Done by: Zainan AlBeesh Assessment 3 The Relationship between Corporate Governance and Financial Performance of Saudi Corporations Done by: Zainan AlBeesh Assessment 3

Introduction Corporate Governance Board of directors Government mechanism Internal external

Research Problems Does corporate governance affect the financial performance of Saudi corporations? What factors of corporate governance affect the financial performance of Saudi corporations?

Research Hypotheses Null hypothesis 1: There are no effects of corporate governance on the financial performance of Saudi corporations Alternative hypothesis 1: The corporate governance has effects on the financial performance of Saudi corporations

Null hypothesis 2: There are no corporate governance factors that affect the financial performance of Saudi corporations Alternative hypothesis 2: There are corporate governance factors that affect the financial performance of Saudi corporations

Research Methodology qualitative research Secondary data

Findings Saudi Arabia has the largest stock market With $202.5 billion. It is the largest oil producer and exporter GDP= $376 billion

Conclusions There is a strong relationship between corporate governance and the financial performance of Saudi corporations. Studies have shown that Saudi corporations have strong corporate governance and majority of Saudi corporations are insider owners. Strong corporate governance in Saudi Arabia seems not to place monitoring mechanisms to track their managers.

Conclusions There are corporate governance factors that each affects strongly and positively related to firm performance or value.

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Global Investment House and SAMBA Financial Group. (2007) Global Investment House and SAMBA Financial Group. (2007). The 2007 guide to Corporate Governance in the GCC. Retrieved on September 20, 2012 from website: http://www.euromoney.com/images/502/51468/GCCsept07.pdf   Hart O. (1995). Corporate Governance: Some theory and Implications. The Economic Journal Vol105, Issue 430. Retrieved on September 20, 2012 from website: http://www1.fee.uva.nl/fm/courses/1_multipart_xF8FF_3_Hart%20 EJ%2095%20Corp%20Gov.pdf Kraft J. and Ravix, J.J. (2008). Corporate governance in advanced economies: lessons in a post financial crash era Introduction to the Special Issue. Retrieved on September 20, 2012 from website: http://hal.archives-ouvertes.fr/ docs/00/33/27/37/PDF/REL-INTRO- 2008.pdf