Year

2016

Degree Name

Doctor of Philosophy

Department

Faculty of Business

Abstract

Ownership structure is considered to be one of the key aspects of corporate governance systems because it influences their effectiveness and efficiency. This research provides systematic, empirical evidence to demonstrate how the complex ownership structure predominant in Saudi Arabia affects the corporate governance systems of petrochemical companies listed in the Saudi Capital Market.

This thesis investigates the following research questions: What is unique about the ownership structures in the Saudi context and corporate governance systems within petrochemical companies listed in the Saudi capital market? What problems are associated with corporate governance in this context? What response to these problems will improve governance systems in the Saudi petrochemical context?

This research used the non-classical principal–principal conflict view of agency theory to describe how ownership structure affects corporate governance systems in the Saudi context (Young et al. 2008). Theoretical arguments are tested by gathering primary and secondary data via a mixed-method approach to gather both qualitative and quantitative data. Three methods were used: a demographic survey, an Analytic Hierarchy Process (AHP) questionnaire and semi-structured interviews.

One of the main features of this research is the Saudi context, with its unique ownership structure and its legal, economic, political, social and cultural systems. There is a gap in the literature examining the relationships between ownership structure and corporate governance systems in the Saudi context. Another feature of this research is the use of AHP, a sophisticated systematic mathematical methodology that analyses how people think and behave (Saaty 1980).

The study findings demonstrate that Saudi Arabia has distinguishing factors that are associated with internal problems in its corporate governance systems. The key findings show that participants relied extensively on external rather than internal governance systems, and paid almost no attention to external auditors, communication with minor shareholders, interference of others, the functions and process of the board of directors or board characteristics.

The main contribution of this thesis to current knowledge is that it extends the literature on the effect of ownership structure on corporate governance systems in Saudi Arabia. These findings show that policy makers and companies should consider the uniqueness of the Saudi context. Further, the results can be used by participants in the Saudi Capital Market to evaluate current corporate governance systems and the role of major shareholders; they can also be used by regulators and companies to improve their corporate governance systems.

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Unless otherwise indicated, the views expressed in this thesis are those of the author and do not necessarily represent the views of the University of Wollongong.