The Impact of the Board of Directors on Earnings Management in Saudi Family Businesses: A Pre- and Post-COVID-19 Pandemic Study

Madhawi Alknani (), Nafisah Yami () and Suhaib B. Bani Kinana
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Madhawi Alknani: Imam Mohammad Ibn Saud Islamic University
Nafisah Yami: King Saud University
Suhaib B. Bani Kinana: Hashemite University

A chapter in Innovative Law and Business in the Digital Era, 2025, pp 11-19 from Springer

Abstract: Abstract This research examines the role of board characteristics related to independent directors and board size in Saudi family businesses on earnings management practices and compares them before and after the Corona pandemic, so that it concludes that family businesses dominate the Saudi economy and focus on ownership, thus facing unique and diverse governance challenges. Pre-pandemic findings reveal that large board sizes significantly constrained earnings management practices, underscoring the importance of diverse experience and governance. Conversely, the presence of outside independent directors had a limited impact, likely due to family ownership structures. Post-pandemic, neither board size nor independent directors significantly mitigated earnings management practices. The shift to virtual operations during the COVID-19 pandemic challenged boards’ oversight capabilities, as did regulatory extensions to financial reporting disclosures.

Keywords: Independent directors; Board size; Earnings management Saudi family businesses COVID-19 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-96-5773-5_2

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DOI: 10.1007/978-981-96-5773-5_2

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