| المستخلص: |
The aim of the dissertation was to identify the influence of corporate governance practices on the performances of companies operating in Saudi Arabia. In order to fulfil this objective, this study endeavours to find an answer to the research question determined as: “What is the extent of impacts of corporate governance exercises in Saudi Arabia on the company accomplishments?” A quantitative research methodology was employed in this research. Among the quantitative research techniques, the cross-sectional research model was chosen. The investigation carried out in this study focused on the possible relationship between corporate governance practices and financial performance of firms based on indicators on the financial years of 2010 and 2011. 10 variables were used by the researcher as the indicators of the associations between corporate governance exercises and company performances. These variables were the size of the board of directors, the percentage of the independent directors on the directors’ board, CEO/Chairman’s role separation, frequency of board meetings, employment of highly regarded external audit companies, and the rate of block-ownership, ROA, Tobin’s Q, size and leverage. The analysis was based on 192 observations collected from 96 Saudi firms. The findings from the statistical analysis showed that the intensity of possession in form of block-ownership and ROA had a positive direct relationship however, it was also founded that block-ownership had a negative impact on the market value of Saudi firms measured by Tobin’s Q. Moreover, it was demonstrated that leverage posed a significant effect on the company performance in the negative direction in both ROA and Tobin’s Q. The findings implied that Saudi companies having more block-ownership prefer a smaller number of non-executive directors. This suggests that corporate governance practices of Saudi firms might be explained by the agency model. However the findings also implied that it is necessary to develop new governance models in rationalising or elucidating the corporate governance practices to fully explain companies operating in Saudi Arabia.
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