The Case Of Saudi Arabia

Corporate governance defined as the system of rules, practices and processes by which a company is directed and controlled. Balancing the interests of the stakeholders is essential involves in a company, which include its shareholders, management, customers, suppliers, financiers, government and community. There are five major elements of corporate governance, which are, board commitment, good board practices, functional and effective control environment, transparent disclosure, and well defined shareholder rights. To prevent corporate scandals, fraud and the criminal liability of the organization, good executed corporate governance is important and must apply and respect in the organization. There have a relationship between corporate governance and internal control, for example, the more in corporate governance, the more of internal control in the organization and the less of fraud occur. One of the tasks and goals of the corporate governance is to ensure there have adequate internal control within organization to protect the organization from any conflicts for the benefits of

“While corporate governance may not dictate the economic prospects of developing countries, it certainly plays an integral role in shaping them.”

Corporate governance in itself has no single definition but common principles which it should follow. For example in 1994 the most agreed term for corporate governance was “the process of supervision and control intended to ensure that the company’s management acts in accordance with the interest of shareholders” (Parkinson, 1994)1. Corporate governance code is not a direct set of rules but a self-regulated framework which businesses choose to follow. This code has continued to change in the past 20 years in accordance with what is happening in the business world. For example the Enron scandal caused reform in corporate governance with the Higgs Report which corrected the issues which were necessary. Although it does not quickly fix problems, it gives a better framework to

The argument of Berle and Means (1932) on corporate governance formed the foundation for further studies by various researchers on the trend of corporate governance. Their study revealed the possibility of creating a separation of control between the mangers who run the large size corporations and the owners who are the provider of capital. This observation of a departure and separation of ownership and control gave rise to a situation where emphasis is now focusing on the behavioural aspect and topical theory of the firm.

Farrar, J. (2008). Corporate Governance: theories, principles and practice. 2nd ed. South Melbourne, Vic: Oxford University Press

Phenomenal growth of interest in corporate governance has emerged in recent years. The body of literature on the subject has grown markedly in response to successive waves of large corporate failures. Furthermore, there have been numerous attempts to define what constitutes ‘good corporate governance’ and to provide guidelines in order to enhance the quality of corporate governance.

The Oxford English Dictionary defines ‘governance’ as ‘the act, manner, fact or function of governing, sway, control’. ‘To govern’ is ‘to rule with authority’, ’to exercise the function of government’, ‘to sway, rule, influence, regulate, determine’, ‘to conduct oneself in some way; curb, bridle (one’s passions, oneself)’, or ‘to constitute a law for’.

Corporate governance refers to ‘the ways suppliers of finance to corporations assure themselves of getting return on their investment’ (Shleifer and Vishny, 1997: 736). Corporate governance discusses the set of systems, principles and processes by which a

For the purpose of this report, corporate governance is defined as the relationship that exists between company management, stakeholders and the board. Objectives of the company are usually set, attained and monitored through the structure corporate governance provides. (Balgobin 2008).The Guyana Corporate Code of Governance is similar to the UK codes of corporate governance and the Organisation for Economic Co-operation and Development (OECD 2004).These principles serve as a reference point that can be used by companies to develop their own frameworks for corporate governance that reflect their own circumstances or situations.

CORPORATE GOVERNANCE................................................................. 7 2.1.1. Corporate Governance ...................................................................... 7 2.1.2. History of Corporate Governance ...................................................... 7 2.1.3. Corporate Governance Structures ..................................................... 8 2.1.4. Good Corporate Governance............................................................. 9 2.1.5. South Africa ....................................................................................... 9 2.2. THE ABSENCE OF GOOD CORPORATE GOVERNANCE................... 11 2.2.1. Management.................................................................................... 11 2.2.2. Enron ............................................................................................... 12 2.2.3. WorldCom........................................................................................ 13 2.2.4. Leisurenet........................................................................................ 14 2.2.5. Detection of Fraud ........................................................................... 14 2.3. SARBANES-OXLEY AS A RESULT ....................................................... 15 2.3.1. Introduction to SOX ......................................................................... 15 2.3.2. The Impact of

Furthermore, each company has different objectives and seeks their own benefit. When they have in common, corporate governance practices, it influences the economy of a country, and therefore growth in their development. It because the investors or financial institutions abroad, will be more attracted to inject resources. Consequently, the company will access to better conditions in the international capital markets, being, ultimately, less exposed to the economic crisis.

Corporate governance can be defined as the process, customs, laws by which the affairs of a company are managed and controlled it also

The Saudi Arabian marketplace is recovering from a declining price of oil, their number one source of income. Since the price of oil has been declining over the last few years, the oil market and therefore the county has been functioning in a deficit. Since there no personal income tax, the government relies heavily on the oil. They have been trying to get more foreign investors by and they have been doing that by selling bonds, $17.5 billion to be exact. (Kim, 2016) "Saudi Arabia has also started a new strategy dubbed Vision 2030 that aims to break the country's "addiction" to crude." (Egan, 2017) Saudi Arabia is also wanting to invest money in the United States’ economy. They did that by recently pledging $ 20 billion for American

The paper reviews three important theories in corporate governance, different theories using different terminology, and views corporate governance from different perspective. Some articles are used to support these theories in this paper. From the Cadbury Report in 1992, we can get the information that corporate governance is the system by which companies are directed and controlled, which involves a set of relationship between a company’s management, its board, its shareholders and other stakeholders, and the objectives for which the corporation is governed. There are mainly three important theories included in corporate governance, which are agency theory, transaction cost theory and stakeholder theory, each theory views

Corporate Governance refers to the way a corporation is governed. It is the technique by which companies are directed and managed. It means carrying the business as per the stakeholders’ desires. It is actually conducted by the board of Directors and the concerned committees for the company’s stakeholder’s benefit. It is all about balancing individual and societal goals, as well as, economic and social goals. Corporate Governance is the interaction between various participants (shareholders, board of directors, and company’s management) in shaping corporation’s performance and the way it is proceeding towards. The relationship between the owners and the managers in an organization must be healthy and there should be no conflict between the