Topic:Code of corporate governance

Submitted
To
Sir.salman masood
Submitted
By
Irslan akram
Roll no
03MBA1.5year
Summary of Code of corporate governance
In march 2002 secp issued the code of governance framework for good governance of companies
under listed in Pakistan stock exchange the code governance carry out the best practices for
those companies they are directed and controlled with objectives is safeguarding shareholders
interest and promoting market confidence .they also provide the framework for directors,
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managers, auditors, shareholders, stakeholders, and others respective role in their conduct to
change the culture.
Corporate governance:-Basic definition of corporate governance is corporate governance is the
system by which companies are directed and controlled. Here role of shareholders is they
appointed directors in annual AGM.
Corporate governance is new term and in which used describe process. This process seeks to
ensure that all corporate entities carried on in accordance with the highest prevailing standards of
ethics and efficacy upon assumption for providing the safeguard and promote the interest of all
corporate stakeholders. Board of director all role, regulations and authority discus in general
meeting.
The good and proper governance must consider imperative for establishment of competitive
market as well to robust growth of corporate sector also attract capital then those which have not.
Act 1844 provided the initial impetus to the development of corporations.1855 provide the
information joint stock companies registration process after this followed in India 1882.act 1913
until 1984 when companies ordinance was promulgated, following lengthy devote, and Pakistan
companies were established and governed in accordance with the provisions of the companies
1913.
In December 1998 ICAP develop a framework of good governance in Pakistans sub committed
was formed to undertake the task of formulating recommendations for drawing up a draft code of
corporate governance. On March 28, 2002 after a process of consultation with stakeholders the
draft code was finalized and issued by the SEC.
The popularity of effective corporate governance in both side developed or developing worlds..
Company has legal separate entity if any member death company cannot effect. Public listed
company run business in large scale this activities by the large members like stakeholders, BOD,
employees etc.
Shareholder catalyst to monitor the control and influence in board and as well as management.
Individual shareholder does not affect the company decisions as compare to the large portion of
shareholders decisions related to this point study conducted in United States.
Role of director is handling the chief administrators activities and a manager on the other hand
is a person appointed to administer, supervise or manage the affairs of business of a company.
Under section 2(13) company ordinance any person occupying the option of a director or all
detail related first director in memorandum of association. If retiring directors shall take
immediate steps to hold the election of directors in case of any impediment its compulsory to

report within 15 days and any causal vacancy arising will be filled up by the directors within the
30 days.
Fiduciary duties show fiduciary relationship such as trustee-beneficiary ,guardian-ward, agentprinciple and attorney-client require highest duty of care Fiduciary relationships usually arise in
four situations: (1) when one person places trust in the faithful integrity of another, who as a
result gains superiority or influence over the first, (2) when one person assumes control and
responsibility over another, (3) when one person has a duty to act for or give advice to another on
matters falling within the scope of the relationship, or (4) when there is a specific relationship
that has traditionally been recognized as involving fiduciary duties, as with a lawyer and a client
and a client or a stockbroker and a customer.
According to corporate laws some fiduciary duties are following. Loyalty and good faith; Care
and diligence. Duty to retain discretions; Duty to avoid actual and potential conflicts of interest;
Duty to act honestly in the exercise of powers.
Some imported responsibility of director. To issue shares, debentures, participation term
certificates or any instrument in the nature of redeemable security; To borrow money otherwise
than by debenture; To invest the funds of the company; To make loans.
Liability is breach of trust for misapplication of company's funds and negligence in contract.
Intentionally giving false evidence. False statements in any report, statement, balance sheet or
other document and for wrongfully obtaining the possession of any property or withholding it or
for willfully applying it to unauthorized purposes.
company secretary is any individual appointed to perform the secretarial, administrative or
other duties ordinarily performed by the secretary of a company must have professional
accountants, corporate/chartered secretaries, or lawyer, or not borrow money and not issue
company writes and CFO or chief accountant includes any person, by whatever name called,
who is charged with the responsibility of maintenance of books of account of a company.
The internal control system is the system of controls, financial or otherwise, established by
management in order to carry on the business of the company in an orderly and efficient manner.
Provide all reports for purpose to show the financial position of the company. Directors have a
statutory responsibility to review and approve the financial statements before circulation to
members. Pursuant to Section 196 (2) (h) of the Companies Ordinance.