The IFC Pakistan Corporate Governance Project

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The IFC Pakistan Corporate Governance Project
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• The Goal of the Pakistan CGP is to improve
  Corporate Governance in the Country

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Pakistan Corporate Governance Project

• Assist public sector to build appropriate
• legal and regulatory framework
• Develop or amend laws and regulations(SECP/SBP)
• Develop listing rules
• Introduce cg guidelines/handbooks

• Develop equity markets
• Raise awareness of cg among investors
• Provide institutional investors with assessment
  tools
• Work with exchanges to develop corporate
  governance assessment
• tools

• Help banks create demand for cg among clients
• Raise awareness of cg
• Provide banks with cg assessment tools
• Train banks to assess cgof their corporate
  clients

• Generate demandfrom within banks companies
• Raise awareness
• Train directors and mgmt.
• Provide advisory services

• Build Sustainable Institutional Capacity
• Strengthen the Pakistan Institute of Corporate
  Governance
• Train press on cg
• Support universities to introduce curricula, and
  conduct and publish research

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Pakistan Corporate Governance Project

1. MOU with SECP
2. Assist in promoting good corporate governance
   practices within Pakistani Companies and
   Financial Institutions
3. Advise Public Sector on how to improve upon legal
   and regulatory frameworks for Corporate
   Governance
4. Capacity Building of the Pakistan Institute of
   Corporate Governance (PICG)

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Pakistan Corporate Governance Project

• IFC will Assist PICG in Five Key Areas
• Setting up training and certificate/certification
  programmes on corporate governance for company
  directors, managers and secretaries
• Building capacity for research and development to
  conduct surveys, issue publications and produce
  best practices manuals/handbooks.
• Developing and providing consulting and advisory
  services on corporate governance to Pakistani
  banks and companies
• Raising awareness of corporate governance
  practices through conferences, seminars,
  roundtables and workshops
• Providing policy advice to the government on
  legal and regulatory reforms relating to
  corporate governance

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Pakistan Corporate Governance Project
IFCs interventions will be both direct on its
own, and through the PICG. The idea is that PICG
should be strengthened so that it becomes a
leading provider of knowledge and awareness
related to corporate governance practices in
Pakistan
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How IFC Can Support Companies
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I. Corporate Governance Improvement Plan

• Objective To demonstrably improve upon the cg
  practices of Companies
• Step 1 Desk research and analysis
• Legal and regulatory review
• Internal company document
• Questionnaire, completed by client
• Step 2 On-site assessment-interviews
• Complete set of interviews with entire board,
  senior management and outside stakeholders (e.g.
  legal counsel, external auditor)
• On-site training possible
• Step 3 Assessment Report - drafting final CGA
• Compare current cg structure with national and
  int. reference points for good cg
• Focus on 4 areas (i) commitment (ii) board
  practices (iii) protection of (minority)
  shareholder rights and stakeholders and (iv)
  transparency and disclosure, including internal
  and external controls

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Core Tool Simple Progression Matrices

• A Self-Assessmentand Client Orientation Tool

LEVELS
1. Acceptable 2. Extra Steps 3. Major Contributions 4. Leadership
Commitment to Good Corporate Governance
Structure and Functioning of the Board of Directors
Transparency and Disclosure
Treatment of Minority Shareholders
PROGRESSION
ATTRIBUTES
Our aim is to assist companies in progressing to
Level 4 in CG
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Corporate Governance Improvement Plan A
Preliminary Timeline
ID Task 2nd Quarter 2nd Quarter 2nd Quarter 2nd Quarter 2nd Quarter 2nd Quarter 3rd Quarter 3rd Quarter 3rd Quarter
ID Task Apr May Jun Jul Aug Sep Oct Nov Dec
1 Client completes questionnaire, sends key corporate documents                  
2 IFC conducts on-site interviews          
3 Analysis and report drafing          
4 Delivery of draf report          
5 Consultation with stakeholders          
6 Board presentation of final report          
7 Support (separate mandate)                  
4 weeks
1 w.
6 weeks
4 weeks
Ongoing
Deliverable Final CG Improvement Plan report
includes - Corporate governance assessment-
Recommendations, prioritized according to
importance- Agreed-upon action plan- Model
documents
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II. Corporate Governance Assessment Tool to Help
Companies Minimize Porfolio Risk

• Develop Corporate Governance Assessment Tool
• Based on IFCs own tools, tailored to Pakistans
  market
• Train relevant staff on corporate governance
• Comprehensive, cover all key areas of cg
• Interactive training events, based on case
  studies

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Corporate Governance Assessment Tool A
Preliminary Timeline
ID Task 2nd Quarter 2nd Quarter 2nd Quarter 2nd Quarter 2nd Quarter 2nd Quarter 3rd Quarter 3rd Quarter 3rd Quarter
ID Task Apr May Jun Jul Aug Sep Oct Nov Dec
1 Develop assessment tool                  
2 IFC conducts on-site interviews          
3 Analysis and drafing          
4 Delivery of draf assessment tool          
5 Consultation with stakeholders          
6 Presentation delivery of final report          
7 Training                  
4 weeks
1 w.
6 weeks
4 weeks
8 weeks

• Deliverable
• Assessment manual on how to identify key
  corporate governnace issues
• Comprehensive training for staff

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Summary and Conclusions

• Put most simply, corporate governance is defined
  as a series of structures and processes for the
  direction control of a company.
• Corporate governance must not to be confused with
  public governance, CSR or business ethics.
• Corporate governance finds its roots in the
  separation of ownership and control, as well as
  corporate crisis.
• Corporate governance is regulated by and external
  (laws regulations) and internal framework
  (charters, by-laws, etc.).
• For more information, pls. visit our website
  under www.ifc.org/corporategovernance/

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Thank you for your attention!Questions?