CORPORATE GOVERNANCE IN THE KINGDOM OF SAUDI ARABIA

Abstract

While in the past the Companies Act has been documented and there have been limited references to the proposed Companies Act, to the author's knowledge there has not been a comprehensive comparison of the existing Companies Act and the first and second proposed revisions thereto. The author has examined these proposed revisions and highlighted the differences between the current Companies Act's provisions and the proposed ones. The author provides commentary on relevant, current and proposed, Companies Act's provisions which describe the function, effect, scope and what they fall short of by themselves and/or within other rules forming the system of corporate governance in Saudi Arabia. In addition, there has been little to no treatment of the issuance of shares or the Corporate Governance regulations applicable to publicly-traded companies. In this work, the author attempts to fill the void left by previous legal authors and to discuss and comment on those topics in an insightful way. With regard to the discussion of the various articles of the Corporate Governance Regulations, this discussion marks the start of elaborate consideration of publicly held corporations in the context of dual regulation under both the Companies Act and the Corporate Governance Regulations. In short, Saudi Arabia's recent reforms advanced its corporate governance structure. Through the adoption of the proposed Companies Act, further development will be achieved.