ارتباط بین اداره شرکت ها و عملکرد شرکت: شواهد از کشورهای عضو شورای همکاری خلیج فارس On the relationship between corporate governance and firm performance: Evidence from GCC countries

1. Introduction The term “corporate governance” documented by Richard Eells (1960, p.108) to signify “the structure and functioning of the corporate polity” started cornering attention after the nineteenth century with the occurrence of two major events. Firstly, during the wave of financial crises in 1998 in Russia, Asia and Brazil, substandard corporate behavior and deficiencies in corporate governance (CG) endangered world economic and geo-political set up. Secondly, after 2001 several self-inflicted scandals such as Enron, Satyam Computers and Banco Espirito Santo scandals to name a few, tarnished the already defective corporate fabric thus destabilizing the global financial system further. The former woes were further exacerbated by the global economic crisis of 2007 which invited rigid public, political and regulatory scrutiny on the incumbent CG practices of world-wide companies. More recently, turbulent volatilities in the global oil market, political turmoil in the Middle East and the uncertainties associated with Brexit and US presidential policies have necessitated, economic diversification in the GCC as a survival imperative rather than a success mantra. However, the enlisted former are just indicators of a myriad of fundamental reasons as to why CG has become a pivotal concern for global sustainable development and prosperity (Becht, Bolton, & Roell, 2002). Although CG systems differ throughout the world, stakeholders presume that certain mechanisms must be present in order to minimize the issues of misconduct, bribery and corruption by ensuring corporate disclosure and transparency. “CG is thus framed to perform a system of supervision that uses techniques like board structure, duality, reporting, and remuneration to provide shareholders with the necessary information necessary to hold management liable for their decisions.”(AlMalkawi & Pillai, 2012) 3 A close scrutiny of the definitions unveiled from various scholar group the different school of thoughts as either considering CG as a shareholder based (Imam & Malik, 2007; Zingales, 1998; Shliefer & Vishney, 1997; Hart, 1995) or stakeholder based concept (Monks & Minnow, 2003; Morrin & Jarrel, 2001; Tricker, 1994). In fact the former two approaches stem from the three main governance models namely the Anglo-Saxon model, the German model and the Japanese model of CG. The Anglo-Saxon model is also called the unitary board model. In the GCC context, for example, the Saudi model of CG has been influenced by the Anglo-American model, generally referred to as a “market model” or “shareholder model,” which focuses on maximizing owners’ wealth. The Japanese/German model on the contrary is a two tier model and central to the German system is good industrial relations (Charkham, 1994). However, Ungureanu (2008) remarks that no model of governance is perfect and their rational application is dependent on the legal and cultural background of the country studied, dominance of capital markets and the form of business organization present.