Having good corporate governance practice will lead to draw attention of potential

investors towards organization. Good corporate governance is necessary for

accountability as well as effective and efficient management. Security and exchange
commission of Pakistan is responsible for the betterment of corporate governance as well
as for raising its standards. Key to corporate governance lies in the change in mindset. It
is the joint responsibility of all concerned and not just the regulators prerogative. It
should be viewed as a means towards achieving value creation and sustainability and
only then can one reap the benefits of sustained economic growth and development at a
macro level.
SECP guide line states clearly about the selecting nominating and working of directors As
well as also defines the powers of directors and role of independent directors so
organizations can work well by ensuring accountability. comparison has been made at the
end of the document of code of conduct of corporate governance that clearly explains the
evolution of entire corporate governance system.
This code of conduct consists of following main issues:
1. Composition of the Board
2. Responsibilities, powers and functions of board of directors
3. Meetings of the board
4. Significant issues to be placed for decision of Board of Directors
5. Related party transactions
6. Directors Training Program
7. Chief Financial Officer (CFO), Company Secretary and Head of Internal Audit
Appointment and removal
8. Corporate and financial reporting framework
9. Directors remuneration
10. Frequency of financial reporting
11. Responsibility for financial reporting and corporate compliance
12. Disclosure of interest by a director holding companys shares
13. Committees of the board
14. Criteria for Institutions desirous of offering Directors Training Program

Composition of the Board:

This section direct and suggests the companies about the composition about the board of
directors, according to SECP board of directors should consist of at least one or one third
of independent directors
Clause (b) states: the board of directors of each listed company shall have at least one and
preferably one third of the total members of the board as independent directors. The
board shall state in the annual report the names of the no executive, executive and
independent director
More over this section also defines the criteria for being a independent directors
Responsibilities, powers and functions of board of directors:
The board of directors of a listed company shall exercise its powers and carry out its
fiduciary duties with a sense of objective judgment and independence in the best interests
of the listed company. v. The board of directors of a listed company shall ensure that: (a)
professional standards and corporate values are put in place that promote integrity for the
board, senior management and other employees in the form of a Code of Conduct,
defining therein acceptable and unacceptable behaviors.
The board shall take appropriate steps to disseminate Code of Conduct throughout the
company along with supporting policies and procedures and these shall be put on the
companys website;
(b) Adequate systems and controls are in place for identification and redress of
grievances arising from unethical practices.
(c) a vision and/or mission statement and overall corporate strategy for the listed
company is prepared and adopted. It shall further ensure that significant policies have
been formulated; Explanation: The significant policies for this purpose may include:

Governance, risk management and compliance issues;

human resource management including preparation of a succession plan;

procurement of goods and services

investors relations including but not limited to general investor awareness,

complaints and communication, etc.; marketing;

Determination of terms of credit and discount to customers;

write-off of bad/doubtful debts, advances and receivables;

capital expenditure, planning and control;

investments and disinvestment of funds;

borrowing of moneys;

determination and delegation of financial powers;

transactions or contracts with associated companies and related parties;

the corporate social responsibility (CSR) initiatives and other philanthropic

activities including donations, charities, contributions and other payments of a
similar nature;

health, safety and environment; and

The whistleblower policy.

A complete record of particulars of the significant policies along with the dates on which
they were approved or amended by the board of directors shall be maintained.

Directors remuneration
This section briefs about the remuneration of directors, how there rumination should be
and how there remuneration should be disclosed in financial statements.
Frequency of Financial Reporting
This section briefs about how discloser of financial matters should be made and what will
be the minimum or maximum time duration required for disclosing financial matters
Committees of the board
this section brief about the committees form by the board of directors that how the
committees will be formed and work such as audit committee which plays an integral part
in accountability as well as rumen ration committee that how it will work and appoint
director. This code of conduct has also a main feature comprises for the training of
directors and outlines the criteria for developing constitution of company