Managing Conflict of Interest - Organisation for Economic Co ...

Codes of Conduct in the Private Sector 169• Preparation of financial statements in line with applicableInternational Financial Reporting Standards (IFRSs) andmandatory requirements of the Ordinance (233, 234).Pakistan’s Accounting Framework: Consistent with InternationalBest PracticesIn Pakistan, listed companies are required to comply with theInternational Financial Reporting Standards issued by the InternationalAccounting Standards Board (IASB) as notified by the SECP.Except for IFRS-1 and IFRS-4, SECP has issued official notificationsregarding all the IFRSs for compliance in Pakistan. ICAP has alsodeveloped a strategy, whereby Pakistan is expected to becomefully compliant with IFRSs by 2009. Additionally, Pakistan has issuedtwo simplified financial and reporting standards for small and medium-sizedentities.Pakistan’s Code of Corporate GovernanceThe SECP has issued a Code of Corporate Governance, whichoutlines best practices in governance that all listed companies andbanks must comply with. This Code was drafted by ICAP’s Committeeand is enforced by SECP through its Rules of Stock Exchange.Relevant requirements are summarized below:• At least 25% of the board must comprise nonexecutivedirectors and at least one independent director.• A board director must not serve on the boards of morethan 10 listed companies, must be a taxpayer, and must notdefault on loans.• The board must define the responsibilities of the chairmanand CEO.• The board must approve the mission, vision, strategy, statementof ethics and business practices, and all major policies.A statement of ethics is required to be signed annually by allboard members and employees.• The board is required to exercise certain powers, approvethe key policy framework, and issue certain statements.• The chief financial officer (CFO) and the CEO must certify allfinancial statements before they are endorsed by the auditcommittee and approved by the board.ADB/OECD Anti-Corruption Initiative for Asia and the Pacific