Govern Ace

7/28/2019 Govern Ace

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Shahbaz haider (35)Usama iftekhar (28)


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Corporate governanceRefers to the system by which

corporations are directed and controlled.

The governance structure specifies thedistribution of rights and responsibilities

among different participants in the

corporation.


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SURVEY CORPORATE GOVERNANCE

PRACTICES IN PAKISTAN

A roundtable was held on 26 July at the

Marriott Hotel, Karachi to discuss the key

findings of the draft report of the Survey ofCorporate Governance Practices in Pakistan


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The survey has been commissioned by the

International Finance Corporation,

Securities and Exchange Commission ofPakistan and Pakistan Institute of

Corporate Governance and conducted by

ACCA Pakistan. This survey is expected to

provide a baseline for future corporategovernance reforms and initiatives under

the IFCs Pakistan Corporate Governance

Project.


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Contemporary corporate governance started in 1992

with the Cadbury report in the UK

Cadbury was the result of several high profile

company collapses is concerned primarily with protecting weak and

widely dispersed shareholders against self-interested

Directors and managers


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Shareholders those that own the company

Directors Guardians of the Companys

assets for the Shareholders

Managers who use the Companys assets


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Primarily concerned with public listedcompanies i.e. those listed on a StockExchange

Focused on preventing corporate collapsessuch as Enron, Polly Peck and the Maxwellcompanies


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What relevance does it have to Africa wherethere are few public listed companies

Most companies are non-listed, privatefamily owned businesses where theshareholders and the managers are oftenthe same people


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Accountability

Fairness

Transparency

Independence


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Ensure that management is accountable tothe Board

Ensure that the Board is accountable toshareholders


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Protect Shareholders rights

Treat all shareholders including minorities,

equitably

Provide effective redress for violations


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Ensure timely, accurate disclosure on allmaterial matters, including the financialsituation, performance, ownership and

corporate governance


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Procedures and structures are in place so asto minimize, or avoid completely conflictsof interest

Independent Directors and Advisers i.e. freefrom the influence of others


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usama iftekhar(28)


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Good Board practices

Control Environment

Transparent disclosure

Well-defined shareholder rights

Board commitment


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Clearly defined roles and authorities

Duties and responsibilities of Directors understood

Board is well structured

Appropriate composition and mix of skills


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Appropriate Board procedures

Director Remuneration in line with best practice

Board self-evaluation and training conducted


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Internal control procedures

Risk management framework present

Disaster recovery systems in place

Media management techniques in use


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Business continuity procedures in place

Independent external auditor conducts audits

Independent audit committee established


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Internal Audit Function

Management Information systems established

Compliance Function established


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Financial Information disclosed

Non-Financial Information disclosed

Financials prepared according to International

Financial Reporting Standards (IFRS)


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Companies Registry filings up to date

High-Quality annual report published

Web-based disclosure


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Minority shareholder rights formalised

Well-organized shareholder meetings conducted

Policy on related party transactions


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Policy on extraordinary transactions

Clearly defined and explicit dividend policy


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The Board discusses corporate governance issues andhas created a corporate governance committee

The company has a corporate governance champion

A corporate governance improvement plan has beencreated

Appropriate resources are committed to corporate

governance initiatives


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Policies and procedures have been formalized anddistributed to relevant staff

A corporate governance code has been developed

A code of ethics has been developed The company is recognized as a corporate

governance leader


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Corporate Governance applies to all types oforganizations not just companies in the private sector

but also in the not for profit and public sectors

Examples are NGOs, schools, hospitals, pension

funds, state-owned enterprises


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Assurance That Actions Support Strategic Positions:Key strategic actions, such as mergers and

acquisitions, major new market entries, exiting

markets, closing plants.Monitoring Investment Decisions andCapital Investments

It is the responsibility of the corporate

board to review and understand thefinancial statements.


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Policy setting

Corporate governance is the system used to

direct and control organizations

Establishing Corporate StrategyAn organization's corporate board must be intimately

involved with establishing a clear definition for the

organization's purpose and desired outcomes


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Better access to external finance

Lower costs of capitalinterest rates on loans

Improved company performance sustainability

Higher firm valuation and share performance Reduced risk of corporate crisis and scandals


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THANKS

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