THE ROLE OF SAUDI CORPORATE GOVERNANCE REGULATIONS ON FOREIGN

Abstract

Foreign direct investment is critical for countries seeking to promote development and stimulate economic growth. KSA is in the process of transforming its economy and diversifying it from an oil-based economy to a knowledge-based economy. Corporate governance regulations were investigated in this dissertation to determine its influence on direct investment in KSA. To determine the effectiveness of corporate governance on FDI the UK, USA and UAE were used to compare it with KSA. It was found that where corporate governance laws and regulations promote board independence, the independence of auditors, disclosure requirements, goals of the corporate governance, increased shareholder rights and independence structure is achieved, then transparency, accountability and predictability is attained attracting foreign investors. It was found that UK, USA and the UAE promote board independence, mandatory requirements, appointment of independent committees, independence of committee structure and a shareholder-focused model attract more foreign FDI. So KSA should further tighten its corporate governance goals to enhance predictability, accountability and transparency in its investment environment to attract FDI investment.