Recent Amendments 2023-2024 and Vision 2030 Alignment

Key Developments, Development Initiative 2024-2026, and Future Transformations

First: Introduction

The Corporate Governance Regulations are not a rigid document but a living framework evolving with capital market maturity and economic transformations. Since their issuance in 2017, the Regulations have undergone multiple substantive amendments, most notably in 2021, 2023, and 2024. Each wave of amendments reflects growing awareness of governance priorities, response to market challenges, and alignment with international standards. Today, we are at a pivotal stage with the “Development of Corporate Governance Regulations” initiative scheduled for completion by 2026.

These developments occur in the context of the Kingdom’s Vision 2030, which draws a roadmap for comprehensive economic transformation. Strong governance is not an end in itself, but a tool to achieve the Vision: a developed capital market, foreign direct investment, privatization of institutions, economic diversification. Saudi companies today stand at a turning point; those who anticipate developments lead the coming phase, and those who lag lose opportunities that may not return. This article reviews the latest amendments, strategic context, and future trends.

💡  Key Insight Amendments to the Governance Regulations are not routine updates but roadmaps to the future. Each amendment reveals the coming direction: tightening independence, strengthening disclosures, expanding scope of application, attention to sustainability. Companies that read these signals and prepare for them early gain a strategic advantage. The amendment today is indicative; tomorrow it may be mandatory.

Second: Strategic Context — Vision 2030

1. Major Objectives

1.1 Economic Diversification

Transition from an oil-based economy:

• Private sector growth.
• Diversifying income sources.
• New industries (tourism, entertainment, technology).
• Entrepreneurship.

1.2 Privatization

• Offering major government companies (Aramco, STC, SABIC).
• Public Investment Fund as a driver.
• Need for world-class governance.
• Investor confidence.

1.3 Foreign Investment

• Target 5.7% of GDP.
• Strong governance requirements.
• International standards.
• Full transparency.

1.4 Capital Market

• Joining global indices (MSCI 2019, FTSE Russell).
• Liquidity growth.
• Expanding investor base.
• Continuous regulatory developments.

2. The Role of Governance

• Cornerstone of trust.
• Condition for attracting investment.
• Foundation for fair valuations.
• Driver for sustainable growth.

Third: Evolution of the Regulations Over Time

1. The Beginning (2006-2017)

1.1 First Regulations 2006

• Indicative in general.
• Basic principles.
• Modest beginning.

1.2 Regulations 2017

• Qualitative leap.
• Mostly binding.
• 83 comprehensive articles.
• Alignment with OECD.

2. 2021 Amendments

2.1 Drivers

• Strengthening internal control.
• Response to Basel 3 framework in banks.
• Evolving international standards.

2.2 Key Amendments

• Converting internal audit articles (76, 77, 78) from indicative to mandatory.
• Strengthening independence requirements (Article 20).
• Expanding definition of “relatives”.
• Strengthening Article 24 (competition and conflict of interest).

3. 2023 Amendments

3.1 Drivers

• Alignment with the new Companies Law (M/132).
• Effective 19/01/2023G.
• Comprehensive update.

3.2 Key Amendments

• Aligning terminology with the new Companies Law.
• Updating Assembly requirements.
• Strengthening shareholder rights.
• Preparation for 2024 amendments.

4. 2024 Amendments

Most substantive in recent years, effective from 01/01/2024G:

Fourth: Key 2024 Amendments in Detail

1. Board Membership Duration

1.1 The Change

• Previously: 3 years.
• Currently: 4 years.

1.2 The Effect

• Greater Board stability.
• Strategy continuity.
• Alignment with international best practices.
• Savings on costs of frequent elections.

2. Authority to Form Audit Committee

2.1 The Change

• Previously: General Assembly formed the committee.
• Currently: Board of Directors forms the committee.

2.2 The Effect

• Greater flexibility.
• Speed of amendments.
• Alignment with new Companies Law.
• Greater responsibility on the Board.

3. Internal Auditor Appointment and Dismissal

3.1 New Article 24(4)

• Internal auditor appointment by Board resolution.
• Based on Audit Committee recommendation.
• Dismissal by the same procedures.

3.2 The Effect

• Internal auditor independence.
• Protection from management pressures.
• Direct relationship with Audit Committee.
• Higher audit quality.

4. Mandatory Training

4.1 New Article 37

• Mandatory training for board members.
• For committee members.
• For executive management.
• Periodically.

4.2 Previously

• Was indicative.
• Optional.
• Many companies did not apply it.

4.3 Content

• Regulations and laws.
• Governance.
• Risk management.
• Cybersecurity.
• Developments.

5. Internal Audit Resources

5.1 New Article 52(b)(3)

• Ensuring sufficient resources for internal audit.
• Independent budget.
• Qualified cadres.
• Tools and systems.

5.2 The Effect

• Strengthening internal audit.
• Actual independence.
• Higher quality.

6. Periodic Meetings with External Auditor

6.1 New Article 54(b)

• Periodic meetings of Audit Committee with external auditor.
• Without executive management attendance.
• For open communication.

6.2 The Effect

• Frank communication.
• Early discovery of issues.
• Greater independence.

7. Parallel Market (Nomu)

7.1 Expanding Application

• Many indicative articles became mandatory.
• For companies in the Parallel Market.
• Starting 01/01/2024G.

7.2 Key Requirements

• General Assembly upon request of 10% of shareholders.
• Or upon Audit Committee request.
• Or upon external auditor request.
• Board composition requirements.
• Enhanced disclosure requirements.

📌  Note The 2024 amendments reflect the “gradual maturity” philosophy in governance. They are not sudden changes, but logical evolution building on the existing foundation. Companies that applied the Regulations in letter and spirit since 2017 found themselves aligned with most amendments. Companies that settled for the minimum found themselves facing challenges in complying with the amendments.

Fifth: “Development of Corporate Governance Regulations” Initiative 2024-2026

1. The Framework

Within CMA’s 2024-2026 strategic plan:

• Strategic initiative.
• For comprehensive Regulations development.
• Scheduled for completion by 2026.

2. Objectives

2.1 Keeping Pace with International Standards

• OECD Principles updated (2023).
• ICGN Stewardship Principles.
• ISSB Sustainability Standards.
• Global ESG standards.

2.2 Attracting Investment

• Standards satisfying international investors.
• Advanced transparency.
• Strong minority protection.

2.3 Supporting Vision 2030

• Privatization.
• Economic diversification.
• Capital market growth.

3. Expected Axes

3.1 Sustainability and ESG

• Mandatory disclosure requirements.
• Regulatory framework for sustainability.
• Climate standards.
• Standardized ESG reports.

3.2 Diversity

• Board diversity requirements.
• Women’s representation.
• Professional and cultural diversity.
• Disclosures.

3.3 Digital Governance

• Cybersecurity.
• Data protection.
• Artificial intelligence.
• Remote governance.

3.4 Strengthening Independence

• More rigorous criteria.
• Expanding definitions.
• Higher requirements.

3.5 Disclosures

• Expanding requirements.
• With higher quality.
• With international standards.

Sixth: Transformations in Disclosure and Sustainability

1. Growth in Environmental and Social Disclosures

1.1 Statistics

According to OECD 2025 report:

• 94 companies disclosed sustainability practices in 2024.
• Growth from 76 companies in 2023.
• In the largest 100 Main Market companies: 65% disclosed (compared to 58% in 2023).
• Accelerating growth.

1.2 Expected Evolution

• Mandatory disclosures gradually.
• ISSB standards.
• Specified climate standards.
• By 2026: comprehensive framework.

2. Alignment with International Standards

2.1 ISSB Standards

• IFRS S1 and IFRS S2.
• Sustainability-related financial disclosures.
• Climate disclosures.
• Increasing global application.

2.2 TCFD

• Task Force on Climate-related Financial Disclosures.
• Climate disclosures.
• Governance, strategy, risk management, metrics.

2.3 GRI and SASB

• Globally adopted standards.
• In many Saudi companies.

3. Alignment with Vision 2030

3.1 Saudi Green

• Planting 10 billion trees.
• Carbon neutrality by 2060.
• 50% renewable energy by 2030.
• Impact on company requirements.

3.2 Middle East Green

• Regional initiative.
• Regulatory effects.
• Company commitments.

Seventh: Transformations in Board Diversity

1. Global Trend

1.1 Mandatory Requirements

• European Union: 40% of the less represented gender by 2026.
• UK: disclosure requirements.
• USA (Nasdaq): diversity requirements.

1.2 Indicators

• MSCI ESG ratings.
• Sustainalytics.
• Bloomberg Gender Equality Index.

2. Developments in Saudi Arabia

2.1 Current Framework

• Encouraging diversity.
• Voluntary disclosures.
• No mandatory requirements currently.

2.2 Statistics

• Women percentage in boards increasing.
• In large companies: noticeable improvement.
• In financial companies: female leaders.

2.3 Expectations

• Expected evolution toward mandatory requirements.
• Within 2024-2026 initiative.
• Aligned with Vision 2030 (women empowerment).

Eighth: Digital Governance

1. Transformations

1.1 Cybersecurity

• Increasing threats.
• Board responsibility.
• Disclosures.

1.2 Data Protection

• Personal Data Protection Law.
• Obligations.
• Penalties.

1.3 Artificial Intelligence

• AI governance.
• Ethics.
• Disclosures.

2. Future Requirements

2.1 Cybersecurity Committee

• Optional currently.
• May become mandatory.
• In sensitive sectors.

2.2 Cyber Disclosures

• Incidents.
• Investments.
• Readiness.
• International standards.

Ninth: What Should Companies Do Now?

1. Full Compliance with Current Amendments

1.1 2024 Amendments

• Verifying full application.
• Updating policies.
• Training members and management.
• Documenting compliance.

1.2 Self-Review

• Comprehensive review of the Regulations.
• With amendments.
• Identifying gaps.
• Remediation plan.

2. Anticipation of Future Amendments

2.1 Sustainability

• Starting voluntary disclosures.
• Adopting ISSB standards.
• Building data infrastructure.
• Qualifying the team.

2.2 Diversity

• Board diversity policies.
• Qualifying candidates.
• Voluntary disclosure.

2.3 Digitalization

• Investment in cybersecurity.
• Dedicated committee or officer.
• Disclosures.

3. Building Capabilities

3.1 Training

• For members and management.
• On amendments.
• On international developments.
• Regular.

3.2 Technology

• Advanced governance systems.
• Disclosure platforms.
• Risk management tools.
• Analytics.

3.3 Cadres

• Specialized governance officer.
• Sustainability officer.
• Cybersecurity officer.
• Multiple competencies.

Tenth: Opportunities for Anticipating Companies

1. Competitive Advantage

1.1 Attracting Investment

• Investors prefer governance companies.
• Governance premium in valuation.
• Higher liquidity.

1.2 Lower Cost of Financing

• Banks prefer governance companies.
• Better financing terms.
• Lower cost of capital.

1.3 Reputation

• Building strong reputation.
• Trust from all stakeholders.
• Long-term advantage.

2. Preparation for Privatization and Listings

2.1 Privatization

• Government companies heading toward privatization.
• Need strong governance.
• Opportunity for consultants and competencies.

2.2 Future Listings

• Aramco 2.
• Other government companies.
• Major family companies.
• Growth environment.

3. Joining Global Indices

3.1 Trends

• MSCI and FTSE Russell.
• ESG indices.
• Rigorous requirements.
• Qualified companies benefit.

Eleventh: Expected Challenges

1. “Pace of Change” Challenge

1.1 Successive Amendments

• 2021, 2023, 2024, 2026.
• Difficulty keeping pace.

1.2 The Solution

• Systematic follow-up.
• Governance officer.
• Specialized consultations.
• Continuous updating.

2. “Competencies” Challenge

2.1 Competency Scarcity

• In specialized governance.
• In sustainability.
• In cybersecurity.

2.2 The Solution

• Qualification.
• Recruitment.
• Specialized institutes.
• Professional certifications.

3. “Cost” Challenge

3.1 Required Investments

• In cadres.
• In technology.
• In consultations.

3.2 The Solution

• Looking at long-term investment.
• Measuring return.
• Strategic benefits.

4. “Culture” Challenge

4.1 Compliance Culture

• In some companies: formal.
• In family sector: special challenges.

4.2 The Solution

• Role model from the top.
• Continuous education.
• Incentives.
• Patience.

Twelfth: Future Reading

1. Post-2026

1.1 New Framework

• Comprehensive updated regulations.
• Aligned with international standards.
• Ready for challenges.

1.2 Capital Market

• More developed.
• Global attractiveness.
• High liquidity.
• World-class companies.

2. Global Trends

2.1 ESG

• Complete transformation in disclosures.
• Mandatory standards.
• Standardized metrics.

2.2 Artificial Intelligence and Governance

• AI in governance (Reg Tech).
• Advanced analytics.
• Early risk discovery.
• Compliance automation.

2.3 Social Governance

• Diversity and inclusion.
• Human rights.
• Supply chain.
• Social impact.

3. Saudi Arabia in 2030

3.1 Position

• Capital market in the top 10 globally (goal).
• Diversified economy.
• Record foreign investment.

3.2 Governance

• Global standards.
• Entrenched culture.
• Model companies.
• Competitive advantage.

Thirteenth: Best Practices for Preparation

1. At the Strategy Level

• Long-term vision: for governance as strategic advantage.
• Investment: in cadres and systems.
• Anticipation: of developments.
• Excellence: instead of the minimum.

2. At the Application Level

• Full compliance: with current amendments.
• Voluntary disclosures: for sustainability and diversity.
• International standards: in disclosures.
• Continuous development: of policies.

3. At the Cadre Level

• Specialized officers: governance, sustainability, cyber.
• Continuous training: for members and management.
• Professional certifications: (CGI, GIA, ESG).
• Consultations: specialized.

4. At the Culture Level

• Governance as value: not a burden.
• Role model from the top: for everyone.
• Continuous learning: from best practices.
• Openness: to developments.

Conclusion

The Corporate Governance Regulations in the Kingdom of Saudi Arabia are experiencing a pivotal stage. Recent amendments 2023-2024 raised standards, and the ongoing development initiative through 2026 will achieve another qualitative leap. These developments are not isolated, but part of a comprehensive vision to transform the Kingdom into a global economic and financial center. Strong governance is not an end in itself, but a tool to achieve the greater vision.

Saudi companies stand today at a real turning point. They have an exceptional opportunity: anticipating developments, adopting the highest standards, and benefiting from coming growth. Companies that view governance as a strategic advantage, invest in cadres and systems, adopt international standards, and build compliance culture from the top, will be at the forefront of the coming phase. With 2024 amendments applied, the 2026 initiative coming, and ESG requirements on the horizon, the time is now to act. Advanced governance is the entry ticket to the future of the prosperous Saudi capital market.

🎯  Essential Points to Remember (1) Governance Regulations continuously evolve: 2017, 2021, 2023, 2024, and 2026 initiative. (2) 2024 amendments effective 01/01/2024: Board duration 4 years, audit committee from Board, internal auditor appointment by Board resolution, mandatory training, sufficient audit resources, periodic meetings with auditor. (3) Parallel Market (Nomu) witnessed substantive expansion of requirements. (4) “Development of Corporate Governance Regulations” initiative 2024-2026 within Authority’s strategic plan. (5) Expected axes: sustainability, diversity, digital governance, strengthening independence. (6) Growth in environmental and social disclosures: 65% of largest 100 companies in 2024. (7) ESG requirements coming strongly — adopt ISSB Standards and TCFD. (8) Vision 2030 the larger context: privatization, diversification, foreign investment. (9) Anticipating companies: competitive advantage, lower financing costs, strong reputation. (10) The time is now to invest in advanced governance — the amendment today is indicative, tomorrow mandatory.

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FAQS

What are the most significant phases in the evolution of the Corporate Governance Regulations?

They began as indicative regulations in 2006, took a qualitative leap with 83 mostly binding articles in 2017, were strengthened in 2021 to enhance internal control, aligned with the new Companies Law in 2023, underwent the most substantive amendments in 2024, and are now subject to a comprehensive development initiative scheduled for completion by 2026.

What changed regarding board membership duration in the 2024 amendments?

The membership term increased from 3 years to 4 years effective 1 January 2024, providing greater board stability, continuity of strategy, alignment with international best practices, and savings on the costs of frequent elections.

Who now has the authority to form the Audit Committee after the 2024 amendments?

The Board of Directors now forms the Audit Committee instead of the General Assembly as was previously the case, providing greater flexibility and speed in amendments while aligning with the new Companies Law and placing greater responsibility on the Board.

References and Sources

• Corporate Governance Regulations and its amendments 2017-2024.
• Amendments to Governance Regulations 2023 and 2024 (effective from 01/01/2024).
• CMA Strategic Plan 2024-2026.
• Saudi Companies Law (M/132).
• Saudi Vision 2030 — Financial Sector Development Program.
• OECD Corporate Governance Factbook 2025 — Saudi Arabia.
• OECD Principles of Corporate Governance (Revised 2023).
• ISSB IFRS Sustainability Disclosure Standards.
• Tadawul Sustainability Disclosure Statistics 2024.
• Baker McKenzie & PwC — Analysis of CMA Amendments 2023-2024.