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Comments on code of corporate governance by SECP
11-12-2003, 05:43 PM,
#1
Comments on code of corporate governance by SECP
I will be posting my comments ...(though im not such an authoritative person but courtesy of internet and accountancy.com)...and will appreciate your comments as well.



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11-13-2003, 03:41 PM,
#2
 
Dear Friends
someone at this website thought it would be a good idea to start this thread.. As we have seen there is no contribution to this thread... so im doing what we call Bismillah.
Feel free to comment on my comments in whatever way u feel comfortable. Wink

1. Definition of Independent Director is very broad and therefore good.
2. Executive Directors cannot be more than 75% of the elected directors except for banks where prudential regulations are to be followed.
3. A person can be a director at TEN listed companies at a time {clause iii}
4. No person to be a director unless he/she has a NTN number {(clause iv(a)}
5. If a person or spouse is engaged in stock exchange business, a listed company will TRY not to elect him/her (the word endeavour has been used as opposed to shall) {clause v}
6. There is no limit to re-elections. I was wondering what about independent directors
7. statement of ethics and business practices has to be prepared which needs to be signed by EACH EMPLOYEE… It should include policy for protection of WHISTLE-BLOWERS. {clause viii)
8. thE BoD shall define the level of materiality… very interesting {viii}
9. Specific items that need BoD approval have been identified which is good and removes confusion {viii(d)}
10. CEO is allowed to be the chairman of the Board {ix}
11. The code itself encourages conflict of interest by defining separate roles for chairman and chief executive even if they are the same person. {ix}
12. Agenda should accompany notice of BoD meetings {ix}… auditors should ensure Wink
13. significant issues for BoD meetings are not mandatory as MAY is used {xiii}
14. CFO or the company secretary cannot be removed without approval of BoD. {xv}… what about the poor internal auditor ….Wink
15. CFO cannot be a part of meeting where anything relating to CEO e.g. remuneration is discussed… not even in an advisory capacity to BoD {xviii}… another joke
16. contents of director’s report to include reason for non-payment of dividend/bonus shares {xix(d)}
17. director’s report also needs to include outstanding statutory payments…e.g payment to tax authorities, local authorities, duties, charges…{xx(e)}
18. Also to include is Insider trading, however EXECUTIVES have not been included in this disclosure {xix(j)}
19. All half yearly accounts need to be subject of limited scope review to be defined by ICAP/approved by SECP {xxi}… has ICAP defined the terms and conditions / any committee formed?…J
20. Again all listed companies are required to provide material information as they occur (IMMEDIATELY) to SECP however the prescribed examples are again MAY i.e. not mandatory. {xxiii}
21. company secretary needs to furnish secretarial compliance certificate that all statutory returns have been filed {xxv}…now doesn’t it call for a downsizing of SECP Wink any misstatement will btw liable to prosection.
22. CLOSED PERIOD prior to declaration of interim/ final result where insiders will not be allowed to trade is good {xxvi}
23. listed companies to ensure auditor (partner, spouse, minor children) not hold shares…{xxvii}… I think listed companies should solicit certificates to this effect Wink
24. chairman of the audit committee can be the CEO {xxx} … so much for corporate governance
25. Internal audit report to be provided to external auditors {xxxvi}
26. Audit firm/partner shall comply with IFAC code of ethics {xxxviii}… which again calls for a certificate from the auditor ….J
27. partner/staff on audit including their close relatives of listed company cannot be appointed CEO/CFO/Internal auditor/Director without 2 year cooling off period. ..{x1ii}.. Difficult to ensure compliance ….J
28. ML can be sent after signing of the audit report… what a progress! {x1iii}
29. statement of compliance to be certified by statutory auditors, where it can be objectively verified…{x1vi}…very subjective statement indeed.

I have ignored some other things like QCR and internal auditor requirements etc. as these are well known

cheers




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11-13-2003, 05:25 PM,
#3
 
Well, a couple of things regarding internal audit

CCG specifies that CFO and Company Secretary should be members of any professional accounting body blah blah blah, but it is silent for the Head of Internal Audit (there goes the professionalism)

Then, as indicated, CFO and CS cannot be removed without approval of the Board, but its not the case with Head of Internal Audit (so, IA prepares a good report against some management deeds and he is whacked away the instant…….so much for independence)

Thirdly, there are many ambiguities left in internal auditors’ role, reporting framework etc.


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11-18-2003, 10:14 PM,
#4
 



NO COMMENTS<img src=icon_smile_tongue.gif border=0 align=middle><b></b>

Muhammad Asif Masood
for islam visit
www.dawateislami.net
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01-10-2004, 05:12 PM,
#5
 
SECP has issued a manual to faciliate compliance to COCG...
its link is http//www.secp.gov.pk/dp/pdf/manual-CG.pdf

... its 88 pages... <img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>

have a look and give your comments.


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01-19-2004, 09:49 PM,
#6
 
NO COMMENTS<img src=icon_smile_tongue.gif border=0 align=middle><b></b>

There is a will there is a way.
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01-20-2004, 01:16 AM,
#7
 
<BLOCKQUOTE id=quote><font size=1 face="Verdana, Tahoma, Arial" id=quote>quote<hr height=1 noshade id=quote>
Well, a couple of things regarding internal audit

CCG specifies that CFO and Company Secretary should be members of any professional accounting body blah blah blah, but it is silent for the Head of Internal Audit (there goes the professionalism)

Then, as indicated, CFO and CS cannot be removed without approval of the Board, but its not the case with Head of Internal Audit (so, IA prepares a good report against some management deeds and he is whacked away the instant…….so much for independence)

Thirdly, there are many ambiguities left in internal auditors’ role, reporting framework etc.



<hr height=1 noshade id=quote></BLOCKQUOTE id=quote></font id=quote><font face="Verdana, Tahoma, Arial" size=2 id=quote>

Quite interesting.

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