Board Composition, Independence and Gender Diversity in Corporate Governance: Saudi Arabia and International Best Practices

Abstract

Board gender diversity and board independence are key elements in board composition which have long been considered important topics in academic literature. Women are significantly underrepresented in Saudi corporate boards and their progress has been very slow, primarily because the government has not yet implemented any regulatory approaches to promote their participation on corporate boards. Furthermore, the Saudi Corporate Governance Regulations 2017 (SCGRs 2017) contains two main challenges related to board independence: the definition of independent directors and the required number of independent directors, both of which undermine their ability to effectively perform their roles of oversight and objective decision-making. This thesis aims to offer improvements and reforms to SCGRs 2017 to address the challenges of women's participation and board independence in Saudi corporate boards. The study addresses two research questions: To what extent do gender diversity and independence on boards contribute to effective corporate governance? What regulatory measures would be most suitable for Saudi Arabia to tackle issues concerning board gender diversity and board independence? This thesis argues that appropriate levels of board independence and women's participation on corporate boards are crucial to promote the interests of various stakeholders' groups. The research employs a doctrinal legal approach, supported by documentary analysis of secondary sources and a comparative analysis of Norwegian, the UK, and Malaysian jurisdictions. Drawing on Dhir's factors and the theory of legal transplant, this research provides valuable insights from the countries under analysis that can effectively address the challenges of board gender diversity and board independence in Saudi Arabia. This research contributes to the existing literature by offering a unique analysis of these challenges, which have not been sufficiently examined or addressed before.