Critical Evaluation of Minority Shareholdersa Rights in General Shareholders Meeting under the Saudi Company Law No.1965
Generally, listed companies are controlled by two main organs: the board of directors, and general meeting (GM).1 The GM is considered the supreme authority of the company, its powers stem from the company law and from the constitution of the company; therefore, resolutions of the GM should be compatible with the provisions of company law (CL) and constitution of the company; otherwise, the resolutions shall be subject to being deemed null and void. The same applies to the board of directors, which is considered similar to the executive power of the state and has specific terms of reference; thus GM cannot interfere in the work of the board of directors and vice versa. In this vein, these two organs depend entirely on each other working together to achieve the same objectives, and therefore, balance must be struck between them. Such balance is indicated in the definition of corporate governance by the Cadbury Committee: “Corporate Governance is the system by which companies are run. At the centre of the system is the board of directors whose actions are subject to law, regulations and the shareholders in a GM. The shareholders in turn are responsible for appointing the directors and the auditors and it is to them that the board reports on its stewardship at the AGM”.
