Tag Archives: Global

No corruption survey in Pakistan this year!

Transparency International's world headquarters released the global network's 2010 Annual Report this week.

Transparency International Pakistan (TIP) Chairman Adil Gilani recently told The News that TIP will not be producing a survey report for 2011!

The democratically-elected government led by Pakistan Peoples Party was unhappy with the report issued in 2010 which placed the current PPP government amongst the most corrupt entities in the world. Respondents viewed this government as more corrupt than that of former dictator Gen Pervez Musharraf.

The 2010 report described three factors -lack of accountability, lack of merit in appointments and low salaries- as the main factors for rising corruption in the country.

Transparency International Pakistan’s (TIP) National Corruption Survey for Pakistan was embarrassing enough for the government that it not only harassed Adil Gilani, but also those students that were involved in the 2011 survey process.

Silent seats: the debate on women board members in Pakistan

On stage at the ACCA-Pakistan/IFC debate on women in the boardroom. (Photo: CIPE)

Fifty-one percent of Pakistan’s population is female, but only 3 percent of women in Pakistan are economically active. The recent World Economic Forum’s Global Gender Gap Report ranked Pakistan 132 out of 134 countries, down from 127 the year before.

One of the biggest challenges faced by the country is the low literacy rate especially for girls, compounded by a high school dropout rate. According to the Population Census the current female literacy stands at 36 percent. Astonishingly, starting at 33 percent enrolment at the primary level, only 6.59 percent enroll at the secondary level, and only 1.2 percent at the University Degree level.

Such sparse participation reduces the chances of females emerging in leadership roles both in the political structure as well as in businesses. Therefore, in Pakistan there are only a handful of professional women serving on corporate boards.

In partnership with the International Finance Corporation (IFC), the Association of Chartered Certified Accountants Pakistan (ACCA-Pakistan), the largest accounting body in the country, organized a debate focused on gender diversity on corporate boards. Dr Afra Sajjad, ACCA-Pakistan head of education and policy development, presented a research report on the subject.

Sajjad said that ACCA-Pakistan surveyed 303 publicly listed companies on Karachi Stock Exchange, of which, 31 percent or 93 companies had women on boards. Of that 57 companies were family owned where one or more family members together own more than 51 percent of shares.

The reports, however, revealed that despite women being on the board family businesses do not encourage women to actively participate in board decisions.

The ACCA/IFC debate focused on how to facilitate the process of bringing more women on corporate board. It was agreed that even the most enterprising professional women in Pakistan do not have the network within the corporate world, hence there is need for developing a platform to provide networking opportunities at an appropriate level.

Participants were also of the view that institutional efforts will be required to develop a database of prospecting women board members including conducting training programs. A smaller group was in favor of a legislation to compel listed companies to have a certain percentage of gender diversity on their board. Another view was to follow the natural process of talent cultivation and recognition.

Hammad Siddiqui, Senior Program Manager, CIPE-Pakistan shared CIPE’s experience of reforming the 2006 Trade Ordinance, which now requires at least two women board members on chamber boards across Pakistan.

ACCA aims to continue this debate and the next one is scheduled for the first week of June in Islamabad.

Family businesses in Pakistan share corporate governance stories

Dr. Daud had a lifelong dream of building a hospital in Pakistan, which originated from a promise he made to his ailing father. He built Maryam Memorial Hospital with the vision of “providing the best health care service at the most economical cost possible, thus broadening the base of health facilities for the people of Pakistan.”

Professional measures have helped the hospital develop a reputation as an institution of quality healthcare rather than as an oversized family clinic. There is an established system to document decisions and procedures related to professional ethics and practices. All staff members, including the new hires, are required to adhere to all 35 policies and procedures. It has helped develop organizational norms and a culture of accountability that can withstand staff turnover and external pressures.

Such professionalism was part of a deliberate effort to institutionalize the entity and downplay its connection to the family. As Dr. Daud’s son and partner in running Maryam Dr. Shimail noted, “Corporate governance has been the key to our success, as sticking to business ethics has resulted in carving out our identity. People trust us, for we watch out for their interests at all costs.”

In 2006, when CIPE initiated its work in Pakistan, one of the major initiatives was to introduce the concept of corporate governance in family businesses to help them be more sustainable. Maryam is just one example of that.

In the last five years, CIPE has been working with the Pakistan Institute of Corporate Governance and the Institute of Chartered Accountants of Pakistan to promote corporate governance among family businesses. After the launch of the Corporate Governance Guide for Family-Owned Companies in 2007, CIPE started direct engagement with family businesses across Pakistan in cooperation with regional chambers of commerce. As a part of that work, CIPE conducted one-day workshops focusing on directors, particularly those belonging to the second generation (and beyond) of family business owners.

Over 150 families have gone through the program, hosted by chambers of commerce in Karachi, Lahore, Rawalpindi, Islamabad and Faisalabad.

Traditionally Pakistani family-owned enterprises were unwilling to publically share information about how they operate their businesses. As a result of this continued work with family businesses, in mid-2010 when CIPE wanted to conduct case studies on corporate governance in family businesses, four companies volunteered to share information about their business structure and state of corporate governance. The case studies have just been published in Safeguarding the Legacy: Corporate Governance and Longevity in Family-Owned Enterprises. Maryam is one of them.

In the other cases, the family business of Mr. Siddique Sheikh combines respect for older generations with independent divisions each managed by a different family member to create a structure designed to be sustainable and flexible enough to adapt as needed; strong and early commitment to corporate governance allowed National Foods to become a prime source of employment for talented workers outside the founding family; and in the case of Ismail Industries Ltd., three brothers who had experienced a loss of a previous family business due to poor corporate governance started a new and growing venture on a foundation of good corporate governance.

As Moin Fudda, CIPE-Pakistan’s Country Director notes in the preface, “This publication will be used as a reference to provide corporate governance guidelines for the 50,000 family-owned businesses in Pakistan.”

Nightmare of Post-Floods Land Management in Pakistan

Photo: csmonitor.com

While for the most part living in the modern age of computerization and digital identification, Pakistan still languishes in a stone-age era when it comes to its land management system. According to a study, Land Administration System in Pakistan – Current Situation and Stakeholders’ Perception, conducted by Zahir Ali and Abdul Nasir, the current land administration system in the country is structured on traditional paper-based land registers and cadastral maps. A local land administrator, the so-called “Patwari,” is responsible for their maintenance and for reporting changes on land rights and boundaries of land parcels to the higher level authorities. In practice, the maintenance and quality as well as limited accessibility and reliability of these registers is often an issue.

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Bad Socioeconomic Conditions – Major Cause of Corruption in Pakistan

It is a generally accepted fact that good socioeconomic conditions can certainly help reduce corruption. People living in countries with acceptable living conditions, higher literacy rates, nurtured democratic systems and good governance are less poised to indulge in corruption. But corruption is not just linked with socioeconomic situation of a country. It also creates and reinforces a vicious cycle of bad governance. Therefore, it undermines democracy, not just the economic welfare. An article published in The News suggests:

    “Corruption in the public and private sectors both has greatly damaged the social and economic conditions of our nation. Corruption is not just a threat to the economic well being of individuals; it also affects democracy in an adverse manner.”

Pakistani Chambers – Becoming One Voice for the Business Community

Kashif Shabbir Pres RCCI joint declaration

Kashif Shabbir, President of the Rawalpindi Chamber of Commerce and Industry, delivers a joint declaration from the All Pakistan Chamber President's conference.

After four years of efforts to bring them together, this week, through CIPE’s assistance, 20 leading chambers from across Pakistan including representation from Federation of Pakistan Chambers of Commerce & Industry (FPCCI) spent two days at a conference to discuss economic challenges faced by Pakistani businesses, and business readiness to meet the challenges of economic recovery.

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Making Pots of Money

CIPE often hears from its partner organizations in the field how difficult it can be to get the local business community to support their work monetarily. This is a particular problem for groups that work to bring more people into the business community, focusing on encouraging youth and women to become entrepreneurs. One of CIPE’s partners in Nepal, Samriddhi, The Prosperity Foundation, found a simple and cheap way to start raising money within their local community for their work with youth, while at the same time building a brand for the organization.

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