This paper examines the relationship between corporate governance institutions and financial riskiness in Saudi Arabia oil and energy market, using a balanced sample of thirty companies followed across 2016-2024 (270 firm-years). The study examines the relationship between board size, independent (non-executive) director proportion, CEO duality, board gender diversity and quality of internal control systems with the measured financial risk. The secondary data were based on annual reports and exchange disclosures by the firms and a short structured questionnaire conducted on the senior managers and board members was used to develop an index of internal control quality. Some of the important control variables are firm size (log assets), firm age, leverage, and year dummies in order to appreciate macro trends. The analysis is methodologically divided into descriptive statistics, correlation diagnostics and panel regression. Random effects and fixed effects estimates, based on the Hausman test and model selection, were estimated and the robust (White-corrected) standard errors and a set of post-estimation diagnostics (VIF, Breusch-Pagan) were calculated to confirm the reliability of inferences. Conventional robustness tests used different risk measures and specification tests. Reproducible Python scripts were used to clean and plot data as the main econometric estimations were done in IBM SPSS v.26. The patterns of the empirical results are consistent. The quality of internal internal controls is found to have a negative and strong relationship with financial risk exposure among estimators, and this implies that an increase in audit functions, risk committee activity and formal control procedures prevents volatility and measurements based on default significantly. The lower measured risk is also linked to board size, especially when expansion is coupled with an increase in board competence and not with the number size. In contrast, CEO duality is positively associated with increased pooled estimates of risk, which indicates that combined CEO-chair positions can undermine oversight and opportunistic decision-making unless other governance controls are in place. These findings are strong to different specifications and resistant to various diagnostic tests. The implications of the policy and managerial issues are to focus on internal audit and risk management capacity, hire board directors who possess sectoral and risk-management skills instead of focusing on size alone, and revise governance models that concentrate executive authority. The research adds industry-specific data on one of the most strategically significant regional markets and provides viable advice to regulators, institutional investors and corporate boards in pursuit of greater financial resilience.
Abdelmotalab Dalil (Mon,) studied this question.