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Corporate governance
Refers to the system by which corporations are directed and controlled. The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation.
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 of Corporate Governance Practices in Pakistan
The survey has been commissioned by the International Finance Corporation, Securities and Exchange Commission of Pakistan and Pakistan Institute of Corporate Governance and conducted by ACCA Pakistan. This survey is expected to provide a baseline for future corporate governance reforms and initiatives under the IFCs Pakistan Corporate Governance Project.
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
Primarily concerned with public listed companies i.e. those listed on a Stock Exchange
Focused on preventing corporate collapses such as Enron, Polly Peck and the Maxwell companies
What relevance does it have to Africa where there are few public listed companies Most companies are non-listed, private family owned businesses where the shareholders and the managers are often the same people
Accountability
Fairness Transparency
Independence
Ensure that management is accountable to the Board Ensure that the Board is accountable to shareholders
Ensure timely, accurate disclosure on all material matters, including the financial situation, performance, ownership and corporate governance
Procedures and structures are in place so as to minimize, or avoid completely conflicts of interest
Independent Directors and Advisers i.e. free from the influence of others
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usama iftekhar
The Board discusses corporate governance issues and has created a corporate governance committee The company has a corporate governance champion A corporate governance improvement plan has been created Appropriate resources are committed to corporate governance initiatives
Policies and procedures have been formalized and distributed 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
Corporate Governance applies to all types of organizations 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
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 and Capital Investments It is the responsibility of the corporate board to review and understand the financial statements.
Policy setting Corporate governance is the system used to direct and control organizations Establishing Corporate Strategy An organization's corporate board must be intimately involved with establishing a clear definition for the organization's purpose and desired outcomes
Better access to external finance Lower costs of capital interest rates on loans Improved company performance sustainability Higher firm valuation and share performance Reduced risk of corporate crisis and scandals
THANKS