Revista Internacional de Pesquisa Contábil

Abstrato

Corporate Governance and Board of Directors Responsibilities: The Case of Saudi Arabia

Zerban AM, Abdullah M and Abdullateef M

Compliance with rules and regulations is very critical and important issue when organizations are infusing a culture of honesty and integrity in business. Commitment of board of directors and willing of top management and employees to strength corporate governance facilities the role of compliance officers. Failure to adhere to compliance function will increase operational risk and hence impacting interests of stakeholders. Corporate governance is a cornerstone in improving economic efficiency and growth in order to attract investors and gain their confidence. Saudi Arabian Monetary Agency (SAMA) which is the central bank in the Kingdom of Saudi Arabia with Capital Market Authority is thriving continuously to strength corporate governance rules for banks and financial institutions. One of the circulars for banks and financial institutions is the requirements for appointments of senior positions in financial organizations with the objective of appointing persons who possess integrity, honesty, and good reputation. In addition, SAMA issued several guidelines for anti-money laundering, rules for countering fraud and a code of professional ethics of staff. Recently, banks are required to form compliance unit to make sure banks prepare their financials according to International Financial Reporting Standards (IFRS). The aim of this research is to highlight a case of corporate governance and board responsibilities in one of the financial institutions in Saudi Arabia. The case will be presented to show the mechanism followed by the financial institution and whether it is complied with rules and if not what corrective actions are done in order to strength corporate governance principles.