The Effect of Corporate Governance on Financial Performance of Listed Firms in Saudi Arabia

The study focused on creating a relationship between corporate governance and the financial performance of companies in Saudi Arabia. The research evaluated the relationship between board member compensation and board member size, as well as the company's financial performance. This study aimed to measure financial performance by return on assets and equity, earnings per share, and net profit. In order to evaluate the relationship between corporate governance and the financial performance of the listed companies in the Saudi market. The data used in this research was collected through each company's annual report and board report on Tadawul. This research adopted a quantitative design. The designated population for this study focused on financial and nonfinancial firms in Saudi Arabia from 2014 until 2018. the results indicated there is no significant relationship between board compensation and the firm's financial performance in firms operating in both the financial and nonfinancial sectors. The results further demonstrated no significant link between board size, and the organization's financial performance in financial and nonfinancial sectors. The study recommends that policymakers and the authorities of the Saudi market adjust and review the corporate governance policies related to board compensation and board size in the listed firms in the Saudi market.