Governance Guidelines

Vigeo International Pvt. Ltd. Corporate Governance Guidelines

Adopted November 14, 2005

The following Corporate Governance Guidelines (the “Guidelines”) have been adopted by the Board of Directors (the “Board”) of Vigeo International Pvt. Ltd. (the “Company”) consistent with corporate governance initiatives by the Companies Ordinance, Govt. of Pakistan, and in an effort to assist directors in fully understanding and effectively implementing their functions while assuring our Company’s ongoing commitment to the highest possible standards of corporate conduct and compliance.

Although each of our directors is expected to fulfill his or her duties as such in an overall spirit of good corporate conduct, these Guidelines are intended to provide a framework for our system of corporate governance and to address specific issues pertaining to our Company’s governance, including:

  • Role of the Board and Director Qualifications;
  • Director Responsibilities;
  • Committees of the Board;
  • Director Access to Officers and Employees;
  • Director Compensation;
  • Director Orientation and Continuing Education;
  • Evaluation of the CEO; and
  • Annual Performance Evaluations.

New and continuing members of the Board are encouraged to periodically review these guidelines and to continue to foster a corporate culture focused on efficient and ethical management and governance.

Role of the Board and Director Qualifications

  1. The Board of Directors is the ultimate decision-making body of the Company except with respect to those matters reserved to the stockholders. Day-to-day operation of the Company is the responsibility of management. The Board reviews the selection of the senior management team (executive vice president level and above). While there is no expectation of any succession at the highest level of management for at least the next several years, the Board will approve in advance any person to be named as a successor to the Chairman or Chief Executive Officer. The Board also acts as an advisor and counselor to senior management and ultimately monitors its performance. Although the Board believes that directors should be sensitive to the needs of employees, suppliers, creditors, customers and the community in evaluating the affairs of the Company, the Board believes the primary responsibility of the directors and management is to the Company’s business. R&D and financials.
  2. It is the general policy of the Company that all major decisions be considered by the Board as a whole. As a consequence, the committee structure of the Board is limited to those committees considered to be basic to, or required for, the operation of a private limited company.
  3. The Board at least annually will review the qualifications of new and existing Board members, considering the level of independence of individual members, together with such other factors as the Board may deem appropriate, such as overall skills and experience. The Board will also evaluate its composition as a whole and each of its committees to ensure the Company’s on-going compliance with the independence and other standards set by Companies ordinance Govt. of Pakistan.
  4. Nominees to the Board will be selected based on these principles and in a manner consistent with these Guidelines and applicable rules and regulations, and invitations to join the Board will be extended by the Chairman of the Board. Although the Board currently consists of seven members, we may consider expanding the size of the Board to accommodate qualified candidates who bring to bear unique or desirable skills and experience.
  5. Ordinarily, Directors should not serve on more than four other boards of public companies in addition to the Company Board. Positions in excess of these limits may be maintained only if the Board of Directors determines that doing so would not impair the Director’s service on the Company’s Board. Final approval of a candidate is determined by the full Board. The Compensation Committee annually reviews the compensation of Directors. Directors must advise the Chairman of the Board prior to accepting any invitation to join the board or compensation committee of any other company or of any other significant change in their employment.
  6. We have determined as a Board not to establish term limits with regard to service on the Board in the belief that, while new members may bring new ideas and a fresh outlook to the Board, those advantages may often be outweighed by the cost of losing the contribution of Board members who have developed a more in-depth understanding of the Company and its business over time and, as a consequence, may bring a more seasoned approach to the Company’s governance.

Director Responsibilities

  1. The basic responsibility of each director is to act on the basis of his or her informed business judgment in a manner each director reasonably believes to be in the best interests of the Company. In discharging their obligations to the Company, members of the Board are entitled to rely, to the extent reasonable, on the honesty and integrity of the Company’s management and its outside auditors and advisors.
  2. As part of their fiduciary duty to the Company, members of the Board are expected to prepare for and attend, either in person or telephonically, as applicable, all meetings of the Board and any committee of the Board on which they serve. It is incumbent upon the Chairpersons of the Board and of any such committees and of the other individual members of the Board to assure that such meetings are scheduled and held in a manner and with such frequency as is sufficient to provide for the efficient and responsible oversight of the Company.
  3. The Chairman of the Board or applicable committee of the Board or his or her designee will prepare and distribute in advance of any such meeting an agenda of the topics to be reviewed, discussed and/or acted upon at such meeting. It is understood that certain items pertinent to the advisory and monitoring functions of the Board will be brought to it periodically for review and/or decision. For example, the annual corporate budget is reviewed by the Board. Agenda items that fall within the scope of responsibilities of a Board committee are reviewed with the chair of that committee. Individual directors are free to request additions to the agenda or otherwise raise questions regarding the agenda either prior to or during any such meeting. Information and data that are important to the directors’ understanding of the business to be conducted at any such meeting should, to the extent practicable, be distributed to the appropriate directors sufficiently in advance of any such meeting, and each director should endeavor to fully review any such materials prior to attending the meeting.
  4. In addition to any other regularly-scheduled meetings of the Board, the non-management members of the Board will meet in executive session at least quarterly and the independent directors each will meet in executive session at least once annually. The chairs of the Audit and Compensation Committees of the Board each preside as the chair at meetings or executive sessions of the outside Directors at which the principal items to be considered are within the scope of the authority of his or her committee. When there are no such principal items, such chairs will alternate as the Director presiding at such meeting.
  5. The Board believes that the Chairman should have discretion to invite to Board meetings the members of management the Chairman deems appropriate, subject to the Board’s right to request that such attendance be limited or discontinued. In addition, the Board believes that it would be beneficial for managers to make presentations to the Board from time to time, to permit the Board to meet these officers in person.
  6. As necessary or appropriate in connection with the discharge of its duties, the Board and each committee thereof will be entitled and empowered to engage and seek the advice of outside legal, financial and other advisors.

Committees of the Board

  1. As provided in the Company’s laws, the Board may from time to time establish such committees as it deems appropriate. However, in accordance with rules, the Company will at all times have an Audit Committee and a Compensation Committee. They will be appointed to serve on such committees by the Board. The members of the Audit and Compensation Committees shall be “independent directors”. In particular, a director shall be considered to be “independent” only if the Board affirmatively determines that the director does not have any direct or indirect material relationship with the Company that may impair, or appear to impair, the director’s ability to make independent judgments.
  2. Each committee of the Board shall have its own charter setting forth the purposes, goals and responsibilities of such committee, the manner in which such committee is to function and the qualifications required of its members. Each committee shall be required to perform an annual evaluation of its own performance.

Director Access to Officers and Employees

Members of the Board will have full and free access to officers and employees of the Company, provided that individual directors will use their judgment to ensure that any such contact with individual employees of the Company is made in a manner that is not disruptive to the business operations of the Company or otherwise and that the CEO of the Company is adequately apprised of the degree and subject of such contact. Officers and other employees of the Company may be invited by the Chairman of the Board to attend and/or make presentations at meetings of the Board from time to time to the extent and for the purposes deemed appropriate or desirable to further the Board’s understanding of the agenda topics to be addressed at any such meeting and other overall operations, condition and prospects of the Company.

Director Compensation

The form and amount of director compensation will be determined and reviewed from time to time by the Compensation Committee in accordance with its charter and applicable rules and guidelines. The Compensation Committee will consider that a directors’ independence will be jeopardized if compensation (including perquisites) is paid to such director beyond what is customary for similarly situated companies, or if the Company makes substantial charitable contributions to organizations with which the director is affiliated, or if the Company enters into consulting contracts with or otherwise provides any form of indirect compensation to such director or any organization with which such director is affiliated.

Director Orientation and Continuing Education

All new and continuing directors are encouraged to review the package of Board materials prepared by the Company consisting of recent changes in business, Committee charters, Charter and Bylaws, Code of Conduct and these Guidelines. New members of the Board are required to participate in the Company’s Director orientation program. This program is designed to provide new directors with the foundations for a more in-depth familiarity and understanding of the Company, its business, operations, industry and key personnel and may consist of management presentations and other materials and programs regarding, for example, the Company’s industry, markets, competitive position and strategies, significant financial, accounting and risk management issues, compliance programs and Code of Business Conduct and Ethics, principal officers and other key personnel and independent auditors and outside legal, financial and other advisors.

Evaluation of the CEO

The Compensation Committee will conduct an annual review of the CEO’s performance and compensation, as set forth in its charter, and will present its findings to the Board, which will consider the report of the Compensation Committee with a view toward ensuring that the CEO provides continuing leadership in a manner serving the best interests of the Company.

Annual Performance Evaluation

The Board will conduct an annual review and evaluation of its own performance to assure that the duties of each individual director and of the Board as a whole continue to be discharged in a manner consistent with this policy, the applicable rules and guidelines and the highest standards of ethical and efficient corporate governance and conduct. The Board will discuss this self-evaluation annually and evaluate areas in which its performance may be improved and the actions which may be taken over the coming year to facilitate such improvement.