Corporate governance has become an integral part of companies, whether at the global or regional level, where the interest of concept of corporate governance has grown in importance over the decades the past few due to the financial breakdowns and economic crises that many countries have experienced in the money and corporate markets, which was One of the most important reasons is the lack of full disclosure and transparency regarding financial and accounting information for many companies and economic units in the capital markets.
Corporate governance is a set of laws, regulations and standards that define the relationship between the management of the company and the stakeholders or parties associated with the company (bondholders, workers, suppliers, creditors, consumers) to facilitate effective management and entrepreneurship that can achieve the company’s success for a long-term . The structure of the corporate governance system includes the objectives of the company, identifying the paths of those objectives, the methods that can be followed to achieve them, and performance monitoring systems as will.
The Capital Market Authority (CMA) has issued a decision to implement the standards and requirements of corporate governance in a gradual manner starting from 2012 on all companies in the Saudi stock market, whether listed companies or authorized individuals. This is part of CMA’s efforts to raise standards of quality, transparency and disclosure in the securities business sector in order to create an appropriate investment environment.