Effectiveness of Corporate Governance in Rationalizing Financial Decisions in Economic Enterprises: A Case Study of Algerian Insurance Companies

Abstract

This paper aims to assess the effectiveness of corporate governance in rationalizing financial decision-making within economic organizations. To explore the research questions and validate the hypotheses, a descriptive-analytical methodology was applied, utilizing SPSS for data analysis. The data were obtained via a questionnaire distributed among 43 participants, comprising members of the Board of Directors, the General Manager, and employees across various directorates. A comprehensive census approach was adopted due to the limited sample size. The findings underscore the Board of Directors' significant authority and influence in activating governance mechanisms. As the primary decision-making entity, the board's commitment to transparency and accountability is crucial for reducing uncertainties and avoiding unsound decisions. An internally reviewed system annually refines the board's roles, enhancing decision-making and ensuring shareholder participation in pivotal management decisions, thereby keeping them well-informed about their investments.