Saudi Governance Advances as GCC Connectivity and Digital Growth Accelerate
Governance, Gateways and Growth: CMA Moves to Empower Shareholders as GCC Rail Nears Signing, Business Revenues Reach SAR 5.6 Trillion and Internet Penetration Hits 99.6%
This week the Kingdom's progress registered across markets, infrastructure, enterprise and the digital economy. The Capital Market Authority opened a 30-day consultation, closing on 28 November, on a framework to strengthen listed company boards and empower shareholders, from a 5% threshold for in-person general assemblies to an independent chair for every audit committee. Gulf Cooperation Council states are set to sign the General Agreement for the GCC Railway Link in Bahrain on 8 November, advancing a 2,117 km network from Kuwait to Muscat with Dammam at its hub. The General Authority for Statistics reported business sector operating revenues up 2.3% to SAR 5,628 billion in 2025, with employee compensation rising 6.0%, and its 2026 ICT survey placed internet penetration at 99.6%, with 98.4% of individuals using digital government services and 74.5% of internet users shopping online.
Governance: CMA Opens Consultation to Strengthen Listed Company Boards and Empower Shareholders
The Capital Market Authority has invited market participants and the wider public to comment on its draft framework to enhance the governance of listed companies and empower shareholders, through a 30-day consultation closing on 18/06/1448H, corresponding to 28 November 2026. The draft is designed to develop governance practices across listed companies, raise the effectiveness and accountability of their boards, widen shareholder participation in the decisions of the companies they invest in and lift transparency, by updating the provisions on general assemblies, board nominations, companies with accumulated losses and related party transactions. Comments are submitted through Istitlaa, the unified public consultation platform of the National Competitiveness Center.
At general assemblies, shareholders holding at least 5% of voting shares would be able to request an in-person meeting held alongside the virtual one, with the board required to respond, and the Authority would gain the power to require in-person assemblies whenever it sees fit. Companies with accumulated losses of 50% or more of capital would disclose on Saudi Exchange the names and holdings of every shareholder owning 1% or more, or the 20 largest shareholders, whichever is greater; holders of 5% could table a loss remediation plan, to be disclosed within 60 days of the assembly resolution, and the board would then publish monthly or quarterly progress reports within five days of each period end, setting out delivery against targets, the reasons for any deviation, the corrective steps taken and any amendments to the plan, until losses fall below 20% of capital. The draft also widens the scope of related parties covered, strengthens the role of audit committees and boards in verifying the fairness of those transactions, requires nomination committees to document the reasons for rejecting candidates and give them time to complete their applications, and requires every audit committee to be chaired by an independent member.
The read-through for allocators is a market raising its governance standard in step with its ambition for deeper institutional ownership. A defined 5% threshold for in-person assemblies and agenda items gives active owners and stewardship investors a clear, rules-based lever, while independent audit chairs, tighter related party controls and documented nomination decisions address precisely the board quality questions that global mandates weigh when sizing Saudi allocations. The accumulated losses regime stands out: monthly or quarterly reporting against stated targets turns a turnaround into a measurable, disclosed process, giving shareholders visibility on recovery paths and supporting a sharper, better informed valuation of special situations on the Exchange.
Infrastructure: GCC States to Sign the General Railway Agreement on 8 November, Advancing a 2,117 km Network From Kuwait to Muscat
Gulf Cooperation Council states are preparing to sign the General Agreement for the GCC Railway Link at the meeting of transport and communications ministers hosted by Bahrain on 8 November, a step aimed at accelerating delivery of the project and deepening connectivity across the region. Speaking to Asharq Bloomberg's Mohammed Al-Baz on the opening day of the fourth edition of Gateway Gulf Forum 2026 in Manama on Sunday, Bahrain's Minister of Transportation and Telecommunications Shaikh Abdulla bin Ahmed Al Khalifa said that accelerating the GCC railway has become one of the most important priorities of the current phase, both bilaterally between Bahrain and Saudi Arabia and across the GCC as a whole. He pointed to stronger coordination between member states and to important milestones already delivered, including the establishment of the GCC Railway Authority and work on the legislative framework the project requires.
According to the GCC General Secretariat, the proposed network extends for around 2,117 kilometres, linking Kuwait City with the Omani capital Muscat through the Council's member states. The route runs from Kuwait to Dammam in Saudi Arabia and on to Bahrain, with a branch from Dammam to Qatar through the Salwa crossing that also connects Qatar and Bahrain; it then continues into the UAE through Abu Dhabi and Al Ain before reaching Muscat via Sohar. Passenger trains are expected to run at around 220 kilometres per hour and freight trains at 80 to 120 kilometres per hour, with diesel used to generate electric traction and common railway standards applied across axle loads, signalling, communications, operations and maintenance to ensure seamless interoperability between member states.
What this changes for capital is the status of the GCC railway, which moves from a long-dated vision to a signed regional commitment with a dedicated authority and a legislative framework behind it. A single 2,117 km corridor with shared standards creates one addressable market for rolling stock, signalling, systems integration and long-term operations and maintenance contracts, and Dammam's position as the hub for the Kuwait, Bahrain and Qatar links places the Kingdom's Eastern Province at the centre of the network. For logistics, the freight specification connects Gulf ports, industrial cities and free zones over land, extending the reach of Saudi logistics and manufacturing platforms across a combined regional economy and widening the pipeline of public-private partnership opportunities in transport infrastructure.
Business Economy: GASTAT Reports Operating Revenues Up 2.3% to SAR 5.6 Trillion in 2025 as Employee Compensation Rises 6.0%
The General Authority for Statistics released the results of its Structural Business Statistics 2025, showing that operating revenues across the Kingdom's business sector rose 2.3% on the previous year to SAR 5,628 billion. The survey provides detailed indicators on the structure of economic activity in the Kingdom, covering operating revenues and expenditures alongside compensation of employees, with the data classified according to the International Standard Industrial Classification of All Economic Activities (ISIC4).
Compensation of employees grew 6.0% to SAR 624.1 billion, of which SAR 528.9 billion, or 84.8%, went to salaries and wages and SAR 95.1 billion, or 15.2%, to benefits and allowances. Gross fixed capital formation reached SAR 992 billion, up 0.4%, while the gross operating surplus held essentially steady at SAR 2,542 billion, within 0.1% of the prior year, keeping the sector's operating surplus at around 45% of revenues.
The data reads as a business sector that is growing its top line while sharing more of that growth with its workforce. Compensation rising 6.0%, well ahead of the 2.3% revenue gain, points to a deepening labour market and firmer household incomes, which in turn underpin the consumer, retail, housing and financial services demand that domestic platforms are building against. Close to SAR 1 trillion of annual fixed capital formation, equivalent to almost 18% of operating revenues, shows companies continuing to invest in capacity at scale, and an operating surplus maintained at roughly 45% of revenues through the year confirms that the sector is absorbing a higher wage bill from a position of strength. With results now published on an ISIC4 basis, investors also gain a consistent, internationally comparable lens for sizing sectors and benchmarking Saudi businesses against global peers.
Digital Economy: GASTAT Reports 99.6% Internet Penetration in 2026, With 98.4% Using Digital Government Services and 74.5% Shopping Online
Internet usage in Saudi Arabia reached 99.6% among individuals aged 15 to 74 in 2026, according to the General Authority for Statistics' 2026 ICT Access and Usage by Households and Individuals Survey, reported by the Saudi Press Agency. Saudi men recorded a rate of 99.8% and Saudi women 99.5%, with the 15 to 24 age group the most connected at 99.9%. Some 99.3% of individuals access the internet at home and 98% go online at least once a day, while mobile phones are the leading access device at 98.4%, well ahead of laptops at 13.9% and tablets at 12.3%.
Social networking leads online activity at 99.7% of internet users, with equal rates among men and women, followed by searching for information on goods and services at 65.4%; 87.8% watch video content online, 55.2% listen to audio content and 19.4% play games. Digital government is near universal, with 98.4% of individuals using online government services, rising to 98.6% among Saudi nationals, and electronic government forms the most used service at 89%. In e-commerce, 74.5% of internet users buy goods and services online, rising to 84.9% among Saudi internet users, with Saudi women ahead at 86.8% against 83.1% for Saudi men. Clothing, footwear, sports goods and household items lead purchases at 85.2%, followed by food and groceries at 54.4% and books, magazines and newspapers at 22.8%. GASTAT produces the statistics under a unified methodology aligned with international organisations, enabling cross-country comparison and meeting Sustainable Development Goals reporting requirements.
What the survey confirms is a fully connected, mobile-first consumer base, and the opportunity now shifts from adding users to deepening engagement. With 98.4% accessing the internet by phone and 98% online every day, the mobile channel is effectively the default storefront, bank branch and government counter, which favours app-native models in payments, lending, insurance and retail. The e-commerce data is the clearest growth signal: 84.9% of Saudi internet users already shop online, women lead adoption at 86.8%, and groceries at 54.4% show digital purchasing extending from discretionary categories into everyday spending, a profile that supports logistics, last-mile delivery and quick commerce platforms. Near universal use of digital government services, alongside 87.8% engagement with online video, adds a trusted digital identity layer and a deep content and advertising market for platforms to build on.
Read together, the week describes an economy upgrading the institutions, networks and markets through which capital is deployed. The CMA is raising governance standards and widening shareholder voice on the Exchange; the Gulf is moving its railway from blueprint to signed agreement, with the Kingdom's Eastern Province at the centre of the network; the business sector is growing revenues, investing close to SAR 1 trillion a year in fixed capital and lifting pay faster than sales; and a fully connected, mobile-first population is shifting its spending, its services and its engagement with government online.
The thesis sharpens: Saudi Arabia is pairing stronger market governance with regional connectivity, a growing enterprise base and near universal digital adoption, and that combination of better-governed listed companies and deeper domestic demand is what positions the Kingdom's capital markets for their next phase of institutional depth.
Sources
· Capital Market Authority (CMA), public consultation on the draft framework to enhance the governance of listed companies and empower shareholders: general assemblies, accumulated losses, related party transactions, board nominations and audit committee independence, via the Istitlaa platform of the National Competitiveness Center, October 2026
· GCC General Secretariat / Shaikh Abdulla bin Ahmed Al Khalifa, Minister of Transportation and Telecommunications of Bahrain, via Asharq Bloomberg at Gateway Gulf Forum 2026, Manama: General Agreement for the GCC Railway Link, route, train speeds and technical standards, November 2026
· General Authority for Statistics (GASTAT), Structural Business Statistics 2025: operating revenues, compensation of employees, gross fixed capital formation and gross operating surplus, classified by ISIC4, November 2026
· General Authority for Statistics (GASTAT), via the Saudi Press Agency (SPA), 2026 ICT Access and Usage by Households and Individuals Survey: internet penetration, access devices, online activities, digital government services and e-commerce, November 2026
