Corporate govenance

Corporate govenance - Shoaib Anwar 11-10661 BUSN 305...

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Shoaib Anwar 11-10661 BUSN 305 Submitted to : Prof B.H.Awan Assignment
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Introduction During recent years, good corporate governance has emerged as a key component in the successful functioning of financial markets and the corporate sector. Corporate governance is concerned with promoting corporate practices that ensure transparency and accountability. Initially, corporations that wanted to achieve high standards of corporate governance were encouraged to voluntarily comply with non-binding corporate governance codes. These codes included provisions that governed “recognized best practices” as well as disclosure requirements such as listing regulations. Over time, however, the persistent demand for corporate accountability and transparency led to an evolution from a voluntary notion of corporate governance to one in which corporations have a legal duty to “comply or explain.” To enforce standards of accountability and transparency, national governments have enacted various forms of legislation. Pakistan’s legislature, delegated the task of issuing a corporate governance code to the Securities and Exchange Commission of Pakistan (SECP), which formulated Pakistan’s Code of Corporate Governance (the Code) in 2002. Pakistan code of governance Pakistan has a multifaceted corporate governance system. Laws fall into one of the following six categories: 1. General corporate laws. 2. Rules and regulations made under corporate laws. 3. Stock exchanges’ listing regulations and bylaws. 4. Civil laws, including those that provide remedies for seeking declarations, enforcement of a claim, and recovery. 5. Criminal laws for breaches of trust, fraud, etc. 6. Special prosecution under the National Accountability Ordinance, 1999 for corporate fraud and misappropriation. CURRENT CHALLENGES AND RECOMENDATIONS Ownership Structure, Common Law, and Civil Law Pakistan’s dominant corporate ownership structure resembles a concentrated family ownership structure. Majority shareholders not only retain control of a company but also are engaged in managing it. Because of Pakistan’s common law background, the country’s legal system resembles the Anglo-American model; however, Pakistan’s ownership structure is the opposite of the Anglo-American structure of dispersed ownership. Corporate governance mechanisms
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Corporate govenance - Shoaib Anwar 11-10661 BUSN 305...

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