Characteristics of Banking Sector in Saudi Arabia Saudi Arabia’s banking sector is among the world’s fastest-growing markets. This development can be attributed to the sound government policies and the advancement of technology which has enabled the sector to boom during the global downturn that affected the globe. In the last couple of years, there have been several changes in the banking sector which include the introduction of more banks offering services such as Islamic banking, the emergence of foreign investors investing in the kingdom, and the introduction of new services and products to consumers. According to Wilson (1993), Saudi Arabian banks are considered to be among the most stable and safest as compared to the other sectors of the economy such as manufacturing, construction and agriculture. Uddin (2008) also emphasizes that “banking sector was found to have the highest level of corporate governance disclosure while the industry and service sectors have the lowest level about corporate governance” (p. 4).In this respect, the Saudi government should provide more effective solutions to liberalize the market in ways that resemble banking in Western countries. Importance of corporate governance in the Banking Sector Similar to Wilson (1999), Hopkins and Gross (2009) emphasize that the study of corporate governance is of great importance because it highlights checks and balances that are to be employed for the particular organization to grow. Due to the fact that the banking sector in Saudi Arabia is a critical component of the kingdom’s economy, it underscores the necessity for introducing effective corporate governance strategies. Along with this discussion, Tricker (1984) insists on the fact that corporate governance is aimed at assuring the investors that they get a return. Good economic growth can only be realized if there are proper mechanisms’ that will ensure effective utilization of resources. With regard to this, Du Plessis et al. (2005) state that corporate governance should be directed at providing the standard operating procedures to carry out the established tasks. Secondly, the researchers believe that the banks provide inter-temporal risk aversions as well as insurance to depositors to guard against unexpected shocks that are controlled by the CMA. It is the prerogative of the bank management to scrutinize the creditworthiness of an enterprise. Haspeslagh (2010) and Mallin (2007) point out that this can be achieved through ceiling loopholes that might lead to bad debts. In fact, corporate governance will prevent bank managers from coercing enterprise owners to default on repayments in terms of rules and regulations. Saudi Arabian’s Bank Regulations Sources Saudi Arabia’s banking sector law is benchmarked on Shariah law (and regulated by various laws such as the capital market laws (Choudhury & Hoque, 2006). It is also subject to the Saudi Arabian Banking Control Law and monitored by the Saudi Arabian Monetary Agency (Al-Amri, n.d., p. 9). In addition, Al-Amri (n. d.) discusses that there are no serious prohibitions on fund lending carried out by non-Saudi banks and, therefore, businesses are allowed to receive financial support from international banks. Roles and Responsibilities of the Board of Directors The main roles of the board of directors include maintaining the main objectives and approving the strategic plans of the bank, supervising the rules of internal control (Lee, 2007). This will include ensuring that contro