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Management Development . Topic. Corporate Governance. Presentation by. Event. Prof. Dr. Khawaja Amjad Saeed.

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  1. Management Development Topic Corporate Governance Presentation by Event Prof. Dr. Khawaja Amjad Saeed Founder Principal, Hailey College of Banking & Finance, University of the Punjab, Lahore Pakistan (2003----), Member Governing Council, International Federation of Accountants (IFAC), New York (1997-2000), President, South Asian Federation of Accountants (SAFA) (1997), President, Institute of Cost and Management Accountants of Pakistan (1997-2000), President, Association of Management Development Institutions of South Asia (AMDISA) (1993-96), Pro Vice-Chancellor University of the Punjab, Lahore (1994-1996), Founder Director, Institute of Business Administration (IBA), University of the Punjab, Lahore (1973-1996). Cell: 0333-4363363

  2. WELCOME TO OUR PROGRAM CORPORATE GOVERNANCE PRESENTATION FRAME • Concept • Central Concerns • Experiential Learning • United Kingdom • Asia • Africa • Fundamental Principles of Corporate Governance • The Seven Principles of Public Life

  3. 1. CONCEPT OECD “Corporate Governance Comprehends that structure of relationship and corresponding responsibilities among a core group consisting of: - Shareholders - Board Members - Corporate Managers Designed to best poster the competitive performance required to achieve the corporation’s primary objective”.

  4. 2. CENTRAL CONCERNS • Role of BOD • Its Structure • Pattern of Remuneration • Issues of Directors Ownership • Degree of Freedom and Enterprise Available to the Board • Role of Institutional Directors • Accountability of Board for its Actions

  5. 3. EXPERIENTIAL LEARNING 1. Cadbury Committee • Four Major Areas • Board of Directors (BOD) • Non-Executive Directors • Executive Directors • Reporting & Controls • (1) BOD UNITED KINGDOM

  6. 3. EXPERIENTIAL LEARNING UNITED KINGDOM 1. Cadbury Committee

  7. 3. EXPERIENTIAL LEARNING UNITED KINGDOM 1. Cadbury Committee • 2. Non-Executive Directors • Contribution areas: • Indendent Judgment • Focus • Strategy Performance • Key Appointments • Standards of Conduct • Fairness & Independence • - Independent of Management • - Fee----Time Commitment • - Appointment for Specified Terms • - Reappointment not Automatic

  8. 3. EXPERIENTIAL LEARNING UNITED KINGDOM 1. Cadbury Committee • 3. Executive Directors • Contract: 3 years • Formal Approval • Through the Board as a whole • Emoluments • Transparent disclosure • Pension Contributions & Stock Options • Salary & Performance related Elements with Basis of Measurement

  9. 3. EXPERIENTIAL LEARNING UNITED KINGDOM 1. Cadbury Committee • 3. Executive Directors • Remuneration Committee • Recommend Pay and Executive Director • Composition: Wholly or mainly of non-executive directors

  10. 3. EXPERIENTIAL LEARNING 1. Cadbury Committee 4. Reporting & Controls UNITED KINGDOM

  11. 3. EXPERIENTIAL LEARNING UNITED KINGDOM 2. Hampel Committee 1995 • Report released in January 1998 • Scope • Principles of Corporate Governance • Application of Principles • The Future • Directors • Directors Remuneration • Shareholders & the AGM • Recommendations

  12. 3. EXPERIENTIAL LEARNING ASIA • Hong Kong • Malaysia • Pakistan • India • (Satyam Computer Services, Hyderabad Deccan)

  13. 3. EXPERIENTIAL LEARNING ASIA 1. Hong Kong I: Accounting Profession-Impact of U.K II: Working Groups - Report on Corporate Governance 1995, reprinted 1996 - Second Report: January 1997 III: Exclusive Story - Theme: Corporate Governance - Released by HKSA: October, 1996

  14. 3. EXPERIENTIAL LEARNING 1. Hong Kong IV: Ten-Point Code: ASIA

  15. 3. EXPERIENTIAL LEARNING ASIA 2. Malaysia • A: Code of Ethics for Directors: • Five Points • Introduction • Principles • Objectives • Definition • Code of Conduct • - Corporate Governance • - 12 Points

  16. 3. EXPERIENTIAL LEARNING ASIA 2. Malaysia 5. Code of Conduct - Relationship with - Shareholders - Employees - Creditors - Customers - Social Responsibilities and the Environment - 5 points

  17. 3. EXPERIENTIAL LEARNING ASIA 2. Malaysia • B: Code of Ethics for Company Secretaries • Four Parts • Introduction • Principles • Objectives • Code of Conduct • - 5 Points

  18. 3. EXPERIENTIAL LEARNING ASIA 2. Malaysia • C: Publications • Above Publications wereReleased by: • Registry of Companies • Ministry of Domestic, • Trade & Consumers Affairs, 1996

  19. 3. EXPERIENTIAL LEARNING ASIA 3. Pakistan • First Code of Corporate Governance • SECP • With Assistance from; • ICAP • Stakeholders • Sound Corporate Practices

  20. 3. EXPERIENTIAL LEARNING ASIA 3. Pakistan • B: Applicable to: • Listed Companies • Banking Companies • DFIs • NBFIs • Insurance Companies • Mutual Funds • Unit Trusts • Companies/Corporations held or controlled by the Government

  21. 3. EXPERIENTIAL LEARNING ASIA 3. Pakistan • C: Constituents: • 1. Directors • BOD • Qualifications and Eligibility • Tenure • Responsibilities, Powers and Functions of BOD • Meetings • Key Information

  22. 3. EXPERIENTIAL LEARNING ASIA 3. Pakistan • C: Constituents: • 2. CFO & Secretary • Qualifications • Attendance of Board Meetings • 3. Corporate & Financial Reporting Framework • Directors Report to Shareholders • Frequency of Financial Reporting • Responsibility for Financial Reporting & Corporate Compliance • Disclosure of interest by a Director holding company’s shares

  23. 3. EXPERIENTIAL LEARNING ASIA 3. Pakistan • C: Constituents: • 3. Corporate & Financial Reporting Framework • Auditors not to hold shares • Corporate ownership structure • Divesture of shares by sponsors/controlling interest • 4. Audit Committee • Committee • Frequency of meetings • Attendance at meetings • Terms of reference

  24. 3. EXPERIENTIAL LEARNING ASIA 3. Pakistan • C: Constituents: • 4. Audit Committee • Reporting procedure • Internal Audit • 5. External Auditors

  25. 3. EXPERIENTIAL LEARNING AFRICA South Africa • The King’s Report on Corporate Governance • Published by: The Institute of Directors in South Africa, November 19, 1994 • Recommendations • Source: Cadbury Report, Paragraphs 3.2-3.4

  26. 4. FUNDAMENTAL PRINCIPLES OF CORPORATE GOVERNANCE A: Cadbury Committee-the three key principles and their definitions - Openness (Transparency) - Integrity - Accountability Source: Cadbury Report, Paragraphs 3.2-3.4

  27. 4. FUNDAMENTAL PRINCIPLES OF CORPORATE GOVERNANCE B: As adapted for the Public Sector in the IFAC Study - Openness - Integrity - Accountability Source: (IFAC Study: Paragraph 065)

  28. 5. THE SEVEN PRINCIPLES OF PUBLIC LIFE

  29. 5. THE SEVEN PRINCIPLES OF PUBLIC LIFE (Extracted from the “First Report of the Committee on Standards in Public Life”, UK, May 1995) ANY QUESTIONS THANK YOUR FOR ATTENTIVE LISTENING

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