BRIEF ON CORPORATE GOVERNANCE

Glossary accountability acquisition

Glossary

AGM

annual report

audit report board of directors CEO CFO

The liability of a board of directors to shareholders and stakeholders for corporate performance and actions. Acquiring control of a corporation by stock purchase or exchange, either hostile or friendly. A company gathering, usually held at the end of each financial year, at which shareholders and management discuss the previous year and the outlook for the future, directors are elected and other shareholder concerns are addressed. An audited document issued annually by all publicly listed companies to their shareholders. Contains information on financial results and overall performance of the previous fiscal year and comments on future outlook Statement of the accounting firm's assessment of the validity and accuracy of a company's financial information and conformity with accepted accounting practices. The collective group of individuals elected by the shareholders of a corporation to oversee the management of the corporation on their behalf. The chief executive officer or CEO is the highest ranking officer of the company The corporate executive responsible for the financial planning and recordkeeping of a company

Chairman of the Highest-ranking director in a corporation's board of directors. Board Guiding principles for ensuring good corporate governance to which all code of best publicly listed companies should aim to follow. practice When someone is in a position of trust which requires them to exercise conflict of judgment on behalf of others and also has interests of the sort that might interest interfere with the exercise of their judgment, and which the person is ethically required to either eschew or openly attest. The term corporate governance refers to the rules and incentives by which the management of a company is directed and controlled so as to maximize the profitability and long-term value of the firm for its shareholders while into account the interests of other legitimate corporate governance stakeholders (Stone et al, 1998). The main players involved in corporate governance are directors, stakeholders and management. Corporate governance promotes transparency and accountability within corporate entity. A method of stock voting that permits shareholders to cast all votes for one candidate for the board. Minority shareholders may be able to elect cumulative one or more directors by giving all of their votes to one or several voting candidates. It is different from regular or statutory voting, in which shareholders must vote for a different candidate for each available seat. A person elected by shareholders to serve on the companys board of director directors The public dissemination of material, market-influencing information. disclosure A member of a company's board of directors who is also an employee of executive the company. director The release of all material, market-influencing information to the public at fair disclosure the same time. One who owes to another the duties of good faith, trust, confidence, fiduciary candor (Blacks Law Dictionary)

financial statement GAAP IAS

independent director individual investor initial public offering inside director

A written report that quantitatively summarizes the financial status of an organization for a stated period of time. Includes an income statement and balance sheet describing the flow of resources, profit or loss, and the distribution or retention of profits. A set of uniform accounting rules for recording and reporting financial information as established by the Financial Accounting Standards Board. Financial reporting standards created by the International Accounting Standards Committee in an effort to harmonize various practices all across the world A director who is not connected with the listed company or it promoters or directors on the basis of family relationship and who does not have any other relationship whether pecuniary or otherwise with the listed company, its associated companies, directors, executives or related parties. An individual who purchases generally small amounts of securities for his or her own account. The initial sale of stock by a company to members of the public

A member of a company's board of directors who is also an employee of the company. Buying or selling corporate stock by an insider, or an insider's disclosure insider trading of insider information Institutional investors include financial institutions (both banks and noninstitutional bank financial companies) and non-financial companies. These include investor both the public-owned as well as privately owned institutions. Institutional ownership is defined as share ownership by institutional institutional investors ownership Two or more corporate boards of directors that share at least two interlocking directorates directors in common. internal audit An evaluation of a company's financial health by its own employees. Process by which a company communicates with its shareholders and the investor investment community. relations The combination of two or more entities through a purchase acquisition or merger a pooling of interests. A person elected by shareholders to a corporation's board of directors non-executive who is not affiliated with the company in any other capacity. director The granting of authority by shareholders to others to vote their shares at AGM. It is a ballot by which shareholders can submit their votes without proxy physically attending the annual meeting. A document sent by publicly listed companies to their shareholders proxy statement providing material information on issues to be vote on at the annual general meeting. A report filed quarterly in accordance with Securities and Exchange quarterly report Commission of Pakistan regulations containing unaudited financial statements. The right of holders of common stock to vote on matters of corporate right to vote policy at companys annual meeting. A person or entity that owns shares of stock in a corporation or mutual shareholder fund. The monitoring of performance and corporate governance of portfolio shareholder companies by shareholders whether they are institutions, groups or activism individuals. A group, individual or an institution that takes action in an effort to shareholder influence management and effect change in the behavior of companies to activist increase shareholder value and promote corporate governance.

socially responsible investment stakeholder transparent market

Socially responsible investment (SRI) combines investors financial objectives with their commitment to social and environmental concerns. It permits investors to choose companies or funds that meet certain ethical and moral standards. Any group, individual or institution that has an interest in a company A market in which there is open communication between stakeholders, investors and company managers and all material information is readily available to the public.
A Publication of the SEC-UNDP Project on Corporate Governance For comments and queries contact: cgc@secp.gov.pk