Is Corporate Governance only a Fad…Fashionable…or a bore!!

Ayla Majid CEO CAMCO (Pvt) Limited

(Corporate Member of Islamabad Stock Exchange)

Why….

• Color Blue fashionable and sells

• Acai Berrys

• Omega III

Code of Corporate Governance 2012

• Board composition – Executive and Non Executive– Independent Directors (1 ..preferably 1/3rd)

• Maximum directorships one can have = 7• System of controls – internal controls• Board has to evaluate itself within 2 years• CEO and Chairman cannot be same person

Code of Corporate Governance 2012

• Directors Training Program• Role of CFO and Company Seretary• Related Party transactions – disclosures• Corporate Reporting Framework• Board Committees – HR and Audit• External auditots – 5 years rotation• Statement of Compliance of code

IFC CG Survey 2010

Findings….At a Global Level• Recent financial crises have elevated the

importance of good governance.• Specific corporate governance-related reforms

could make countries more attractive investment destinations.

• Emerging market investors believe that better firm- level governance can make up for country weaknesses in corporate governance.

IFC CG Survey 2010

Findings….For emerging market fund investment decisions• Corporate governance is a critical factor in

emerging market investment decisions

• Investors are willing to pay a premium for better-governed emerging market firms

IFC CG Survey 2010

Findings….Company Specific• Investors often do not invest in emerging

market companies with poor governance

• Lack of transparency is a red flag for emerging market investors

• Board independence is a low-level concern for emerging market investors

What is happening……!!

Enhance shareholder and stakeholder value

Needs an asessment….

If its fashionable… it needs a cntinous change and that will be based on asessment…

Research on the impact… is it really helpful??