SACM - United Kingdom
Permanent URI for this collectionhttps://drepo.sdl.edu.sa/handle/20.500.14154/9667
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Item Restricted The relationship between corporate governance and Audit quality on Sustainability: A study on Saudi energy listed companies(Brunel University London, 2023-11-27) Alaamri, Yazen; Nandy, MonomitaThe study examines the influence of corporate governance on audit quality and their impact on SDGs 7 and 13, specifically focusing on Saudi energy companies. Considering recent developments in corporate governance mechanisms, such as the roles of the Board of Directors and Audit Committee, this study emphasises the importance of audit quality in promoting sound audit practices and ensuring reliable financial reporting. Consequently, it concludes that corporate governance and audit quality play a vital role in advancing SDGs 7 and 13. This research is motivated by Saudi Arabia’s challenge to diversify its energy sources within the framework of the Vision 2030 initiative, aligning with the objectives of the SDGs. The research aims to identify the specific governance challenges faced by energy companies in a region where energy is central and integrate these challenges into the broader SDG sustainable development agenda. It addresses gaps in the literature, particularly the scarcity of studies in Saudi Arabia that explore the impact of corporate governance on audit quality and the achievement of SDGs 7 and 13. Saudi Vision 2030 emphasises the importance of corporate governance, and existing studies suggest that improved corporate governance in developing countries could enhance audit quality and help achieve the SDGs. However, there is a lack of evidence-based conclusions on strengthening audit quality to meet corporate governance goals in the MENA region, including Saudi Arabia. Moreover, studying the environmental sustainability of energy companies in countries like Saudi Arabia is an urgent task. The study employs a mixed-methods approach, conducting interviews with 25 participants from the Saudi energy sector and surveying 201 participants involved in corporate governance, audit, and SDGs 7 and 13 in Saudi Arabia. This approach addresses gaps in the literature by incorporating qualitative information and being the first to include participant perspectives on overall audit quality. The theoretical framework combines agency theory and stakeholder theory to synthesise various interests and address corporate governance issues comprehensively. Methodologically, the study provides robust justification beyond purely statistical analyses. Empirical literature highlights the importance of good corporate governance and audit quality for achieving sustainability objectives related to clean energy provision and climate change mitigation. The interplay among governance, audit quality, and sustainability objectives is complex. This study’s theoretical and policy contributions are relevant for understanding the relationship between governance, audit quality, and SDGs. The evidence demonstrates the relationship between these objectives, aiding organisations and policymakers in designing effective governance frameworks and achieving sustainability goals. Overall, this study contributes to the literature by highlighting the unique challenges and opportunities for Saudi energy companies, emphasising the crucial role of corporate governance in enhancing audit quality and shaping future research and corporate strategies, and illustrating the complex interaction between good governance, improved audit quality, and achieving SDGs.49 0Item Restricted CEO Personal Attributes, Time Preference, and Corporate Decisions(2023-07-03) Alosaimi, Abdulmohsen; Fairchild, Richard; Hassanniakalager, ArmanThe thesis contains three empirical studies that have been applied to the Saudi stock market regarding behavioural finance and corporate governance. To address the personal attributes of chief executives (CEOs), we design three research questions to understand and discuss how CEO overconfidence and CEO horizon may affect the decisions of non-financial listed companies. The first empirical study (chapter 3) discusses that overconfident CEOs could have a significant effect on a firm's performance by influencing financial and investment decisions according to the empirical literature. This investigational study uses a cross-sectional design to test whether CEO overconfidence affects time preferences and establishes which orientation overconfident CEOs follow. Our findings confirm that overconfident CEOs are more future-orientated which means that overconfident CEOs have greater ability to focus on the future rather than the present. The results also indicate that overconfidence is positively related to risk which is consistent with the findings of numerous academic studies. Also, the association between age and risk is negative and statistically significant. Our findings are robust following the alternative measurement's testing for CEO overconfidence, time preference, and alternative estimation techniques and endogeneity tests. The second empirical study (chapter 4) investigates the effect of CEOs’ overconfidence and CEO long-horizon on corporate leverage decisions using balanced panel data for a sample of 119 non-financial firms on the Saudi Stock Exchange (TASI) during the period 2016-2020. The chosen model is the Pooled OLS model which is employed as an analytical technique. The findings confirm that overconfident CEOs are significantly and positively related to financial leverage which indicates that overconfident CEOs tend to take likely more debt in their capital structure of firms. This study also finds evidence that firms led by CEOs who have a longer horizon are more likely to have a higher level of debt. We also establish to examine the combined influence of CEO overconfidence and CEO long horizon on corporate leverage which are found to be significant and positive. The results are robust to various tests and alternative explanations. The final empirical study (chapter 5) focuses on horizon problems that pronouncedly arise when CEOs are close to departing their position for retirement where they are more likely to focus on the short-term in order to protect their successful legacy. Overconfidence involves overestimating their skills, knowledge, abilities and likelihood of success by inflating their projected future earnings and investment returns. This paper examines the influence of CEO horizon and CEO overconfidence on the dividend policy of firms using a sample of the 119 largest Saudi listed companies during the period 2016-2020 with the expectation that CEOs approaching retirement may lead firms to pay a dividend. The findings are that short horizon CEOs positively affect the dividend policy which is consistent with our prediction. In turn, CEO overconfidence is insignificantly related to dividend policy. Our findings remain robust after testing the alternative measurement of dividend policy, alternative estimation methods, alternative measurement of CEO horizon, and following making endogeneity checks.19 0