Corporate Governance Flashcards
6 cards from real CME-1 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Corporate Governance flashcards as text
What is the primary regulation governing corporate governance of listed companies in Saudi Arabia?
Answer: Corporate Governance Regulations issued by the CMA
The Corporate Governance Regulations (CGR) issued by the CMA establish governance requirements for companies listed on Tadawul, covering board composition, committees, disclosure, and shareholder rights.
What is the minimum number of independent directors required on the board of a Saudi-listed company?
Answer: At least two independent directors or one-third of the board, whichever is greater
CMA Corporate Governance Regulations require that independent directors constitute at least one-third of the board or a minimum of two directors, whichever is greater, to ensure adequate independent oversight.
Which committees are mandatory for Saudi-listed companies under CMA governance regulations?
Answer: Audit committee, remuneration committee, and nomination committee
Saudi-listed companies must establish at least three mandatory committees: an audit committee, a remuneration committee, and a nomination committee. Each has specific composition and responsibility requirements under the CGR.
What is the role of the audit committee in a Saudi-listed company?
Answer: Overseeing financial reporting, internal controls, and the external audit process
The audit committee oversees the integrity of financial statements, reviews internal control systems, recommends appointment of external auditors, and reviews compliance. It must have at least one member with financial expertise.
Under Saudi corporate governance, what disclosure obligations apply to board members regarding conflicts of interest?
Answer: Board members must disclose any direct or indirect interest in transactions with the company
Board members must disclose any direct or indirect interest in contracts or transactions with the company. The interested director must not participate in voting on such matters, and these transactions require shareholder approval.
What rights do minority shareholders have under Saudi corporate governance regulations?
Answer: Rights to cumulative voting, access to information, and bringing derivative actions
Minority shareholders have several protections including cumulative voting for board elections, the right to access company information, the ability to bring derivative actions, and protection against related-party transactions that harm their interests.
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