Corporate Governance & Vision 2030
The Saudi Market is going through transformational economic change. The newly announced Saudi 2030 Vision for a diversified economy with less dependence on oil reflects this transformation. Foreign institutional investors were recently allowed to invest directly in the Saudi stock markets. As well, in its effort to attract investment, diversify its economy, and create sustainable economic growth and jobs. The government has embarked on a new initiative that allows fully owned foreign retail and wholesale companies to invest directly in the Saudi market without the traditional Saudi partnership requirements. The aim of the government is to transform the Saudi economy to one of the region’s most diversified knowledge based economic centers and to improve the performance of different sectors of the Saudi economy, including state-owned enterprises and family businesses as they transition between generations.
As part of the effort to transform the Saudi economy, corporate governance is identified as an important factor in providing a vehicle to assure sustainability and security for investors and for corporate social responsibility. Quality corporate governance is viewed as a key factor for attracting domestic and foreign investors, spurs sustainable economic growth, and provides employment opportunities.
Good governance is the key for companies in the increasing globally competitive market; particularly, when family-run businesses are in the transition to be integrated into global market. Good governance provides assurance for long-term profitability and sustainability as it gives positive signal to outside investors. Therefore, we believe it is essential to promote a good Corporate Governance benefiting from Alfaisal University's academic assets and experiences.
Benefits of Good Corporate Governance
Improved Access to Capital
Easier access to domestic and global capital (equity & debt) including through inclusion in global investment indexes
Helps improve decision making and enhance the long-term prosperity of companies
Well-governed companies receive higher market valuations
An engaged board and effective internal controls help companies assess risks more effectively and respond quickly
Higher Employee Motivation
Effective systems can facilitate the consistent application of corporate values through transparent internal & external communication
Better Succession Planning
A strong and effective board can support succession in family businesses and listed companies