The Effect of Saudi Arabian Listed Companies' Corporate Style of Governance on Financial Decisions

Literature Review

Concept of Corporate Governance

Corporate governance is the concept underlying the manner that leaders manage organisations (Solomon 2007 . As such , corporate governance can take a number of forms . The form of corporate governance depends on the organisational context . The particular conditions of the organisation justify the form of corporate governance . The type of corporate governance implemented in an organisation should align with its context to be effective . Corporate governance applied in an organisation has widespread implications via the outcomes of the decisions made and implemented

There is

no singular or commonly accepted definition of corporate governance . The rationale could be the contextual nature of this concept that limits an absolute definition . In studying corporate governance of organisations , it is important to know the specific definition of corporate governance utilised by the organisation to understand decisions made and the outcomes . The definition of corporate governance adopted by firms could be narrow or broad

A narrow definition of corporate governance is the internal control over the assets and liabilities of the firm by considering shareholders benefit (Monks Minow 2003 . The scope of internal management only covers the financial area of operations . This narrow definition refers to the decisions and actions pertaining to the investment and use of company assets as well as the control of liabilities to achieve outcomes that address the interests of shareholders . Corporate governance means the management of the organisation in a manner that upholds the outcomes expected by shareholders , who also comprise stakeholders of the firm...