The corporate governance code (CGC) has become a major and critical requirement for the Capital Market Authority and the Central Bank of Saudi Arabia, along with many companies, especially publicly listed corporations.
To meet exacting standards is always challenging, but building a long-term integrated process in communication and governance of knowledge management will benefit the company. Thus, the organization can measure the extent of both change and adherence to policy or governing bodies standards through regulations, principles and rational practice. The word governance derives from the Greek verb kubernaein (kubernao) meaning to
steer, the metaphorical sense first being attested by the Greek philosopher Plato.
Companies may have the best corporate governance code written and published policies or procedures. Governance is not only as stipulated in the definition as a set of legislations and laws that define the relationship between the company’s management, shareholders and stakeholders. It is specifically legislation that contributes to regulating nomination and remuneration mechanisms, board of directors’ mechanisms, independence and legal responsibility.
It should be understood that governance is not only for bad companies, but also for successful companies to become more successful. There are many companies financially successful in terms of achieving profits and good levels of management, but they need to be governed further in operations and supply chains. The role of governance in these sectors should be activated so these companies can increase their profitability and sustainability, especially in telecommunications and technology because there are many rapid changes taking place. Telecommunications companies, for instance, have many projects and need huge warehouses of devices.
• Dr. Zahra Al-Nasser is an assistant professor in the department of finance and banking at Dar Al-Uloom University in Riyadh and an advisory board member in the department. Her research interest is corporate governance in GCC countries. She has published a number of peer-reviewed papers.