Corporate Governance in Saudi Arabia: An Overview of Its Evolution and Recent Trends

Abstract

In spite of growing interest in Saudi corporate governance systems, there is little literature on the evolution of Saudi corporate governance. This study helps close this gap by investigating and compiling corporate governance development in Saudi Arabia. After providing background information for Saudi Arabia and its corporate governance model, we touch on the Saudi legal system and key external institutions that helped shape its corporate governance. We examine the specific contributions of the accounting and auditing professions, and the roles of the National Anti-Corruption Commission and the Saudi Stock Exchange. We describe key reforms implemented to develop the Saudi economy and evaluate their importance in facilitating change in corporate governance practices. This study contributes as an initial point of reference for future studies on Saudi Arabia, and serves as a one stop resource for both academics and practitioners, while specifically benefiting foreign and domestic investors considering investments in Saudi Arabia.

Keywords: Capital Markets, Corporate Governance, Ownership, Foreign Direct Investment, Saudi Arabia, Saudi Legal System, Stock Market Crash

JEL Classification: G18, G34, G38, K22