Submitted by:

P.L.Vinayak (221115),
P.Shiva Shanker Reddy (221117),
P.V.N.Rajeev (221128),
Kiran Patil (221122).
 Corporate governance is the set of processes, customs,
policies, laws and institutions affecting the way a corporation
is directed, administered or controlled

 Corporate governance also includes the relationships among

the many stakeholders involved and the goals for which the
corporation is governed

 Corporate governance is a multi-faceted subject

 There has been renewed interest in the corporate governance

practices of modern corporations since 2001, particularly due
to the high-profile collapses of a number of large U.S. firms
such as Enron Corporation and WorldCom

 Sound corporate governance is reliant on external marketplace

commitment and legislation, plus a healthy board culture
which safeguards policies and processes'
 It is a system of structuring, operating and controlling a
company with a view to achieve long term strategic goals to
satisfy shareholders, creditors, employees, customers and
suppliers, and complying with the legal and regulatory
requirements, apart from meeting environmental and local
community needs.

 It is about commitment to values, about ethical business

conduct and about making a distinction between personal &
corporate funds in the management of a company

 The definition is drawn from the Gandhian principle of

trusteeship and the Directive Principles of the Indian
Constitution. Corporate Governance is viewed as ethics and a
moral duty
 In the 19th century, state corporation laws enhanced the
rights of corporate boards to govern without unanimous
consent of shareholders in exchange for statutory benefits
like appraisal rights, to make corporate governance more
efficient

 The concerns of shareholders over administration pay and

stock losses periodically has led to more frequent calls for
corporate governance reforms

 Over the past three decades, corporate directors’ duties have

expanded greatly beyond their traditional legal responsibility
of duty of loyalty to the corporation and its shareowners

 The lack of corporate governance mechanisms highlighted the

weaknesses of the institutions in their economies.
o Corporate governance, simply stated is therefore, a system by
which corporate entities are directed and controlled.

o corporate governance as 'an internal system encompassing

policies, processes and people, which serves the needs of
shareholders and other stakeholders, by directing and
controlling management activities with good business savvy,
objectivity and integrity………by Gabrielle O'Donovan
o The three major players in the area of corporate governance,
within the corporation, are the corporate boards, shareholders
and employees.

Board Of Directors (BOD):

o BOD’s are responsible for the governance of their corporations
o The roles of BOD and shareholders are interactive and therefore,
the quality of governance depends upon the level of interface
established by them
o The quality of board depends upon number of other factors such
as its size, its composition, the competency of the chairman of
the board, power and position of CEO and competencies of
individual directors, nominee directors and non executive
directors
o Sir Rober Brown well defined the functions of the directors of
the board, when he stated that Board was responsible for
laying down matters of principle and of accounting, statistical
and management procedures

o It was also responsible for the decision of what products to

make, which markets to penetrate and determination of
manufacturing capacity and its gainful utilization and
investment decision

o Directors are also concerned with performance and they

review the budget proposals as well as monitor performance

o Ideally the BOD should be the heart and soul of a corporate

o Boards, all over vary greatly in the value they add. Some
boards are positive instigators and enablers of change, while
others are bystanders or even obstacles to progress.
 
 Over the years the following duties have been evolved by the
court of directors under the common law:
 
o Duties of care and skills in the discharge of function as
directors.
 
o Duty to attend Board meetings and devote sufficient time and
attention to affairs of the company.
 
o Duty not to be negligent and not to commit or let others
commit tort-liable acts.
 
o Duty not to exceed powers.
 
o Duty to have regard to and act in the best
interest of the company and its stake holders and
consumers
o Duty to creditors if business is conducted with
intent to defraud them
 
o Duty of confidentiality
 
o Duty not to secret profit and make good losses, if
occurred due to breach of duty, negligence etc
 
o Duty not to exceed power for collateral purposes
 
o Duty not to misapply company assets
 
o Duty not to compete with the company
 It is the representative of share holders to insure the
company has clear goals and to measure progress against
these goals.

 The board will agree the strategy and resources to achieve it.

 The chief executive is appointed by the board which monitors

his or her performance

 Because of the absolute importance of human resource to

achieve the agreed strategy the board must annual review
succession and management development plans.

 The board will need to set down and monitor the operating
climate in the company through a statement of values that
describes the character of the company and policies that
reflect these values.
o Limiting senior executive’s compensation.

o Full environmental protection.

o Avoidance of fraud within the company.

o Hiring and firing the key executives.

o Caring for employees

o Insuring active participation in local community

welfare schemes.
 Each company will have its own need and criteria for
selection of chairman, while the board will be finally
responsible for setting up of strategy, the initiator will
normally be the chief executive.

 The chairman however, is the leader of the group and

therefore must set the standards requires from the board
colleagues

 As the chairman, is also the link between board and

shareholders, he or she needs to satisfy with the corporate
reporting to them these will include the interim and annual
results, annual reports, AGM and the periodic reports on
special occasions’ such as during take over’s
 Role:
 In order to ensure greater depth of understanding,
committees of the board are an effective way to raise
standards provide the required level of reassurance and
obtain greater coverage by directors.

 The most important three committees which are

normally constituted are:

6. Audit committee

8. Remuneration committee

10.Nomination committee
The Audit Committee:
it provides checks against the executive with the ability to
review systems and internal control.

The Remuneration Committee :

The most important rule of remuneration committee,
therefore, is to have an appropriate reward policy that can
attract retain and motivate directors to achieve the long term
goals of the company.

The Nomination committee:

It is usually chaired by companies’ chairmen and is the
vehicle by which new non-executive directors are brought for
selection. Usually they will discuss and agree the brief,
choose the search firms, agree the short list and interview the
final candidates
 In the recent years, there have been considerable concerns in
India and other countries above standard of corporate
governance.

 While the company law and in common law directors are

obliged to act in a best interest of shareholders, there have
been many instances of board room behavior difficult to
reconcile with these ideal.

 In the train of these and many scandals there has been

increasing and violent demand for greater transparency and
good corporate governance.

 A national task for corporate governance was set up in mid

1996 under the leadership of Rahul Bajaj, past president, CII
and CMD, Bajaj auto limited.
PURPOSE:
The Board of Directors (the “Board”) of Orascom
Construction Industries S.A.E. (the “Company”) has adopted
the following corporate governance guidelines to provide a
framework for the effective governance of the Company in
an effort to enhance long-term shareholder value.

BOARD RESPONSIBILITIES:

1. Reviewing, approving and monitoring

2. Assessing the major risks

4. Selecting and recommending director

5. Selecting, developing and evaluating potential

candidates

6. Determining the compensation of the chief executive

officer,

7. Overseeing the integrity of the Company’s financial

statements

8. Assessing the adequacy of the Company’s Code of

Business Conduct and Ethics

9. Evaluating the overall performance and effectiveness of

the Board
• Directors should be willing to devote sufficient time to
carrying out their duties and responsibilities effectively.

• The Nominating and Corporate Governance Committee of the

Board shall have the responsibility to identify individuals
qualified to become directors and to recommend to the Board
the nominees to stand for election as directors at the annual
meeting of shareholders.
•The Board shall be comprised of not less than nine directors.

• Directors shall be elected by shareholders at the first annual

general meeting ,re-election thereafter at intervals of no more
than three years.

•One of the directors shall serve as the Chairman of the Board.

•The Chairman of the Board shall be selected by the affirmative

vote of the majority of the directors.

•The Board will meet at such times as shall be determined by its

Chairman, or upon the request of any two of its directors. The
Board shall meet at least six (6) times a year.

•The agenda of each meeting will be prepared by the Chairman of

the Board
•The Board will keep a written record of its meetings.

BOARD COMMITTEE:

The Board has established the following committees to assist the

Board in discharging its oversight responsibilities: Audit,
Compensation, and Nominating and Corporate Governance.

EXECUTIVE SESSIONS:

“Non-management” directors are all those who are not Company

executive officers, including such directors who are not
independent by virtue of a materials relationship, former status or
family membership, or for any other reason. The non-management
directors shall designate one among them as the presiding director
to lead the executive sessions. The name of such lead non-
management director should be publicly disclosed to the extent
required under any applicable securities laws and stock exchange
regulations.
In discharging its oversight role, the Board is empowered to
investigate any matter brought to its attention with full access
to all books, records, facilities and personnel of the Company
and the power to retain outside counsel, auditors or
consultants, or incur other expenses for this purpose, which
expenses the Company shall pay.

DIRECTOR COMPENSATION:

The Compensation Committee of the Board shall have overall

responsibility for the evaluation and approval of the form and
amount of director compensation.
DIRECTOR ORIENTATION AND CONTINUNING
EDUCATION:

The Nominating and Corporate Governance Committee of the

Board shall maintain an orientation program for new directors
and organize continuing education programs for all directors.

MANGEMENT EVALUATION AND SUCCESION:

The Compensation Committee of the Board shall have the direct

responsibility to review and approve the corporate goals and
objectives relevant to the compensation of the chief executive
officer and to evaluate the performance of the chief executive
officer in light of those goals and objectives.
ANNUAL PERFORMANCE EVALUATION:

The Board will conduct an annual self-evaluation to determine

whether it and its committees are functioning effectively.

RELATION WITH SHAREHOLDERS:

The Chairman of the Board should maintain sufficient

contact with major shareholders to understand their
issues and concerns and should ensure that the views
of shareholders are communicated to the Board as a
whole.
Thank you