In recent years, Saudi Arabia has witnessed a qualitative leap in corporate governance, driven by Vision 2030 and the Financial Sector Development Program, in addition to successive updates to the Corporate Governance Regulations issued by the Capital Market Authority. Despite this notable regulatory progress, governance in many Saudi companies remains confined to documents and reports, far from actual daily practice inside boards and executive management.

In this article we review the current state of corporate governance in Saudi Arabia, the main challenges companies face in implementing it, and what must change so that governance turns from a formal obligation into a real tool for protecting and growing the company.

The reality of corporate governance in Saudi Arabia today

Saudi companies can be divided, by the maturity of their governance practices, into three main categories:

  • Companies listed on Tadawul: the most compliant because of the direct oversight of the Capital Market Authority, but implementation is often limited to the minimum disclosure required, without real adoption of a governance culture.
  • Large family companies: they face a double challenge in separating ownership from management, and governance in them is often more formal than real because of the dominance of family decision-making.
  • Startups and small and medium-sized companies: governance is still at an early stage, and is often postponed until the financing or acquisition stage, even though setting up a sound governance structure early saves them later crises.

The common denominator among these categories is heavy reliance on manual tools: Excel files, WhatsApp groups to coordinate meetings, and scattered Word documents for meeting minutes. These tools, although they may seem sufficient in the short term, become a real burden as the company grows and compliance requirements become more complex.

The main challenges facing governance implementation

1. The gap between the framework and its application

Most companies have a carefully written “governance manual” that is never put into practice. Board meetings are held, but without sufficient documentation of decisions and without systematic follow-up on implementing recommendations from one meeting to the next.

2. The absence of unified systems for managing meetings and assemblies

Preparing a board meeting or a shareholders' general assembly usually involves: preparing the agenda, distributing documents, recording attendance, drafting the minutes, and following up on decisions. When these steps are done manually across scattered channels, the likelihood of errors and delays rises, and auditability weakens when a historical review is needed.

3. Weak linkage between risk management, internal audit and compliance

In many companies, risk management, internal audit and the regulatory compliance team work as separate islands, each with its own tools and reports. This fragmentation makes it hard for the board to get a unified, real-time picture of the company's governance position.

4. The difficulty of keeping up with regulatory updates

The Capital Market Authority updates its regulations periodically, and tracking each update manually — and linking it to what specifically concerns the company — requires ongoing legal and administrative effort that many companies, especially medium-sized ones, do not have.

5. A shortage of tools designed specifically for the Saudi market

Many globally available governance software solutions (GRC software) are built primarily for markets and regulations different from the Saudi regulations, forcing the company into complex customization or accepting gaps in regulatory alignment.

What needs to change?

Moving from “governance as a document” to “governance as a daily system”

Effective governance is not a file reviewed annually, but a daily practice: tracking decisions, following up on recommendations, and linking every activity in the company to a responsible person and a clear deadline.

Unifying governance solutions under one umbrella

Instead of treating board meetings, general assemblies, internal audit, risk management and compliance as separate systems, companies need an integrated platform that provides a unified view for both the board and executive management.

Investing in early setup

Startups that build a sound governance structure from the beginning — even a simplified one — save themselves costly restructuring later when preparing for financing or listing.

Relying on locally compliant solutions

Tools designed specifically for the Saudi market and built according to the Corporate Governance Regulations save time and effort that would otherwise be spent on customization and manual compliance checks.

Conclusion

Corporate governance in Saudi Arabia is going through an important transitional phase, but the gap between regulation and implementation still exists in many companies. Closing this gap does not necessarily require huge resources so much as adopting the right tools and processes from the start.

The HWKM platform was built to address this gap by bringing together seven integrated solutions — board meeting management, general assemblies, internal audit, risk management, regulatory compliance, and tracking Tadawul announcements — in one platform designed specifically for the Saudi market.