CRITERIA & ASSESSMENT PROCESS

BY
MUHAMMAD ANEES
Secretary
Management Association of Pakistan

PREAMBLE

The Corporate Excellence Award was instituted by MAP in 1982 with the sole aim to recognizing and honoring companies showing outstanding performance and demonstrating progressive and enlightened management practices.

For assessment purpose the listed companies have been divided into two categories – viz- ­

• Business & Industrial Category
• Financial Category

The Business and industrial category companies have been further sub- divided into nine sectors, namely:

• Textile and Allied Sector

(Cotton, Synthetic Rayon, Jute, Textiles spinning, Weaving & composite & Woollen Textiles)

• Chemicals and Allied Sector (Chemicals, Pharmaceuticals, Fertilizers etc.)
• Fuel and Energy Sector (Refinery, Power Generation, Oil & Gas Exploration & Marketing)
• Food and Allied Sector

(Food, Sugar, Tea & Tobacco, Vanaspati, Personal Care Product)

• Engineering and Allied Sector (Engineering, Cables & Electrical Goods etc.)
• Automobiles and Allied Sector

(Automobile Assemblers, Auto parts & Accessories, Transport)

• Miscellaneous Sector

(Glass & Ceramics, Leather Goods &Tanneries, Garments, Construction, Paper & Board, etc)

• Non - Listed Companies Sector (All the unlisted companies whose published Accounts are available)
• Non - Profit Social Services Sector  (All the non-profit companies whore accounts are available)

Similarly, in the Financial Category all the companies have been sub-divided into the following four sectors.

• Commercial Banks Sectors (includes all listed Commercial Banks)
• Insurance Sector (includes all Insurance companies)
• Modaraba & Leasing Companies
• Mutual Funds & Investment Banks/ Companies & Securities

PHASE I

Short-Listing On Dividend Payment

This is the primary qualifying criteria for short-listing companies for the second phase consisting of detailed financial evaluation and envisages:

1. Payment of at least 10% dividend (Cash and / or Bonus Shares) each year during the last three consecutive years.)

2. Payment of at least aggregate of 30% dividend (Cash and / or Bonus Shares) over the last three years.

PHASE 2

Detailed Financial Evaluation

The financial performance assessment of the companies is done on the basis of published accounts of the companies of the most recent three consecutive years. The following parameters are used for financial evaluation:
  
Business & Industrial Category

Financial Category

The Financial Category companies have been divided into four sectors in view of their different natures of business. Consequently their ratios differ for financial assessment. These ratios have been established with the assistance of Pakistan Credit Rating Agency (PACRA) and Pakistan Insurance Corporation. These ratios and the points allotted for them are as follows:

Non-Banking Financial institutions (NBFI's)

C.   Modaraba & Leasing Companies

D.   Mutual Funds Securities and Investment Banks

(Includes Investment Banks, Leasing Companies, Securities Companies, Modaraba, Mutual" Funds) ­

TIME WEIGHTAGE OF RATIOS

The following weightage has been assigned for the purpose of deriving the above financial parameters:

Year
       N                           4
Year
       N – 1                     2
Year
       N – 2                     1

Under this mechanism the companies acquire points against each parameter according to their relative positions amongst the qualifying companies. Total points in each year are multiplied by these weights and added to arrive at their total points out of maximum 50 points allocated for financial performance.

Phase 3

Management Appraisal
The next step in the assessment process is appraisal of management practices of companies qualifying the financial assessment. The review of management practices is conducted with the help of a structured questionnaire which is aimed at establishing the quality of management practices in the areas of corporate governance, strategic planning, Leadership marketing, social responsibility, operation management, human resource management and information technology.

Points reserved in each of the above areas in the management appraisal questionnaire are as follows:

Top five companies in each of the above described sectors are selected and addressed to complete the management appraisal questionnaire.

PHASE 4

Top Management Meetings

Clarifications and confirmation to questionnaire responses are obtained by site visit and detailed meetings with top management of each company. During these meetings the MAP teams not only discuss their management practices but also inspect the evidence of claims made in the questionnaires as well as policy documents.
    
PHASE 5

Final Tabulation Of Results

When the final assessments of management practices on the basis of 1000 marks are received at the MAP Secretariat, the assessment process concludes. The next and final step is tabulation of the results on the basis of 250 points, 50 for financial evaluation and 200 for management appraisal, thus, maintaining the 20:80 weight-age for each aspect. The final tabulation is presented to the MAP Executive Committee by the Corporate Excellence Awards Sub-Committee for approval and announcement.

AWARDS

Previously, there were two Excellence Awards, one each for the overall winner in the business­ industrial and financial companies’ categories, together with seven Certificates of Excellence.
Under the revised Awards process, there is one Circulatory Trophy for the overall winner in each category i.e. Business-Industrial Category and Financial Category. In addition, there are smaller trophies for the top companies in the nine sectors of both the above categories. Moreovers with take away trophies certificates of excellence are awarded to the runners up of each sector. The number of awards and certificates under new scheme are as follows:

Two large Circulatory Trophies for over all winners  
Eleven small take away Trophies for sectorial Winners
Thirteen Corporate Excellence Certificates for runners up in each sector.

CONCLUSION

The new Award process has been developed with the sole aim to provide the companies with greater opportunities to win the MAP awards and certificates. This system is expected to encourage companies to increasingly participate in the awards contest and adopt international best management practices that are the basis of the MAP Corporate Excellence Award.

RECIPIENTS OF CORPORATE EXCELLENCE AWARDS 1982 - 2006
Business and Industrial Category

CORPORATE EXCELLENCE CERTIFICATES 1982 - 2006