The Role of Governance Principles on Reducing Small Enterprises Risk in Saudi Arabia

Authors

  • Dr. Nahla Al-Nour Muhammad Al-Makki
  • Dr. Mahassin Abd alla Ali Shomo

Abstract

The study investigated the role of governance principles in reducing risks of small enterprises in Saudi Arabia. The problem of the study problem was represented in that many small enterprises faced by risks related to the payment of obligations, low profitability in the short term and low financial solvency in the long term. Therefore, this study investigates the effect of applying the principles of governance in small enterprises on reducing risks. The study aims to find out to what extent there are principles of governance in small enterprises in Saudi Arabia and to identify to what extent the principles of governance are applied in small enterprises in Saudi Arabia. The importance of governance lies in reducing risks in small enterprises. The descriptive analytical approach was used to measure the relationship between the role of governance principles, reducing risk and enhancing sustainable performance in small enterprises after the Corona pandemic in Saudi Arabia. The hypotheses of the study were: There is a statistically significant relationship between applying the principles of governance in small companies and reducing risks after the Corona pandemic. There is a statistically significant relationship between control, disclosure requirements and using governance of financial reports in small companies. The study concluded the following findings: There is a statistically significant relationship between applying the principles of governance in small companies and reducing risks after the Corona pandemic. It is also must be considered that the members of the Board of Directors should be of good conduct and reputation. The objectives, tasks and powers of the Board of Directors should be defined clearly and in detail and to what extent they are directed towards maximizing the value of shareholders. The study recommends the following: The objectives, tasks and powers of the Board of Directors should be defined in a clear and detailed manner and to what extent they are directed towards maximizing the value of shareholders.

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Published

2023-02-24