The Impact Of Adhering to Corporate Governance Standards on Enhancing Decision-making Efficiency:A field Study on publicly traded Companies in the Kingdom of Saudi Arabia

Abstract

AbstractObjective: This study aimed to examine the impact of adherence to corporate governance standards in their various dimensions (transparency and disclosure, board independence, effectiveness of audit committees, protection of shareholders’ rights, and accountability and control) on the efficiency of decision-making in joint-stock companies in the Kingdom of Saudi Arabia.Methodology: The study employed the descriptive-analytical approach, using the questionnaire as the primary tool for collecting primary data from a stratified random sample of (357) respondents working in senior and middle management positions in joint-stock companies listed on the Saudi Stock Exchange, distributed across various economic sectors. The data were statistically processed using SPSS software, employing several statistical methods, including arithmetic means and standard deviations, Cronbach’s alpha coefficient, Pearson correlation coefficient, and both simple and multiple linear regression analyses.Results: The study revealed a high level of corporate governance implementation across its dimensions, as well as a high level of decision-making efficiency in Saudi joint-stock companies. The findings confirmed the existence of a statistically significant impact at the (α ≤ 0.05) level of adherence to corporate governance standards in their combined dimensions on decision-making efficiency, with these dimensions explaining (78.1%) of the variance in the dependent variable. The accountability and control dimension ranked first in terms of impact strength, followed by audit committee effectiveness, transparency and disclosure, board independence, and finally protection of shareholders’ rights.Recommendation: The study recommended strengthening the internal accountability system, developing disclosure mechanisms to include non-financial dimensions, enhancing audit committee efficiency, employing modern technologies to support decision-making, and building an integrated information system connecting various departments within the company.