Review of Saudi Arabia company law reforms and its implications on corporate governance framework- an evidence from emerging market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lubna Javed Rizvi ◽  
Zahid Hussain
Keyword(s):  
Corporate Governance ◽  
Saudi Arabia ◽  
Financial Management ◽  
Good Governance ◽  
Emerging Market ◽  
Relevant Literature ◽  
Company Law ◽  
Content Type ◽  
Governance Framework ◽  
Vision 2030

Purpose This paper aims to review the literature of CG regime in Saudi Arabia, an emerging market for several compelling reasons. Most of the earlier literature on corporate governance subjects mainly aimed at large emerging economies. To date, there is a lack of studies examining the following: authorities and obligations, subcommittees and the regulatory system in Saudi Arabia. Therefore, this paper is an attempt to bridge this gap by reviewing the current laws, regulation, trends and key reforms in corporate governance framework in the country as the current amended laws focused to offer more competence and precision to the regulatory setting in line with the development of the Saudi Arabian stock market and the influx of foreign reserves. Design/methodology/approach The current paper has espoused a content analysis approach in which relevant literature was deliberated and studied. Findings The amended CG rules include some developments into corporate governance and substitutes the earlier version of the long overdue regulation of 1965. The new 2017 implemented Code will reinforce the implication of good governance as a condition model for accomplishing good financial management in the country. This study has provided an overview of the evolution and development of corporate governance in Saudi Arabia by highlighting the key reforms. Research limitations/implications This study has implications for the policymakers and institutional bodies to review the current developments and progress in the country’s overall corporate governance framework in an attempt to attract more foreign direct investment. Saudi Arabia is among the nations that have a potential for huge foreign investments due to its plan of expanding its economy “Vision 2030.” Therefore, this paper will aid foreign investors in deciding to invest in the country after reviewing the current developments in an attempt to implement vision 2030. Originality/value This study contributes to existing literature by examining the current trends in CG, with the discussion on the development of company law in Saudi Arabia which emphasizes on sections that borders on corporate governance.

Understanding decoupling in response to corporate governance reform pressures

2015 ◽  
Vol 23 (4) ◽  
pp. 369-382 ◽  
Author(s):  
Mario Krenn
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Good Governance ◽  
Regulatory Change ◽  
Compliance Monitoring ◽  
Governance Reform ◽  
Firm Level ◽  
Content Type ◽  
Good Corporate Governance ◽  
Actual Use

Purpose – The purpose of this article is to explain under what circumstances firm-level adoption of codes of good corporate governance will more likely be superficial rather than substantive in nature. The article contains lessons for any agency or country that attempts to implement deep and lasting changes in corporate governance via codes of good corporate governance. Design/methodology/approach – The article reviews the literature on compliance with codes of good corporate governance and develops a conceptual model to explain why some firms that have formally adopted a code of good governance decouple this policy from its actual use. Findings – Decoupling in response to the issuance of codes of good corporate governance will be more attractive to firms and also more sustainable under the following conditions: firms’ compliance costs are relatively high firms’ costs of outright and visible non-compliance are relatively high and outsiders’ compliance monitoring costs are relatively high. Originality/value – The article contributes to the debate on compliance and convergence and provides policymakers with a conceptual framework for assessing the likelihood of successful regulatory change in corporate governance.

Is internal and external mechanism of governance enriching the performance of the banking sector of Pakistan?

2017 ◽  
Vol 17 (4) ◽  
pp. 629-642 ◽  
Author(s):  
Sundas Sohail ◽  
Farhat Rasul ◽  
Ummara Fatima
Keyword(s):  
Corporate Governance ◽  
Banking Sector ◽  
Good Governance ◽  
Random Effect ◽  
Random Effect Model ◽  
General Meeting ◽  
Governance Structure ◽  
Board Structure ◽  
Content Type ◽  
The Impact

Purpose The purpose of this study is to explore how governance mechanisms (internal and external) enhance the performance of the return on asset (ROA), return on equity (ROE), earning per share (EPS) and dividend payout ratios (DP) of the banks of Pakistan. The study incorporates not only the internal factors of governance (board size, out-ratio, annual general meeting, managerial ownership, institutional ownership, block holder stock ownership and financial transparency) but also the external factors (legal infrastructure and protection of minority shareholders, and the market for corporate control). Design/methodology/approach The sample size of the study consists of 30 banks (public, private and specialized) listed at the Pakistan Stock Exchange (PSE) for the period 2008-2014. The panel data techniques (fixed or random effect model) have been used for the empirical analysis after verification by Hausman (1978) test. Findings The results revealed that not only do the internal mechanisms of governance enhance the performance of the banking sector of Pakistan but external governance also plays a substantial role in enriching the performance. The findings conclude that for a good governance structure, both internal and external mechanisms are equally important, to accelerate the performance of the banking sector. Research limitations/implications Internal and external mechanisms of corporate governance can also be checked by adding some more variables (ownership i.e. foreign, female and family as internal and auditor as external), but they are not added in this work due to data unavailability. Practical implications The study contributes to the literature and could be useful for the policy makers who need to force banks to mandate codes of governance through which they can create an efficient board structure and augment the performance. The investments from different forms of ownership can be accelerated if they follow the codes properly. Social implications The study facilitates the bankers in incorporating sound codes of corporate governance to enhance the performance of the banks. Originality/value This work is unique as no one has explored the impact of external mechanism of governance on the performance of the banking sector of Pakistan.

Corporate governance and firm performance: empirical evidence from Pakistan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Farooq ◽  
Amna Noor ◽  
Shoukat Ali
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Firm Size ◽  
Good Governance ◽  
Positive Impact ◽  
Least Square ◽  
Local Context ◽  
Content Type ◽  
Governance Index ◽  
Governance Quality

Purpose The purpose of this research is to look into the governance–performance relationship in the context of critical firm characteristics, such as firm size. Design/methodology/approach Based on total assets, sample firms were classified as small or large. The governance index, which is based on 29 governance provisions covering the audit committee, board committee, ownership and compensation structure of the respective firm, measures governance quality among sample firms. A higher governance index indicates a higher level of governance quality and vice versa. Accounting and market value measures are used to determine firm profitability. The authors used the two-stage least square (2SLS) method of estimation of the model to eliminate the simultaneous equation bias. Findings Corporate governance (CG) appears to have a positive impact on accounting return and market indices (Tobin’s Q), but it has little impact on return on equity. In terms of firm size, larger companies profited more from better governance implementation than smaller firms that lacked these principles, thus improving CG. The findings indicate that small businesses should improve their governance mechanisms to reap the benefits of CG in terms of increased profitability. Research limitations/implications There are certain drawbacks to this research. First, the authors omitted qualitative aspects of CG from the CG index, such as the board’s decision-making process, directors’ perceptions of the board’s position and directors’ age and qualifications. Such a qualitative component will improve the governance index in the future while building the governance index. Second, as the current study only looks at the nonfinancial sector, caution should be exercised before applying the findings to the entire population. Practical implications The findings show that companies that follow good governance standards have better accounting and market efficiency than those that do not. As a result, good governance practices can help firms in developing countries improve their performance. Academic researchers, regulators, investors, lenders and practitioners can find the findings useful in establishing a true relationship between firm performance and CG practices in Pakistan. Originality/value The relationship between governance and profitability in the context of firm size is examined in this research. Firms with varying resources and ability to implement CG codes have varying effects on profitability. To the authors’ knowledge, there was a gap in the literature that addressed this topic in the local context.

Mental health and stigma in Saudi Arabia: a scoping review

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nada Alattar ◽  
Anne Felton ◽  
Theodore Stickley
Keyword(s):  
Mental Health ◽  
Saudi Arabia ◽  
Scoping Review ◽  
Mental Health Problems ◽  
Cultural Beliefs ◽  
Relevant Literature ◽  
Mental Health Stigma ◽  
Health Issues ◽  
Content Type ◽  
Mental Health Issues

Purpose Stigma associated with mental health problems is widespread in the Kingdom of Saudi Arabia (KSA). Consequently, this may prevent many Saudi people from accessing the mental health-care services and support they need. The purpose of this study is to consider how stigma affects people needing to access mental health services in the KSA. To achieve this aim, this study reviews the knowledge base concerning stigma and mental health in KSA and considers specific further research necessary to increase the knowledge and understanding in this important area. Design/methodology/approach This review examines the relevant literature concerning mental health stigma and related issues in KSA using the Arksey and O'Malley and the Preferred Reporting Items for Systematic Reviews and Meta-Analyses frameworks. As a scoping review, it has used a systematic approach in literature searching. The results of the search were then thematically analysed and the themes were then discussed in light of the concepts of stigma and mental health. Findings Stigma around mental health impedes access to care, the nature of care and current clinical practice in the KSA. The voices of those with mental health issues in KSA are almost entirely unrepresented in the literature. Originality/value The review identifies that mental health stigma and cultural beliefs about mental health in KSA may act as barriers to accessing services. The voice of mental health service users in KSA remains largely unheard. If public discussion of mental health issues can increase, people’s experiences of accessing services may be improved.

Economic role of politics and corporate governance: reforms captured in Malaysia’s setting

2017 ◽  
Vol 59 (6) ◽  
pp. 839-853 ◽  
Author(s):  
Nurul Nazlia Jamil
Keyword(s):  
Corporate Governance ◽  
Emerging Market ◽  
Political Influence ◽  
Political Agenda ◽  
The Political ◽  
Content Type ◽  
Economic Role ◽  
Corporate Governance Reforms ◽  
Governance Reforms

Purpose This study aims to examine the economic role of politics on corporate governance reforms in one of emerging market, namely, Malaysia. Design/methodology/approach The paper is based upon a literature review analysis. Findings The Malaysian economic, political and social settings have resulted in undue state and detrimental political influence on business, and yet the corporate governance reforms undertaken seemed not be able to resolve the matter. It is suggesting that it would be beneficial for Malaysia to have more independent regulatory bodies representing a wide variety of stakeholders to improve the transparency and accountability to ensure that the reforms are effectively enforced without conflicting with the political agenda. Legal institutional reforms also may be needed to improve the structure, capacity and performance of judicial system, as it is capable to capture reliance of economic role of politics and promoting accountability in Malaysia. Research limitations/implications The economic role of politics on corporate governance reforms is merely to broaden the political strategy in the corporate sector as the change in politics can improve the effectiveness of corporate governance reforms. Moreover, the economic role of politics raises the tone of the corporate governance reforms, and it implies that policymakers need to have effective corporate governance strategy in dealing with the reforms initiatives in areas that have strong political interventions. Originality/value Regulatory and judicial implications are offered as a means to improve corporate governance in Malaysia.

Accounting conservatism, corporate governance and political connections

2017 ◽  
Vol 25 (2) ◽  
pp. 288-318 ◽  
Author(s):  
Nor Farizal Mohammed ◽  
Kamran Ahmed ◽  
Xu-Dong Ji
Keyword(s):  
Corporate Governance ◽  
Emerging Market ◽  
Political Influence ◽  
Ordinary Least Squares ◽  
Accounting Conservatism ◽  
Political Connections ◽  
Board Independence ◽  
Political Connection ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between accounting conservatism, corporate governance and political connection in listed firms in Malaysia where political influence plays a significant role in the capital market and in many business dealings. Design/methodology/approach By utilizing 824 firm-year observations comprising large listed companies over a period of four years from 2004, this study uses ordinary least squares regression models to investigate the relationship between accounting conservatism, corporate governance and political connections in Malaysia. Multiple measures of conservatism developed by Basu (1997) and Khan and Watts (2009) are employed. Findings The results show evidence of accounting conservatism (bad news being recognized earlier than good news) in Malaysia. Further, the results reveal that better corporate governance structure in terms of board independence is positively associated with accounting conservatism while management ownership is negatively associated with it. However, political connection has a negative moderating effect on the positive relationship between accounting conservatism and board independence. The results also suggest political connections have a positive association with firm’s future performance. Originality/value This study is the first in investigating the effect of political connections on accounting conservatism in Malaysian context and how political connections negatively affect the monitoring role of the corporate boards. By directly measuring political connection and controlling for various corporate governance mechanisms and firm-specific attributes, this study contributes to enhance the authors’ understanding of the political influence in financial reporting quality and firm performance in an emerging market setting.

Public Enforcement

2015 ◽  
Author(s):  
Amanda M. Rose
Keyword(s):  
Corporate Governance ◽  
Broad Spectrum ◽  
Company Law ◽  
Minority Shareholders ◽  
Public Enforcement ◽  
Internal Governance ◽  
Governance Framework ◽  
Ex Post

This chapter examines issues relating to corporate governance in closely held corporations. It begins by describing the typical characteristics of closely held corporations, with particular emphasis on shareholder involvement in management, number of shareholders, share transfers, market for shares, and the broad spectrum of shareholders and applications. It then considers common governance issues and conflicts in closely held corporations and proceeds with a discussion of the governance framework for such corporations consisting of company law, model articles, articles of association, shareholder agreements, and corporate governance guidelines. It also explores the internal governance and management of closely held corporations, the governance of share transfer restrictions, and provisions for shareholder withdrawal and expulsion. The chapter concludes with an analysis of shareholder conflicts, especially oppression by majority shareholders and ex-post opportunism by minority shareholders, and how they are governed in closely held corporations.

Corporate governance, globalization and firm performance in emerging economies

2018 ◽  
Vol 67 (8) ◽  
pp. 1310-1333 ◽  
Author(s):  
Neha Saini ◽  
Monica Singhania
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Panel Data ◽  
Foreign Capital ◽  
Good Governance ◽  
Foreign Ownership ◽  
Foreign Firms ◽  
Content Type ◽  
Governance Practices ◽  
The Relationship

PurposeThe purpose of this paper is to examine relationship between corporate governance (CG) and firm performance for a set of 255 foreign-funded firms in the form of foreign direct investment (FDI) and private equity (PE). The authors employ a wide range of CG measures including board size, meetings, board gender and foreign ownership which are used as the proxy of globalisation and control variables like firm age, leverage, firm size and capital expenditure to arrive at a conclusion.Design/methodology/approachPanel data set of 255 (187 companies funded by foreign capital in the form of FDI, and 68 companies having foreign capital in the form PE) companies listed on Bombay Stock Exchange, for the period of eight years (2008–2015) are analysed by using static (fixed and random effects) and dynamic (generalised method of moments (GMM)) panel data specifications to examine the relationship among CG, globalisation and firm performance.FindingsThe empirical results of static model indicate the relationship between CG and performance of foreign firms, which are not very strong in India. This is due to the fact that most of the firms are not following the guidelines and regulations strictly in the initial period of sample years. Diversity in board is found as an important variable in accessing firm performance. And the authors also found that foreign firms are very particular about the implementation of CG norms. The results of GMM model highlight the interaction term of foreign ownership with governance indicators. CG is having a positive and significant impact over performance, inferring that higher foreign ownership (in the form of FDI and PE) in firm leading to positive effect on profitability.Practical implicationsThe investor’s preference of financing a unit is guided by the performance of a firm. Investors are more inclined towards high-performing firms, and hence higher profitability leads to higher inflow of capital. The result indicates that higher accounting and market performance may be achieved by good governance practices, in turn, leading to reduced agency costs. Countries with high governance scores attract more of foreign capital. Similar to the best governed countries, the companies having good governance practices attract more foreign inflows in the form of capital.Originality/valueWhile previous literature considered a single measurement framework in the form of a CG index, the authors tried to incorporate a range of CG indicators to study the effect of globalisation and CG on firm performance. The authors segregated foreign-owned funds into two parts, especially FDI and PE. This paper examined heterogeneity in the form of FDI-funded and PE-funded firms, as no prior literature is available which has evaluated different sets of foreign funds simultaneously on CG.

(Un)earthly governance: beyond functional frameworks to flourishing spacescapes

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Clare M. Mouat ◽  
Erika Jane Edith Techera ◽  
Lies Notebaert ◽  
Meredith Blake ◽  
Renae Barker
Keyword(s):  
Good Governance ◽  
Outer Space ◽  
Social Implications ◽  
Human Occupation ◽  
Content Type ◽  
Governance Framework ◽  
Social Sciences And Humanities ◽  
Research Institutes ◽  
Space Age ◽  
Practical Implications

Purpose Humanity has a weakness in how we approach the “challenge” of using outer space. This paper aims to show how the global and national frameworks that address our planetary activities and crises are inadequate for the opportunities and challenges of life in outer space. Design/methodology/approach The authors draw on multidisciplinary perspectives to refine an organising governance framework that better showcases the challenges and pathways needed for living and thriving in space-age. The authors prioritise two key pillars and overview the practical and social implications that space-age humanity must address. Findings Social sciences and humanities are vital to problematising post-war colonial legacies of governance by distinguishing the unique and overlooked challenges for thriving and working offworld and identifying progressive research agendas. Research limitations/implications The highlighted agenda has implications for collaborative research institutes and project design. As the vital basis for continuous learning, university-based research institutes span bodies of knowledge, experience, convention and imagination that can support vibrant and overdue debate on good governance that is out of this world. Practical implications This expansive approach has practical implications for the decision-making processes and subjects of spacescape, from reconciling the space commons with prospecting and human occupation to potential governance regimes that capitalise on the zeal for moving beyond merely “existing” off-world. Social implications Examining the governance deficit as we pursue developing spacescape frontiers is an enriching (not reductionist) agenda that deliberately troubles the existing and emerging regime for governing our scientific and imagined off-world society. Originality/value This framework appeals to humanity’s highest evolution in co-producing a fair and flourishing off-world governance framework (beyond replicating planetary regimes).

Factors impacting entrepreneurial intentions among university students in Saudi Arabia: testing an integrated model of TPB and EO

2020 ◽  
Vol 62 (7/8) ◽  
pp. 779-803
Author(s):  
Yaser Hasan Salem Al-Mamary ◽  
Mohammed Abdulrab ◽  
Mohammed A. Alwaheeb ◽  
Naif Ghazi M. Alshammari
Keyword(s):  
Saudi Arabia ◽  
University Students ◽  
Relevant Literature ◽  
Entrepreneurial Intention ◽  
Entrepreneurial Intentions ◽  
Equation Modeling ◽  
University Administrators ◽  
Content Type ◽  
Saudi Arabic ◽  
The University

PurposeThis research intends to contribute to the literature of entrepreneurial intentions through determining the factors impacting the entrepreneurial intentions among students in different academic programs. This is in order to enhance and improve entrepreneurship-related procedures within relevant universities.Design/methodology/approachThe study was conducted by a structured survey questionnaire on 261 students in the University of Hail. The questionnaire was developed based on previous studies. The proposed hypotheses were tested by the use of the structured equation modeling (SEM) via using Amos software.FindingsThe results of the current study support the theoretical integration of the model as most of the hypotheses have been accepted. The results of the survey also show that attitudes toward behavior, self-efficacy, autonomy, risk-taking, pro-activeness and competitive aggressiveness are expressively related with entrepreneurial intention. Yet, social norms and innovativeness are not considerably connected with entrepreneurial intention.Research limitations/implicationsThis study seeks to contribute to the relevant literature by integrating the theory of planned behavior (TPB) and the entrepreneurial orientation model (EO). This is in order to identify the factors impacting the intention of entrepreneurship among Saudi university students. As the case in many studies, this present study has some limitations. The main limitation lies in that it would not be possible to generalize the study's findings. This is due to the fact the research is the outcome of examining and studying one Saudi university. Therefore, it would be better to conduct similar studies in other Saudi universities in order to generalize the findings of the study.Practical implicationsThe study's results could be of value to policymakers and university administrators in Saudi Arabia universities by which they could be enabled to allocate resources, develop strategies and provide all requirements for the sake of improving entrepreneurial skills among university students. This comprehensive model can be used as a tool for planning and prioritizing resources in bid for providing the required support as this support would reinforce the entrepreneurial opportunity of university students. As such, students would have better thinking about entrepreneurial work and thus would be assisted in achieving their professional goals and the broader goal of nation building.Originality/valueSince today's youth are viewed as the potential future entrepreneurs, they should be encouraged to achieve the Saudi Kingdom's goals through creating suitable employment opportunities for them by supporting entrepreneurship. Therefore, pointing out the factors impacting the entrepreneurial intention of students will contribute to developing the field of entrepreneurship among young people in Saudi Arabic in general. In addition, realized outcomes would create an exciting new knowledge with regard to the entrepreneurial intention among the youth at the university level.

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