Ethics

Business Functions

- High level groupings of business processes and capabilities that describe a business at its highest level.

Corporate Governance

- application of best management practices, compliance of law in true letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders.

Why Corporate Governance?

Better access to external finance Lower costs of capital - interest rates on loans Improved company performance - sustainability Higher firm valuation and share performance Reduced risk of corporate crisis and scandals

Good Board Practices

Clearly defined roles and authorities Duties and responsibilities of Directors understood Board is well structured Appropriate composition and mix of skills

Compliance of law in letter & spirit

Compliance of law in letter & spirit- to ensure value enhancement for all stakeholders guaranteed by the law for maintaining socio-economic balance.

Accountability

Ensure that management is accountable to the Board Ensure that the Board is accountable to shareholders

Transparency

Ensure timely, accurate disclosure on all material matters, including the financial situation, performance, ownership and corporate governance.

Transparent Disclosure

Financial Information disclosed Non-Financial Information disclosed Financials prepared according to International Financial Reporting Standards (IFRS) Companies Registry filings up to date High-Quality annual report published Web-based disclosure

Design

Firms may prioritize the design of products and services such that it stands out as its own top level business function.

Human Resources

Functions related to employees such as recruiting, performance, management, benefits and organizational culture.

Finance

Funding, managing, budgets, accounting, financial controls and audits.

Elements of Corporate Governance

Good board practices Control Environment Transparent disclosure Well-defined shareholder rights Board commitment

Control Environment

Internal control procedures Risk management framework present Disaster recovery systems in place Media management techniques in use Business continuity procedures in place Independent external auditor conducts audits Independent audit committee established Internal audit function Management information systems established Compliance function established

Customer Service

Managing relationships with customers and handling requests such as inquiries and returns.

Marketing

Marketing processes such as promotion, pricing, distribution, and sales.

Well-Defined Shareholder Rights

Minority shareholder rights formalised Well-organised shareholder meetings conducted Policy on related party transactions Policy on extraordinary transactions Clearly defined and explicit dividend policy

Operations

Operations is a catch-all term for the core business processes of an organization. This differs from industry to industry. A manufacturing firm may view sourcing and distribution as operations. An IT firm may view operations as the process of deploying, maintaining, and supporting IT services and infrastructure.

Independence

Procedures and structures are in place so as to minimise, or avoid completely conflicts of interest. Independent Directors and Advisers i.e. free from the influence of others.

Production

Production such as the manufacturing of products or delivery of services.

Fairness

Protect Shareholders rights Treat all shareholders including minorities, equitably Provide effective redress for violations

Quality

Quality control that tests outputs for conformance to specifications and quality assurance from a more strategic viewpoint such as addressing the root cause of quality problems.

Sourcing

The end-to-end process of purchasing materials, components, supplies and services. This includes purchasing, supply chain, management, logistics and strategic partnerships.

Research and Development

The process of innovating including market research, business experimentation, and product development.

Distribution

The process of reaching the customer with your products and services.

Governance

The direction and control of a firm. Manages the performance of management.

Four Pillars of Corporate Governance

Accountability Fairness Transparency Independence

Good Board Procedures

Appropriate Board procedures Director Remuneration in line with best practice Board self-evaluation and training conducted

Strategy

The development of strategy and implementation of change.

Board Commitment

The Board discusses corporate governance issues and has created a corporate governance committee The company has a corporate governance champion A corporate governance improvement plan has been created Appropriate resources are committed to corporate governance initiatives. Policies and procedures have been formalised and distributed to relevant staff A corporate governance code has been developed A code of ethics has been developed The company is recognised as a corporate governance leader

Information Technology

The development and operation of system and applications.

Corporate Governance

applies to all types of organisations not just companies in the private sector but also in the not for profit and public sectors Examples are NGOs, schools, hospitals, pension funds, state-owned enterprises.

Conduct of business

in accordance with shareholders desires (maximizing wealth) while confirming to the basic rules of the society is embodied in the Law and Local Customs.

Corporate governance

may be defined as a set of systems, processes and principles which ensure that a company is governed in the best interest of all stakeholders. It is the system by which companies are directed and controlled.

Effective management and distribution of wealth

to ensue that enterprise creates maximum wealth and judiciously uses the wealth so created for providing maximum benefits to all stake holders and enhancing its wealth creation capabilities to maintain sustainability.

Application of best management practices

to ensure excellence in functioning of enterprise and optimum creation of wealth on sustainable basis.

Sustainable development of all stake holders

to ensure growth of all individuals associated with or effected by the enterprise on sustainable basis.

Adherence to ethical standards

to ensure integrity, transparency, independence and accountability in dealings with all stakeholders.

Discharge of social responsibility

to ensure that enterprise is acceptable to the society in which it is functioning.