The concept of governance and its importance for institutions within the Kingdom of Saudi Arabia

Governance is a fundamental concept in the management of modern institutions, and it refers to the legal, ethical, and institutional framework that governs the management, direction and control of institutions. Governance plays a critical role in promoting integrity, transparency, responsibility and efficiency in the performance of organizations. Good governance practices help foster trust among stakeholders, such as shareholders, employees, customers and the local community.
In Saudi Arabia, governance is a vital necessity for organizations across all sectors. The concept of governance has been significantly enhanced and improved in recent years in the Kingdom, in order to achieve the Kingdom's Vision 2030, which aims to diversify the economy and promote sustainable development.

The importance of corporate governance within the Kingdom of Saudi Arabia is manifested in several aspects:

• Enhance transparency and accountability: A strong governance system helps to enhance transparency in the performance of organizations and decision-making. When processes and activities are open and understandable to shareholders, they enhance trust and reduce risk.
• Balancing the public good: Governance practices ensure that organizations are directed towards the public interest and not the narrow interest of individuals or interested parties. This contributes to achieving sustainable economic and social development in the Kingdom.
• Attracting investments and promoting economic growth: Good governance practices enhance investor confidence in institutions, making the Kingdom an attractive place to invest. When enterprises grow and prosper, they contribute to economic growth and job creation for citizens.
• Capacity Development and Innovation: Governance encourages organizations to develop, enhance their capabilities and improve their performance by making appropriate strategic decisions and promoting innovation and organizational development.
• Enhancing the reputation of institutions: Good governance practices help build a positive reputation for organizations in the Kingdom, enhancing trust and cooperation with customers, business partners and the local community.

To realize the benefits of governance, organizations within Saudi Arabia should adopt good governance practices and ensure their compliance with the applicable legal and regulatory framework. Senior management must be a leader in promoting a culture of governance and providing the necessary resources for its effective implementation. Organizations should follow the principles of transparency, accountability and fairness in all aspects of their work, and ensure the participation of all stakeholders in important decision-making.

‍