Unpacking corporate governance in Saudi Arabia – Part 2: Disclosure, enforcement, and the critical role of legal counsel

Following recent legal reforms in Saudi Arabia, our second instalment in the corporate governance series delves deeper into the mechanisms that underpin transparency, accountability, and enforcement within the Kingdom’s corporate sector.

Previously, we explored the rights and responsibilities of shareholders and management, with an emphasis on legal reforms aimed at strengthening corporate accountability and investor protection. Building on that foundation, this second article shifts the focus to disclosure obligations, enforcement mechanisms, and the increasingly strategic role of legal counsel in safeguarding corporate integrity.

Key highlights

• Strengthening disclosure standards – Disclosure is a cornerstone of good governance. The article outlines the statutory obligations placed on Joint Stock Companies (JSCs) to disclose potential conflicts of interest, remuneration policies, risk exposures, and related-party transactions, particularly for listed companies regulated by the Capital Market Authority. These standards aim to build investor trust and promote fair, transparent markets.
• Enforcement and accountability – The Companies Law outlines a comprehensive range of penalties for non-compliance, from substantial fines to criminal sanctions for serious offenses such as false financial reporting and misuse of company funds. The judicial system plays a central role in enforcement, with the Companies Law expanding the possibility for derivative action, especially for minority shareholders seeking redress.
• The evolving role of lawyers – Lawyers are now vital actors in corporate governance—not only guiding incorporation and structure but also (i) ensuring regulatory compliance, (ii) advising on fiduciary duties and conflict disclosures, (iii) structuring management and shareholder protections, and (iv) representing clients in governance-related litigation and dispute resolution.

Together, these developments underscore a maturing corporate governance landscape in Saudi Arabia—one where transparency is mandated, accountability is enforceable, and legal counsel plays an increasingly strategic role in safeguarding corporate integrity.

Why it matters

As Saudi Arabia’s Vision 2030 drives greater transparency and economic diversification, businesses must adapt to a governance framework that demands both rigor and accountability. This two-part series serves as a valuable resource for boards, executives, compliance officers, and investors seeking to understand – and anticipate – the legal landscape shaping corporate behaviour in the Kingdom.

Explore the series

• Part 1 – Understand the evolving rights and responsibilities of shareholders and management – click here.
• Part 2 – Dive deeper into disclosure obligations, enforcement mechanisms, and the role of legal counsel – click here.

By: Ellen Ray

Edoardo Betto from ZH Partners contributed to this article.