The Relationship Between Corporate Governance Mechanisms and the Performance of Saudi Listed Firms

Al-Faryan, M. A. S., The relationship between corporate governance mechanisms and the performance of Saudi listed firms. Corporate Ownership & Control, 14(2-2), 338-349, 2017

12 Pages Posted: 10 Mar 2020

See all articles by Mamdouh Abdulaziz Saleh Al-Faryan

Mamdouh Abdulaziz Saleh Al-Faryan

University of Portsmouth - Faculty of Business - Department of Economics

Date Written: 2017

Abstract

This paper gauges, both qualitatively and quantitatively, the pertinent variables to corporate governance practices and their relationship to business productivity in the context of the Kingdom of Saudi Arabia. This study was conducted in response to the limited literature in this context. A new code of corporate governance was issued by the Saudi Arabian Capital Market Authority as a direct consequence of the 2006 stock market crash; in 2010, the code was made mandatory for listed firms. Rigorous empirical studies are practical not only for Saudi Arabia and its policy makers but also potentially for solving global investment issues and ensuring security. This study found two variables to have a significant negative relation: chief executive officer turnover and independent board members. Thus, greater rates of chief executive officer turnover are associated with negative firm performance. In addition, independent board directors’ negative value was found to be very close to zero and significant only at the 10% level. Consequently, some caution is required when considering this result.

Keywords: Corporate Governance, Firm Performance, Saudi Arabia, Stock Market

JEL Classification: G10, G30, G34, L25

Suggested Citation

Al-Faryan, Mamdouh Abdulaziz Saleh, The Relationship Between Corporate Governance Mechanisms and the Performance of Saudi Listed Firms (2017). Al-Faryan, M. A. S., The relationship between corporate governance mechanisms and the performance of Saudi listed firms. Corporate Ownership & Control, 14(2-2), 338-349, 2017 , Available at SSRN: https://ssrn.com/abstract=3535981

Mamdouh Abdulaziz Saleh Al-Faryan (Contact Author)

University of Portsmouth - Faculty of Business - Department of Economics ( email )

Faculty of Business and Law, University of Portsmo
Richmond Building, Portland Street
Portsmouth, PO1 3DE
United Kingdom

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