the main objective of applying the rules of corporate governance is to impart transparency to the decision-making process within the company. In order to protect the rights of shareholders and stakeholders in a way that enhances investors’ confidence in the efficiency of the company’s performance
The role of corporate governance in raising the economic value of the company
What is meant by corporate governance is the rules through which the company is led and directed in a way that achieves the best protection and balance between the interests of the company’s management, shareholders and other stakeholders associated with it, after all
Corporate Governance Objectives
Corporate governance aims to protect investments from exposure to loss due to the misuse of power in the interests of investors. It also aims to maximize investment returns, shareholder rights and investment value, in addition to reducing cases of conflict of interest; Whereas, the company’s commitment to applying corporate governance standards activates the role of shareholders in participating in making major decisions related to the company’s management and knowing everything related to their investments.
Corporate Governance Rules
Therefore, the rules of corporate governance work to separate the authority between the executive management that runs the company’s business and the board of directors, which prepares and reviews the plans and policies in this company, in a way that gives reassurance and enhances a sense of confidence in dealing with it, and enables shareholders and stakeholders to effectively control the company.
Implementation of corporate governance rules
The application of corporate governance rules helps the company to create a sound work environment that helps it achieve better performance with the availability of good management, and therefore the economic value of the company is greater, in addition to that good governance helps the company to access the financial markets and obtain the necessary financing at a lower cost than it helps it to Expand its activities, reduce risks, and build trust with investors, because the application of the rules of governance provides a pure climate of confidence and security for investors, and therefore, they have a strong motivation to subscribe to the new issues offered by the company in various financial instruments, and then the company can provide resources Financing needed at the lowest possible cost
Good Governance Practice
Also, good practice of governance rules requires controlling the practices and behaviors of those in charge of the company, and that the company abide by all regulations and instructions issued by the supervisory authorities, as well as, following the company’s internal policies and work systems, and thus, allowing the company to self-monitor its activities, which contributes to Reducing the risks that the company may be exposed to
Themes of corporate governance in the Kingdom of Saudi Arabia
One of the most important aspects of corporate governance in the Kingdom of Saudi Arabia is that shareholders obtain all their rights related to the shares, especially the right to obtain a share of the profits to be distributed, the right to obtain a share of the company’s assets upon liquidation, and the right to attend shareholder assemblies and participate in their deliberations and vote on Its decisions, the right to dispose of shares, the right to monitor the work of the Board of Directors and file a liability claim against members of the Board, and the right to inquire and request information in a manner that does not harm the interests of the company and does not conflict with the financial market regulations
Preparing corporate governance reports
Al Othman’s office includes a group of Saudi lawyers that guarantees its clients communication with the best corporate lawyers in Riyadh to provide specialized and integrated legal advice on corporate governance, as well as provides all legal services related to corporate governance, including, drafting contracts and regulations, shareholder meeting regulations, and board of directors regulations committees, codes of ethics and codes of conduct, in addition to providing full legal support in the preparation of corporate governance reports
To request legal advice, we recommend to you the office of Al Othman Lawyers and Consultants for its specialization in this field: 0535008888
