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GOVERNANCE 2012
Executive Director
paid executives of the company from among
senior management
Maximum number of Executive Directors cannot
be more than 1/3rd of elected directors
including CEO.
to design, develop and implement strategic
plans for their organization
Video: Failure
of Directors
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Non-executive directors
not from among the executive management
team and may or may not be independent.
are expected to lend an outside viewpoint to
the board of directors of a company
do not undertake to devote their whole
working time to the company.
The guiding factor in distinguishing between
executive and non-executive directors of a
company is the extent of their involvement
in managing the affairs of the company
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Independent directors
is not connected or does not have any other relationship,
with the listed company, its associated companies,
subsidiaries, holding company or directors. The test of
independence principally emanates from the fact whether
such person can be reasonably perceived as being able to
exercise independent business judgment without being
subservient to any form of conflict of interest.
The Chairman of the audit committee shall be an
independent director
One independent director is mandatory while preference is
for 1/3rd of the total members of the board to be
independent directors.
Composition of the Board
in Pakistan
2.
1. Non- 3.
Executive Executive Independen
Directors Directors t Directors
Maximum 1/3rd
rd of
1/3rd of total Approx 75% total
directors of all directors
including directors 1
CEO Mandatory
Budgets;
Directors remuneration
There shall be a formal and transparent procedure for fixing the
remuneration packages of individual directors. No director shall be
involved in deciding his/her own remuneration.