Directors’ duties of care and loyalty and their enforcement by derivative action, are important elements in the company law system. Such mechanisms are introduced to ensure that directors are subject to a satisfactory level of accountability and control while managing a company. This research employed the comparative law approach to identifying problems in, and to proposing reform for, the Saudi Arabian law of directors’ duty to act with care and in good faith in the company’s general interests, and to avoid conflicts of interest, with particular focus on the corporate opportunities and self-dealing transactions and the Saudi law of derivative actions. The main objective of this study was to propose a reform of Saudi law of directors’ duties and of derivative actions. By using the company law of the United Kingdom (UK) as benchmark, this study evaluates the clarity, certainty and accessibility of Saudi law and identifies weaknesses and deficiencies. The feasibility of transplanting selective legal ideas and rules from the UK company law to its Saudi counterpart in order to develop a framework for legal reform in Saudi Arabia is examined. The argument here is that the Saudi law of directors’ duties of care and loyalty and derivative actions suffers from serious deficiencies, despite the introduction of the new Companies Law of 2015. While the new Saudi Corporate Governance Regulations 2017 have tackled some issues in the areas of directors’ duties, there is still room for improvement. The uncertainty in the law of directors’ duties and enforcement is sufficient in itself to justify the reform of law. Moreover, the limits of other legal and non-legal mechanisms of accountability in the Saudi context suggest that alternative mechanisms would not adequately ensure the accountability of directors. Throughout the examination of the feasibility of reform by way of legal transplantation, the study takes into account that the UK legal model is only transferable if it can be adapted to fit within the institutional structure and legal environment in Saudi Arabia. This is necessary to ensure proper reception of foreign rules by the new environment of the host country. The finding is that transferability of most UK legal models and rules is feasible. Throughout this consideration of a reform agenda for the Saudi law of directors’ duties and derivative actions, the research has been guided by a policy that requires striking a balance between the need to increase directors’ accountability and the need to protect the directors’ exercise of their managerial authority.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:744219 |
| Date | January 2018 |
| Creators | Aleshaikh, Abdullatif Mohammed |
| Publisher | University of Glasgow |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://theses.gla.ac.uk/30630/ |
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