that access to adequate supplies of water is essential for the communities in which we operate. NFIK is also committed to conserving energy as much as possible. Therefore, we manage both energy and water consumption responsibly across our branches by implementing numerous energy conservation measures and by using the lowest possible volume of fresh water in our operations and by reusing water where conditions permit. In 2018, we reduced our electricity consumption 5.9% per employee – and 8.5% in total electricity compared to the previous year. We decreased our water consumption 24.1% overall, and 22.0% per employee.

Working closely with the Kuwait National Development Plan (QNDP), NFIK supports the Kuwait National Vision 2035 and aligns our financial goals with their sustainable goals. Advancing the community, strengthening innovation, using green technology and products, building capacities, adopting positive environmental practices, and improving energy efficiency are the pillars of NFIK’s strategy.

NFIK’s objective is to support the economic growth of Kuwait. Toward this end, the NFIK Group is financing the Kuwait government’s infrastructure development projects as part of the QNDP. NFIK has also financed Public-Private Partnership (PPP) projects such as AZ Zour North IWPP and supported bidders for Kabd Municipal Solid Waste Project and BOT (Build-Operate-Transfer) Projects, for example, the expansion of the Sulaibiya Wastewater Treatment Plant. Thus, NFIK is increasingly playing a primary role as the Kuwait government’s financial partner in major sustainability-related projects. Some of the other projects already underway include the clean fuel refinery upgrades, solar energy projects, a waste-to-energy incinerator, housing provision, seawater desalination plants, and hospital construction.


Funds are assigned to the Authority by the Supreme Council for Economic Affairs and Investment, and the Ministry of Finance may assign additional funds or surpluses.
The Authority shall reinvest the investment returns that are generated with respect to funds managed by the Authority.
Except for annual distributions to the Government of the State of Kuwait of income and gain generated from investing the funds managed by the Authority, the withdrawal of funds managed by the Authority shall be limited to emergency situations as determined by the Supreme Council for Economic Affairs and Investment.

Leverage at total portfolio level will only be implemented to the extent permitted within approved limits. In addition, certain investments, for example in real estate, may involve leverage at the project level, as determined by the NFIK investment team. When leverage is involved, appropriate due diligence and risk assessments are conducted by NFIK in order to fully understand, measure, and manage risks connected with such borrowing facilities.

NFIK’s investment strategy is based on its responsibility to generate a strong and sustainable return for the Government of the Government of the State of Kuwait, within the boundaries of an investment mandate based on purely economic and financial grounds and a long-term investment time horizon.

As a consequence, NFIK deals with third parties solely on economic and financial grounds. NFIK has a strong set of anti-money laundering, anti-corruption, anti-bribery policies in place. The same policies also have to be enforced by NFIK counterparties in the context of direct transactions. Specific tender process and a Tender Committee, in-line with the Kuwaiti Tender Law and the NFIK Tenders and Auctions Regulations, were defined and set up to ensure full transparency and remove any potential conflict of interest indealing with external service providers and suppliers.


The CEO provides regular reports to the NFIK Board, covering various activities of the Authority.
On an annual basis, NFIK provides the detailed performance reports, along with the consolidated annual report and consolidated audited financial statements.

Performance reports show performance returns, analysed and benchmarked using various methodologies, including by asset class, by peer group, by sector, by portfolio, etc.

In addition, the NFIK Board of Directors appoint an external Auditor of the Big Four firs to audit the financial statements of NFIK and provide its report to the NFIK Board and to the Supreme Council for Economic Affairs and Investment.

NFIK is an attentive shareholder and will usually be represented at meetings of shareholders of companies in which it has a material investment, in this context, ‘material’ may mean material in financial or percentage terms. In this regard NFIK is motivated only by the responsibilities of its Mission and acts strictly and exclusively in pursuit of economic and financial objectives.