Impact of Strategic Financial Planning, Corporate Governance, and Capital Structure Optimization on Firm Performance: Evidence from Saudi Arabia’s Corporate Sector

Abstract

Purpose— his study investigates how strategic financial planning, corporate governance, and capital structure optimization collectively influence firm performance in Saudi Arabia’s corporate sector. The research aligns with the national Vision 2030 objectives emphasizing transparency, accountability, and sustainable financial growth.

Study Design/methodology/approach— A quantitative research design was adopted, collecting data from 300 senior finance and strategy professionals working in large diversified business groups across Riyadh and Jeddah. Structural Equation Modeling (SEM) was applied to test the hypothesized relationships among the constructs of strategic financial planning, corporate governance, capital structure, and firm performance.

Findings— Results reveal that strategic financial planning significantly enhances firm performance through improved forecasting accuracy, effective resource allocation, and long-term value creation. Corporate governance positively influences outcomes by reinforcing board oversight, ethical compliance, and accountability. Moreover, capital structure optimization—achieved through a balanced mix of debt and equity promotes financial stability and investor confidence. Together, these factors create an integrated framework for achieving financial agility and operational excellence in Saudi corporations.

Research Practical Implications The findings offer practical insights for chief financial officers, financial strategists, and policymakers seeking to strengthen governance-driven performance systems in alignment with Saudi Vision 2030. Emphasizing strategic integration across financial planning, governance, and capital decisions can drive corporate sustainability and competitive advantage.

Originality/value— This research contributes to the growing literature on strategic financial management in emerging economies by providing empirical evidence from Saudi Arabia. It highlights how interconnected financial and governance practices enhance firm performance within the unique context of national economic transformation

K e y w o r d s: Strategic Financial Planning, Corporate Governance, Capital Structure, Firm Performance, and Saudi Arabia