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PRESENTED TO: SIR SAFDAR HUSSAIN TAHIR

BY: M. FAHAD ALI


G.C. UNI. FAISALABAD





Composition of board:
Balance of the executive or non executive directors including :
Independent director
Representative of minority interest .(skills, exp, competencies)
For this purpose listed companies shall take the following steps:
a) Minority share holder are facilitated to conduct election for board of
director and company shall:
Annex with the notice(sec 178 A) a statement of names of candidates
that seeks to contest election for board of directors.
provide information regarding members and shareholding structure
to the candidate(s) representing minority shareholders











(b) Independent Director:
At least one
Preferably one third of total members.
Names should be in annual statements.

No director shall be considered independent if one or more of the following
circumstances exist:
If he/she has/has been:
employee of the company, or
Holding company within the last three years;
CEO of subsidiaries
A material business relationship with company.
Received remuneration as a director,
He/she is a close relative of the companys promoters, directors or major
shareholders.

(c) professional indemnity insurance cover in respect of independent directors
shall be encouraged.
d) Executive directors:
Shall not be more than one third of the elected directors












Maximum number of directorships to be held by a director:
ii. No person shall be elected or nominated as a director of more than seven
listed companies simultaneously,
Filling up a casual vacancy
iii. Any casual vacancy on the board of directors of a listed company shall be
filled up by the directors at the earliest but not later than 90 days thereof,
Responsibilities, powers and functions of board of directors
iv. The board of directors shall use its powers in the best interests of the listed
company.
v. The board of directors of a listed company shall ensure that:
a) Professional standards and values are put in the place in the form of code
of conduct.
b) A vision and/or mission statement and overall corporate strategy for the
listed company is prepared and adopted.
c) Establishment and implementation of internal control system.






vi. The Chairman and the Chief Executive Officer shall not be the same
person.
The Chairman shall be elected from among the non-executive directors of
the listed company.
The Chairman shall be responsible for leadership of the board and shall
ensure that the board plays an effective role in fulfilling all its responsibilities.
The Board of Directors shall clearly define the respective roles and
responsibilities of the Chairman and CEO.
Meetings of the board
vii. All written notices, including the agenda, of meetings shall be circulated at
least seven days prior to the meetings, except in the case of emergency
meetings, where the notice period may be reduced or waived.
viii. The Chairman shall ensure that the minutes of meetings of the board of
directors are appropriately recorded.







Significant issues to be placed for decision of Board of Directors
ix. For corporate decision-making process, significant issues shall be placed
for the information, consideration and decision of the board of directors of
listed companies and/or its committees.
The significant issues for this purpose may include:
Annual and long term business plans
Budgeting
Internal reports, including cases of fraud
Internal and external audits and financials
Joint venture or distributor agreements
Material regulatory review notices
Significant liability claims or judgments








(x) Related party transactions
a) The details of all related party transactions shall be placed before the Audit
Committee of the company.
b) The board of directors of a company shall approve the pricing methods for
related party transactions that are practiced under certain terms.
c) Every company shall maintain a party wise record of transactions, in each
financial year that should include:
i) Name of related party;
ii) Nature of relationship with related party;
iii) Nature of transaction;
iv) Amount of transaction; and
v) Terms and conditions of transaction, including the amount of consideration
received or given.





Directors Training Program
(xi) All listed companies shall make appropriate arrangements to carry
out orientation courses for their directors to ensure them about their
duties and responsibilities, laws etc.

Required training program certificate of capable institution at criteria
of SECP.

Individuals with a minimum of 14 years of education and 15 years of
experience on the board of a listed companylocal and/or foreign
shall be exempted from the directors training program.
CHIEF FINANCIAL OFFICER (CFO) AND COMPANY SECRETARY


Qualification
No person shall be appointed as the CFO of a listed company unless he
is
(a) a member of a recognized body of professional accountants.
(b) graduate from a recognized university or equivalent.
(c) having at least five years experience in handling financial or
corporate affairs of a listed public company or a bank or a
financial institution.

(xiv) No person shall be appointed as the Head of Internal Audit of a listed
company unless he/she has 5 years of relevant audit experience and is:
(a) a member of a recognized body of professional accountants; or
(b) a Certified Internal Auditor; or
(c) a Certified Fraud Examiner; or
(d) a Certified Internal Control Auditor.
Requirement to attend board meetings
Q: who shall attend meetings?
(xv) The CFO and Company Secretary of a listed company or
in their absence, the nominee, appointed by the board.
but if agenda of meeting is regarding CFO and secretary of company than they
shall not attend that meetings.



CORPORATE AND FINANCIAL REPORTING FRAMEWORKTHE

DIRECTORS REPORT

(b) Proper books of account of the listed company have been maintained.

(c) International Accounting Standards, as applicable in Pakistan, have been
followed in preparation of financial statements.

(d) The system of internal control is sound in design and has been effectively
implemented and monitored

FINANCIAL REPORTING

The quarterly un-audited financial statements of listed companies shall
be published and circulated along with directors.

All listed companies shall ensure that half-yearly financial statements are
subjected to a limited scope review by the legal auditors.

.





Responsibility for financial reporting and corporate compliance:
(xxi) No listed company shall calculate its financial statements, unless the CEO
and CFO present the financial statements to the board of directors for approval.
Disclosure of interest by a director holding companys shares:
(xxii) Where any director, CEO or executive sell, buy or transact in shares of
listed company of which he/she is a director, CEO or secretary shall
immediately notify to company secretary.
Committees of the board :
Composition:
The board of director of any listed company shall appoint an audit committee at
least of three members comprising of non-executive director.
There shall also be a human resource and remuneration committee at least of
three members comprising of majority of non executive directors including
preferably an independence director.









The committee shall be responsible for:
i) recommending human resource management policies to the board;
ii) recommending to the board the selection, evaluation, compensation (including
retirement benefits) and succession planning of the CEO;
iii) recommending to the board the selection, evaluation, compensation (including
retirement benefits) of CEO, CFO, Company Secretary and Head of Internal
Audit; and
iv) consideration and approval on recommendations of CEO on such matters for
key management positions who report directly to CEO or COO.
(xxvi) The names of members of the committees of the board shall be disclosed
in each Annual Report of the listed company.
Audit Committee:
(xxvii ) The committee shall meet once in a quarter. These meetings shall held
prior to the approved of the interim result of final audit.
Attendance at meeting:
(xxviii) The CFO, the head of interim audit and external auditor will be the
representative of company and attend meetings.
Terms of Reference:
(xxix) The board of directors shall determine the terms of reference committee .
Whole support for committee working will be provided by board.




Reporting Procedure:
The audit committee shall appoint a secretary of the committee that cant be
CFO.
That secretary shall circulate the minutes of the meeting to all.
Interim Audit:
There shall be an interim audit function in every company. The head of audit
committee shall report to the audit committee and CFO.
All listed companies shall ensure that interim audit reports are provided for the
review of the external auditor.
External Audit:
No company shall appoint as external auditor a firm of auditors which has not
been given a satisfactory rating under Quality Control Review Program of ICAP.
(xxxiv) No listed company shall appoint as external auditors a firm of auditors
which or a partner of which is non-compliant with the International Federation of
Accountants.
The board of directors shall recommend appointment of external auditor for a
year.
No any auditor of listed company shall perform any other task except audit.


All companies in the financial sector shall change its external auditor after every
five years .
No company shall appoint the person as a external auditor who is a close
relative of directors or any other employee.


COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE

All listed companies shall publish and circulate a statement with their report to
set out the status of their compliance with requirements.
All listed companies shall ensure that statement of compliance is reviewed by
external auditor and external auditor shall highlight the non compliance things
with code of corporate governance.
Where SECP is satisfied that it is not practicable in accordance with the any
best practices of the corporate governance in a particular case, it may for
reasons to be recorded , relax the same subject to such conditions as it my
consider it fit.


THANK YOU!