Question & Answer: Review the website of the International Corporate Governance Network(ICGN) at www.icgn.org…..

A. ICGN Mission statement

International Corporate Governance Network (ICGN)’s mission is to promote effective standards of corporate governance and investor stewardship to advance efficient markets and sustainable economies world-wide.

Their policy positions are guided by the ICGN Global Governance Principles and Global Stewardship Principles, known as a statement on shareholder stewardship responsibilities both of which are implemented by:

• Influence policy by providing a reliable source of investor opinion on governance and stewardship;
• Connect peers at global events to enhance dialogue between companies and investors around long term value creation; and
• Inform dialogue through knowledge and education to enhance the professionalism of governance and stewardship practices.

B.    this organization can affect corporate governance in the business world in following ways-

The investor-led organisation International Corporate Governance Network (ICGN) was set up by individuals centered around the ten largest pension funds in the world 1995. The aim is to promote global corporate governance standards. The network is led by investors that manage 26 trillion dollars and members are located in fifty different countries. ICGN has developed a suite of global guidelines ranging from shareholder rights to business ethics.

The ICGN Global Governance Principles (GGP) is focused around company governance and how board directors should promote successful companies, thereby creating sustainable value creation for investors while having regard to other stakeholders

The GGP should be read alongside the ICGN Global Stewardship Principles(GSP)which set out best practices in

relation to investor governance and stewardship obligations, policies and processes. These two documents promote ICGN’s longheld position that both companies and investors share a mutual responsibility to preserve and enhance long-term corporate value, and thereby contribute to sustainable capital markets and societal prosperity.

The ICGN Global Governance Principles (GGP):-

Principle 1: Board role and responsibilities

The board should act on an informed basis and in the best longterm interests of the company with good faith, care and diligence, for the benefit of shareholders, while having regard to relevant stakeholders, including creditors.

Principle 2: Leadership and independence

Board leadership callsfor clarity and balance in board and executive roles and an integrity of process to protect the interests of minority investors and promote success of the company as a whole.

Principle 3: Composition and appointment

There should be a sufficient mix.of directors with relevant knowledge, independence, competence, industry experience and diversity of perspectives to generate effective challenge, discussion and objective decision-making.

Principle 4: Corporate culture

The board should adopt high standards of business ethics, ensuring that its vision,mission and objectives are sound and demonstrative of its values.Codes of ethical conduct should be effectively communicated and integrated into the company’s strategy and operations, including risk management systems and remuneration structures.

Principle 5: Risk oversight

The board should proactively oversee, review and approve the approach to risk.management regularly or with any significant business change and satisfy itself that the approach is functioning effectively.

Principle 6: Remuneration

Remuneration should be designed to effectively align the interests of the CEO and executive officers with those of the company and its shareholders to help ensure longterm performance and sustainable value creation. The board should also ensure that aggregate remuneration is appropriately balanced with the needs to pay dividends to shareholders and retain capital for future investment.

Principle 7: Reporting and audit

Boards should oversee timely and high quality company disclosures for investors and other stakeholders relating

to financial statements, strategic and operational performance, corporate governance and material environmental and social factors. A robust audit practice is critical for necessary quality standards.

Principle 8: Shareholder rights

Rights of all shareholders should be equal and must be protected. Fundamental to this protection is ensuring that shareholder voting rights are directly linked to the shareholder’s economic stake, and that minority shareholders have voting rights on key decisions or transactions which affect their interest in the company.

Thus the ICGN offers “policy” guidance in several areas. Let us select one and summerized as below how that guidace contributes to the general discussion on the corporate governance.

Board role and responsibilities

The board should act on an informed basis and in the best long.term interests of the company with good faith, care and diligence, for the benefit of shareholders, while having regard to relevant stakeholders, including creditors.

Guidance

1 Responsibilities

The board is accountable to shareholders and relevant stakeholders and,responsible for preserving and enhancing sustainable value over the long-term. In fulfilling their role effectively, board members should:-

a) guide, review and approve the company’s mission and purpose, its corporate strategy and financial planning, including major capital expenditures, acquisitions and divestments;

b) monitor the effectiveness of the company’s governance, environmental.policies, and social practices, and adhere to applicable laws;

c) embody high standards of business ethics and oversee the implementation.of codes of conduct that engender a corporate culture of integrity;

d) oversee the management of potential conflicts of interest, such as those.which may arise around related party transactions.

e) oversee the integrity of the company’s accounting and reporting systems,compliance with internationally accepted accounting standards, the effectiveness of systems of internal.control, and the independence of the external audit process;

f) oversee the implementation of effective risk’management and proactively review the risk management approach and policies annually or with any significant business change;

g) ensure a formal, fair and transparent process for nomination, election and’evaluation of directors;h) appoint and if necessary remove, the chief executive officer (CEO) and develop a CEO succession plan which should be regularly reviewed;

i) align CEO and senior management remuneration against appropriate performance criteria with the longer-term interests of the company; and

j) conduct an objective board evaluation on a regular basis, consistently seeking to enhance board effectiveness including an external review, once every three years.

2.Dialogue

The board, particularly non’xecutive directors, should make available communication channels for meaningful dialogue on governance matters with shareholders, creditors and other stakeholders as appropriate. Boards should clearly explain such procedures to shareholders, including how they assess stakeholder input, and provide guidance relating to compliance with disclosure and other relevant market rules.

3. Commitment

The board should meet regularly to discharge its duties and directors should’allocate adequate time to board meeting preparation and attendance. Board’members should know the business, its operations and senior management well enough to contribute effectively to board discussions and decisions.

4. Directorships The number, and nature, of board appointments an individual director holds (particularly the chair and executive directors) should be carefully considered and reviewed on a regular basis and the degree to which each individual director has the capacity to undertake multiple directorships should be clearly disclosed. This consideration should reflect the nature of existing board commitments, as well as any commitments relating to foundations or charities.

5. Induction

The board should have in place a formal process of induction for all new directors so that they are well informed about the company as soon as possible after their appointment. This includes building an understanding of its strategy, business operations, regulatory obligations and other fundamental business drivers. Directors should regularly refresh their skills and knowledge, through training as required, to discharge their responsibilities.

6 . Committees

The board should establish committees to deliberate on issues such as audit, executive and non-executive director remuneration and director nomination.Where the board chooses not to establish such committees, the board should disclose this and the procedures it employs to discharge its responsibilities effectively in an independent manner. The duties and membership of such committees should be fully disclosed.

7. Advice

The board should receive advice on its responsibilities under relevant law and regulation, usually from the company secretary or an in-house general counsel. In addition, the board should have access to independent advice as appropriate and at the company’s expense.

8 Access to management

The board should have a process where directors, including independent non-executive independent directors, can have access to a company’s executive management and other relevant senior management.

Thus, the guidace contributes to the general discussion on the corporate governance.