GROUP DISCUSSIONS Youtube Channel: Shaikhain

IN THE BOARD ROOM: EVALUATE GOVERNANCE, RISK AND COMPLIANCES

The Board of Directors meeting of YAHYAH TEXTILES LIMITED, a listed company, is in progress. The meeting
started at 5 pm as against scheduled time 3 pm because CEO arrived late. The attendees were 25% of the total
directors. (Quorum S. 176**)

SOME FACTS: Company has 9 directors on its board. It is a family business of all the directors except the
nominated and an ED. However, this ED has to share blames of all ODDs and has to perform eventually every
directors’ functions. ED is answerable to the CEO/Chairman, the one boss. However other directors 3 of which are
full timers and remaining part timers, also get their instructions done through the efficient guy, the ED. ED is a
happy guy as after 20 years of service with the group, and after enjoying promotions has achieved this status. ED
also looks after finance, administration and HR departments and supervises the GM finance and internal audit,
also GM HR. However, the paper work of a corporate entity and of the CCG is properly prepared and managed as
if it is fully a compliant company. Apart, the Board should be happy from the results showing profit higher than
last year. The Company, in this year reviewed its HR policies including the succession planning where it is
proposed: retirement age was fixed to be 58 years for all employees except GM and above where it is 62 with
relaxation upto 65. Company has recently hired Head HR, who is reporting to Board through ED. Note: ED is also
supposed to be WHISTLE Blower. There are two internal audit departments; (1) headed by Chief Internal Auditor
reporting to CEO directly and (2) headed by Inventory Control Auditor reporting to ED directly – however also
secretly reports to all directors separately. (total strengths of both internal audit departments are only 2)

The following agenda has been placed before the BOD:

1. Repairing of the Admin Block of the Mills: Budget: Rs. 132,000/-

2. Promotion of Dy. GM Plants to GM Plants, if the resignation of outgoing GM Plants is accepted by the
CEO. GM plants has recently resigned after he was squeezed by his boss director productions, a family
member, however, this guy is a blue eye boys for the chairman.
3. Quarterly accounts : <showing a profit 7% higher than the last year corresponding quarter>
4. Interim dividend : proposed 5%
5. Report on negotiations and mediation with Labour Union.
6. Report on Medical Insurance plan and its budget approval, of the executives of the Company. The
insurance policy expired 5 months ago.
7. Staff Increments and promotions: proposed to be 7% cross the board. <Staff duly recommended by the
respective directors are entitled to the promotions, HR submitted list from each department>
8. Directors’ remunerations increase: it is recommended that the directors remunerations may be increased
by 30%. Board meeting attendance allowance may also be increased to Rs. 50,000 per meeting
9. Vehicle repairs: Rs. 225,000/-: 2 vehicles under use of 2 GMs, need overhauling
10. Approval of capital expenditure already incurred by director plants Rs. 33 Million.
11. Approvals of travelling expenses of directors and their families on business trip to Europe
12. Casual Vacancy: one director proceeding abroad for his Masters degree, for 9 months.
13. Report on Governance, Risk Management & HRM prepared by a committees under supervision of ED.
14. CSR Activities approval: One of the directors desires to extend facilitation funds to a politician.
15. Sales tax demand notice: received a week before, however, it compliance date is just tomorrow
16. HR Succession Planning and significant policy: approval (agenda item deferred in last 2 meetings)
17. To consider approval of a loan/financial assistance Rs. 100,000 to a junior staff member for his daughter
marriage, working since last 17 years.

DISCUSS & EVALUATE PERFORMANCE OF THE BOARD AS WELL AS THE COMPANY:

GROUP A: The Company’s Board (its one members plays Role of ED)
GROUP B: Independent Consultants/Corporate Risk Analyst
Authored by: Saeed A. Shaikh, Advocate & Corporate Consultant;
CEO – SHAIKHAIN Management & Law Consultants - ADR CENTRE
** S. 176: 1/3rd of the number of directors or 4: (listed company)