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Directorship of Companies & Corporate Governance
03-11-2009, 10:23 PM,
#1
Directorship of Companies & Corporate Governance
According to Code of Corporate Governance a person can become director of maximum 10 companies. In my opinion it is not fair; the number of companies of which a person can become director at a time should be reduced.

Because if an individual is allowed to become the director of as many as 10 companies then the door of exploiting of minority shareholders opens and a condition of monopoly of some people in corporate sector begins to exist.

Today, there are some persons who have directorship of many big companies some of them are ex civil and military beaurucrates. Some companies have strong desire the re-election or re-appointment of these influencing persons as directors again and again.
After electing as director these persons use their influences to provide unreasonable benefits to these companies. These benefits included from tax evasion to not compliance from certain provisions of Companies Ordinance, 1984, one side. On the other hand these few persons exploit the rights of minority shareholders and in some cases majority shareholders. There are many techniques which are used by these persons a bird eye view of these techniques is as follows

1. Reluctance, avoidance and delay in declaring dividend.
2. Appointment of favorite persons on key positions to secure benefits of senior mangers.
3. Tax evasion.
4. Escape from stick, true and fair internal as well as external audit.
5. Allotment of shares to desired ones.
6. Creation of monopolies of some families or persons in the company.


Although there are certain rule lays down by the code of corporate governance and companies ordinance for the protection of minority shareholders but I think one clause of Code of Corporate Governance, the reference of which I have given in beginning , make all other rules regulation useless.


Regards

Awais
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Messages In This Thread
Directorship of Companies & Corporate Governance - by awaisaftab - 03-11-2009, 10:23 PM
[No subject] - by malikzshan - 03-18-2009, 05:59 PM
[No subject] - by wasim akram - 03-18-2009, 06:50 PM
[No subject] - by malikzshan - 03-19-2009, 02:22 PM
[No subject] - by awaisaftab - 03-19-2009, 03:46 PM
[No subject] - by danishayub_76 - 03-19-2009, 09:34 PM
[No subject] - by wasim akram - 03-20-2009, 02:01 AM
[No subject] - by wasim akram - 03-20-2009, 02:09 AM
[No subject] - by awaisaftab - 03-20-2009, 11:49 PM
[No subject] - by wasim akram - 03-21-2009, 08:28 PM
[No subject] - by awaisaftab - 03-24-2009, 03:44 PM
[No subject] - by kamranACA - 10-12-2010, 09:10 PM
[No subject] - by kamranACA - 10-13-2010, 05:48 PM

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