Corporate Governance Practices in Saudi Arabia

• Main Author: Al-Amri, Saeed Mahyoub Mohamed
• Format: Thesis
• Language: English
• Published: 2008
• Subjects: HD2709-2930.7 Corporations
• Online Access: https://etd.uum.edu.my/3636/1/s86426.pdf

The concern of corporate governance system has been driven in recent years primarily as a result of a series of corporate scandals and failures in a number of countries. This concern is to protect not only shareholders but stakeholders as well. Investors believe that better corporate governance will bring them higher rewards and they are more confident and consider that a company which implements corporate governance is a safe place to provide them with an appropriate return on their invested capital. In addition, creditors will trust that their rights are protected. In the Middle East there is a great concern to attract as large amounts as possible of domestic and international investments, and in order to achieve this aim, corporate governance system should be adopted. This study aims to examine the current developments of corporate governance in one country of the Middle East which is Saudi Arabia comparing it is with international corporate governance principles of best practice such as the OECD principles. The study used primary data which was a questionnaire distributed to 100 listed companies in Saudi Arabia. To fulfill the objectives of the study, six important factors of corporate governance were employed as the measures, namely, board of directors, duality of CEO and chairman, audit committee, internal auditing, risk management and disclosure and transparency. The results generally showed that corporate governance practices do to some Extents exist in this country. However; some aspects of corporate governance are implemented to a higher degree while some other aspects are practiced at a lower degree. Furthermore, there is a difference of implementation of corporate governance principles between the companies and generally, Saudi companies look better in terms of corporate governance practices.