Critical Thinking Essay on Corporate Government Disclosure

Disclosure and transparency are essential elements of a stout framework of corporate governance as they offer the pillar for informed decision making of the stakeholders, potential investors and shareholders in relation to the corporate transaction, capital allocation and monitoring of financial performance. The importance of transparency has been primarily recognized as by both the market regulators and academics, hence resulting in various regulations and rules over a period to ensure a reliable and timely disclosure of financial information coming up standards to which companies have to hold on to. Currently, transparency has to create a new meaning of a more proactive and comprehensive disclosure instead of releasing policies or policies of corporate governance standards. On the other hand, corporate governance has been viewed at the forefront of developing standards of corporate ethics which are focused on reducing corporate practices which are unscrupulous. Corporate governance is largely identified as risky, and the rationale is a corporate governance system which is quite risky.

Transparency as a concept, on the other hand, is identified as putting more responsibilities on the corporation and not only allow the truth to be available to the public but discloses it to different stakeholders groups and every stakeholder. In the recent years, corporate governance has become more dynamic and complex hence increasing due to greater scrutiny and increased regulatory requirements, in coming up with increased responsibilities for the shareholders to keep compliance with the existing governance.

Since the past Asian financial crisis with Saudi Arabia being the country of focus, considerable attention has been the primary focus on T&D on transparency and corporate disclosure requirements. Notably, it has been identified that the major failure that leads to the financial crisis was fueled mostly by inadequate governance practice and financial disclosure such as accountability and supervisions of directors. Due to such actions, there has been an increase when it comes to the number of regulatory requirements for disclosure and accounting standards to offer protection to the investing public.

Some of the methods that will be used in testing of the hypothesis include the qualitative and qualitative research method with the approaches having their benefits and disadvantage. Under this method, the data collection process will involve different instruments from various stakeholders such as the employees, managers and other the different stakeholders. Putting a primary focus on the qualitative research method, a case study method will be adopted by focusing on Saudi Arabia stock exchange listings reports in corporate governance report and corporate governance report. This will help in code provision which the issuers are required to comply or come up with the significant reason of not having to comply. Notably, a survey will be conducted on the corporate governance practices of 100 listed companies which are located in Saudi Arabia based on the disclosed information that was recorded in 2016 websites, other publicly available financial statements and annual reports. Additionally, survey questionnaires will contain 130 questions with practices of corporate governance being assessed across the five signs of organization for Economics, corporation, and Development (OECD), involving five section questionnaires.

The first part will comprise the OECD principle and survey section that will cover Disclosure and transparency, rights of shareholders, board responsibilities, and equitable treatment of shareholders. The additional section will involve the questions and the sub question with the last part being the weighting. The major reason for conducting the survey was to fulfill the objective in assisting Saudi Arabian companies to come up with different ways to of coming up with ways of improving corporate governance.