Abstract/Summary

As awareness of the importance of CG has grown, it has received increasing attention from academic researchers, regulators and public policy makers, first in developed and latterly in developing countries. As yet, however, CG research in the MENA region is still relatively rare. This research seeks to address this gap by investigating CG and accountability practices in the listed companies of one MENA country: Libya. The study draws on data gathered from internal and external stakeholder groups to explore how CG and accountability are perceived, the extent to which CG mechanisms are being implemented, the current state of accountability practice and whether the current legal and regulatory framework of CG and accountability is adequate. Lastly, it investigates which factors these stakeholders perceive as having the most influence on CG and accountability in the Libyan environment. The research employed a mixed methods research design comprising a quantitative survey followed by semi-structured, qualitative interviews. This allowed for methodological triangulation, enhancing the reliability of the findings; the semi-structured interviews were conducted after the questionnaire survey in order to confirm the earlier quantitative findings and to provide deeper understanding. The findings suggest that stakeholders in Libyan listed companies are generally aware of and understand the concept of CG. Despite this, however, the perception in all stakeholder groups was that awareness of CG issues within the Libyan environment is currently inadequate. The results demonstrate that Libyan listed companies are generally committed to implementing CG mechanisms, but that there are significant weaknesses in terms of practice. Listed companies‟ commitment is most evident in their adherence to the LCGC‟s (2007) requirements regarding the board of directors mechanism. In contrast, the level of disclosure and transparency in these companies is barely satisfactory, since at present, disclosure and transparency practices in Libya are designed only to meet local requirements. Listed companies have also taken practical steps towards meeting the LCGC‟s requirements regarding the internal and external audit mechanisms, but the general view among stakeholders was that these mechanisms are currently not robust enough to ensure strong internal control systems. Majority shareholders were seen to enjoy much greater protection, both legally and in practice, than minority shareholders. The findings indicate that Libya does not currently have a legal/regulatory framework that supports CG and accountability practices, but the interviewees were almost unanimous in identifying the lack of knowledge and awareness about CG at all company levels as the biggest factor inhibiting the advance of CG. The weakness of the legislative environment was seen as the second most influential factor, followed by the weakness of Libya‟s accountability mechanisms. The results suggest that both internal and external stakeholders are well aware of the concept of accountability, but that they see it as largely non-existent within Libyan listed companies in practice.