The document discusses corporate governance guidelines established by the Securities and Exchange Commission of Pakistan (SECP). It outlines requirements for board composition and responsibilities, financial reporting, related party transactions, and the roles of committees. Key points covered include establishing independent boards, disclosure of financial information, and establishing audit and HR committees to oversee important functions. The SECP provides these guidelines to improve transparency, accountability and protect minority shareholders in Pakistani capital markets.

1. SECP

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Importance of CG & Role of SECP
The code of CG 2012 regarding, composition
of the board, responsibility, powers &
functions of the director, decisions of board,
CFO, CS, Corporate & financial reporting,
Audit Committees, Criteria for DTP
Comparison of 2002 & 2012 codes
(Annexure C)

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Sample Secretarial compliance certificate
(Appendix A)
Sample Statement of compliance with the
code of corporate governance
(Appendix B)
Comparison of 2002 & 2012 codes
(Annexure C)

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Good governance & corporate governance standards
Ensuring the interest of various stakeholders, Making capital
markets transparent, protecting rights of minority
shareholders and attracting and retaining foreign
investment
Importance of corporate governance
Role of SECP- March 2002
Revisions in the code 2012-PICG
The corporate compliance, transparency, disclosure and
accountability standards will improve significantly in the
capital markets

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Composition of the Board: The board of directors is encouraged
to have a balance of executive and non-executive directors,
including independent directors and those representing minority
interests with the requisite skills, competence, knowledge and
experience so that the board as a group includes core
competencies and diversity, including gender, considered relevant
in the context of the company’s operations.
 The minority shareholders as a class are facilitated to contest
election of directors by proxy solicitation
 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 non-executive, executive and
independent director(s)

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Circumstances in which no director shall be
considered independent
Maximum number of directorships to be held
by a director
Filling up a casual vacancy

7. Professional standards and corporate values
Adequate system and control
Vision and mission statement
System of sound internal control
Annual evaluation of board performance
Material transactions or significant matters are
documented
 The Chairman & CEO
 Meetings of the board
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Full details of the company’s failure to meet obligations shall be provided
in the company’s quarterly and annual financial statements
Annual business plan, cash flow projections, forecasts and strategic plan
Budgets including capital, manpower and overhead budgets, along with
variance analyses
Quarterly operating results of the listed company
Internal audit reports, including cases of fraud, bribery, corruption, or
irregularities of a material nature
Management letter issued by the external auditors
Status and implications of any law suit
Failure to recover material amounts of loans, advances, and deposits
made by the listed company
Report on governance, risk management and compliance issues
Disputes with labor and their proposed solutions
Whistleblower protection mechanism

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Name of related party
Nature of relationship with related party;
Nature of transaction;
Amount of transaction; and
Terms and conditions of transaction,
including the amount of consideration
received or given

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Directors’ Training Program
Chief Financial Officer (CFO), Company
Secretary and Head of Internal Audit
Appointment and removal
Qualifications of CFO and Head of Internal
Audit
Requirement to attend the board meeting
Director’s remuneration

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The financial statements
Proper books of accounts
Appropriate accounting policies
International financial reporting standards
System of internal control
Significant deviations in operating results
Operating & financial data
Dividend issue
Plans and decisions
Number of board & committees meetings
Details of training programs

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Frequency of financial reporting
Responsibility for financial reporting and
corporate compliance
Disclosure of interest by a director holding
company’s interest
Composition of the committees of the board

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The committee shall be responsible for:
Recommending human resource management policies to the board;
Recommending to the board the selection, evaluation, compensation
(including retirement benefits) and succession planning of the CEO;
Recommending to the board the selection, evaluation, compensation
(including retirement benefits) of COO, CFO, Company Secretary and
Head of internal audit
Consideration and approval on recommendations of CEO on such
matters for key management positions who report directly to CEO or
COO.
The names of members of the committees of the board shall be
disclosed in each Annual Report of the listed company

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Frequency of meetings
Attendance at meetings
Terms of reference
Reporting procedures
Internal Audit
External Audit
Compliance with the code of CG

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Determination of appropriate measures to safeguard the listed
company’s assets
Review of quarterly, half-yearly and annual financial statements
Review of preliminary announcements of results prior to publication
Facilitating the external audit and discussion with external auditors
Review of management letter issued by external auditors
Ensuring coordination between the internal and external auditors of the
listed company;
Review of the scope and extent of internal audit
Consideration of major findings of internal investigations of activities
Internal control systems including financial and operational controls,
Monitoring compliance with the best practices of corporate governance
Consideration of any other issue or matter as may be assigned by the
Board of Directors

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Background
Criteria for institutions
Program outline
Legal view
Role and responsibilities of board of directors
Financial overview
International trends practices

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Independent Director
Criteria for assessment of independence
Executive Directors
Number of directorships
Board evaluation
Office of Chairman and CEO
Training of the Board of Directors
Appointment and removal and qualification criteria for
Chief Financial Officer (CFO) and Company Secretary (CS)
The head of internal audit
Remunerations of directors
Board Committees
Internal audit

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