Weakness Recommendation

No AGM are conducted By

AGM should be conducted at
CCA. CCA think conducting
least annually ensuring that
AGM are just a time consumer
there is effective
and has not been conducting
communication between
AGM rather has been
shareholders and company.
focusing on daily operating
(1marks)
efficiency) (0.5)
Board Should take
Corporate governance
responsibilities in sustainability
Principle requires shareholders
of business in long term
to be informed about the
focusing on strategic goal
company affairs and maintain
rather than daily activities.
Good shareholders
relationship.
Board is engaged with daily
operation rather than focusing
on strategic development
which is against good
corporate governance
practice.
This means that shareholders
should be communicated with
every bit of information of
company which is not seen in
CCA.
(0.5)
Sufficient numbers of NEDS are At least 3more NEDs should be
lacking as required by recruited excluding Chair-
principle. (There are 3NEDS & person to ensure balance
5EDS in the board of CCA and board. (1)
the board is not balanced) 0.5
There should be balance
between EDs and NEDs in the
company which is not case
here.
C.G. requires at least 50%
NEDS to be on the board.
Outnumbered EDs could easily
pass their proposal in Board
meeting reducing the
effectiveness. (0.5)
No chair-man is appointed. Mr Chair should be appointed on
Govinda Raj panta leads the an independent basis ( should
company and board. not be any close family
CEO has unfettered power and members, major……..) and
lacks the principle that given role to lead the board.
different person should lead
board and company.
Mr Govinda Raj panta cannot
fit in both roles as it gives
much power soley to him so
that he could influence any of
the decisions.
Independence of the NEDs are No person related to ED
hindered. should be recruited as NEDS
rather they should be
As Friends or relative are
replaced with independent
recruited as the NEDs, it does
individuals with qualification.
not fulfill the principle of
Corporate Governance for
NEDs to be Independent.
As a result newly recruited
NEDs will tend to work in
favor of CEO.
There is no nomination Nomination Committee should
committee. be set up with maximum
CEO has responsibility of numbers being independent
appointing the EDs which is NEDs ensuring no “Jobs for
against the corporate boys”.
governance practice.
CEO again will gain unfettered
power as the person recruited
by him are unlikely to question
his decision.
As a result there might be
unqualified member on board
thereby reducing
effectiveness.
Appointment of Auditor does Shareholders should appoint
not seems to be rational. Auditor rather than CEO
Currently CEO is appointing himself ensuring the
Auditor which contradicts the independence of the auditor.
corporate governance
requirement.
As a result auditor might work
on favour of CEO as he is the
one who recruited them.
Executive Director is also a Finance Director should be
member of Audit Committee. removed from Audit
Finance Director sits on Audit Committee and Independent
committee. So, the NED with Expertise in Finance
independence of Audit Affair should be Appointed.
Committee is Hindered as
finance director can influence
and manipulate the things and
will not communicate errors
which is under his
responsibility.
There is no Remuneration Remuneration committee
Committee. should be set up with
Principle Requires No one Independent NEDs and Should
should be responsible for be responsible for setting pay
setting his own pay which lacks ensuring None are envolved in
here. setting their Own pay.
Mr Silwal has sole
responsibility of Setting
Remuneration Package and he
might give higher
Remuneration for his close
friends and families and
himself there by reducing the
Fairness Of remuneration.
Tenure of Directors are not Tenure of director should be
specified. specified ensuring none of
Good Corporate governance them serve for more than 9
practice requires directors to years.
be independent.
If their tenure are not specified
their independence will be
affected there by reducing
their objectivity.