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The Role of Audit Committee Characteristics In Enhancing Banks Performance: Evidence Form Saudia Arabia
ALghamdi, Mais
ALghamdi, Mais
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Abstract
The role of audit committees in the banking sector has gained attention,
especially in Saudi Arabia, where the banking industry is crucial for
economic stability and growth. This research aims to evaluate the
relationship between audit committee characteristics, such as independence,
size, and financial expertise, and the financial performance of banks listed
on the Saudi Stock Exchange (Tadawul) from 2018 to 2024. The study uses
a quantitative methodological approach and focuses on key performance
indicators, primarily Return on Assets (ROA). Results show a positive
correlation between audit committee independence and bank performance,
suggesting greater independence enhances monitoring function and mitigates
agency conflicts. However, the study also highlights the need for optimizing
audit committee size to prevent inefficiencies and the presence of members
with substantial financial expertise to improve performance outcomes. The
research concludes that strengthening audit committee independence and
promoting financial expertise are essential steps banks can take to strengthen
their governance frameworks.