The controlling power of royal family members on the board of directors and audit committee effectiveness
This paper examines the association of the presence of royal family members on the board of directors with audit committee effectiveness. The sample of this study consists of 444 listed manufactured firms in Saudi Arabia for the period 2012-2019. Using the Pooled OLS regression, the result of the st...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Growing Science
2021-01-01
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| Series: | Accounting |
| Online Access: | http://www.growingscience.com/ac/Vol7/ac_2021_68.pdf |
| _version_ | 1818873554017452032 |
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| author | Aljaaidi, Khaled Salmen Alothman, Abdulaziz Sharma, Raj Bahadur Bagais, Omar Ali |
| author_facet | Aljaaidi, Khaled Salmen Alothman, Abdulaziz Sharma, Raj Bahadur Bagais, Omar Ali |
| author_sort | Aljaaidi, Khaled Salmen |
| collection | DOAJ |
| description | This paper examines the association of the presence of royal family members on the board of directors with audit committee effectiveness. The sample of this study consists of 444 listed manufactured firms in Saudi Arabia for the period 2012-2019. Using the Pooled OLS regression, the result of the study shows that royal family ownership is associated with audit committee effectiveness, giving support to the substitution hypothesis. The result indicates that members from the royal families are good monitors imposed into the companies' managements as both taking the role of decision makers and owners who may substitute the effectiveness of the audit committee. The presence of royal family members on the board has an alternative for the effectiveness of the audit committee. The marginal effect of audit committee effectiveness as an internal corporate governance mechanism is substituted by the presence of royal family members on the board. This study provides insightful evidence to regulators and policy makers at the company and country levels on the relationship of royal family ownership and audit committee effectiveness. |
| first_indexed | 2024-12-19T12:56:33Z |
| format | Article |
| id | doaj.art-1eda35cc40ea46ca8d87341bef6ffa06 |
| institution | Directory Open Access Journal |
| issn | 2369-7393 2369-7407 |
| language | English |
| last_indexed | 2024-12-19T12:56:33Z |
| publishDate | 2021-01-01 |
| publisher | Growing Science |
| record_format | Article |
| series | Accounting |
| spelling | doaj.art-1eda35cc40ea46ca8d87341bef6ffa062022-12-21T20:20:22ZengGrowing ScienceAccounting2369-73932369-74072021-01-0198799210.5267/j.ac.2021.3.012The controlling power of royal family members on the board of directors and audit committee effectivenessAljaaidi, Khaled SalmenAlothman, AbdulazizSharma, Raj BahadurBagais, Omar AliThis paper examines the association of the presence of royal family members on the board of directors with audit committee effectiveness. The sample of this study consists of 444 listed manufactured firms in Saudi Arabia for the period 2012-2019. Using the Pooled OLS regression, the result of the study shows that royal family ownership is associated with audit committee effectiveness, giving support to the substitution hypothesis. The result indicates that members from the royal families are good monitors imposed into the companies' managements as both taking the role of decision makers and owners who may substitute the effectiveness of the audit committee. The presence of royal family members on the board has an alternative for the effectiveness of the audit committee. The marginal effect of audit committee effectiveness as an internal corporate governance mechanism is substituted by the presence of royal family members on the board. This study provides insightful evidence to regulators and policy makers at the company and country levels on the relationship of royal family ownership and audit committee effectiveness.http://www.growingscience.com/ac/Vol7/ac_2021_68.pdf |
| spellingShingle | Aljaaidi, Khaled Salmen Alothman, Abdulaziz Sharma, Raj Bahadur Bagais, Omar Ali The controlling power of royal family members on the board of directors and audit committee effectiveness Accounting |
| title | The controlling power of royal family members on the board of directors and audit committee effectiveness |
| title_full | The controlling power of royal family members on the board of directors and audit committee effectiveness |
| title_fullStr | The controlling power of royal family members on the board of directors and audit committee effectiveness |
| title_full_unstemmed | The controlling power of royal family members on the board of directors and audit committee effectiveness |
| title_short | The controlling power of royal family members on the board of directors and audit committee effectiveness |
| title_sort | controlling power of royal family members on the board of directors and audit committee effectiveness |
| url | http://www.growingscience.com/ac/Vol7/ac_2021_68.pdf |
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