Should the Saudi Arabian Regulation of Directors’ Duties be Reformed in the Light of Lessons from the UK

Abstract

Directors’ duties of care and loyalty and the duty to avoid conflict of interest, are essential in the company law framework. Those duties are created to guarantee that directors are liable to a good standard of responsibility when managing a company. This research used the comparative law approach to recognise issues in the Saudi Arabia framework of directors’ duty to act with care and loyalty in the general interests of a company, and to avoid conflicts of interest. The primary aim of this thesis was to offer a reform of Saudi law of directors’ duties. By exploring the company law of the United Kingdom (UK) as standard, this research assesses the clarity, approachability and certainty of Saudi law and recognises shortcomings and weaknesses. The possibility of adopting some of the best practices legal regulations from the UK company law to the Saudi Law with the aim to propose a reform for the legal framework in Saudi Arabia is assessed. The argument here is that the Saudi legislature has not enact any provisions regarding the directors’ duties, the duty care, the duty of loyalty, and the duty to avoid conflict of interest in the new Saudi Companies Law 2015. Though the new Saudi Corporate Governance Regulations 2017 have addressed some related regulations regarding the directors’ duties subject, however, there is still possibility for improvement in this area. The finding suggests the feasibility to adapt some of the UK legal regulations to benefit the directors’ duties reform in the Saudi companies law.