 Good to see all of you again. We are back with corporate governance and in our previous sessions we basically were talking about the globalized contextualization of corporate governance, its different contextualization from a national context also and the different schools of thought which basically exist around the historical aspect of corporate governance. Today, ladies and gentlemen, we are going to talk about the theories of corporate governance. Now, when we talk about the theories of corporate governance then naturally we are opening up a Pandora's box. In the coming sessions, we'll be looking at the different theories and we'll be understanding how they are similar and how they tend to differ from each other. When we are talking about the different theories then, ladies and gentlemen, we talk about the various variables and the various disciplines which merge together to create that framework of corporate governance. Now, when the subject of corporate governance is based on a strong theoretical foundation then it is derived from several disciplines such as finance, such as economics, such as accounting, such as management, such as law and organizational behavior. This multi-dimensional governance system prevails in different countries. When we see this different multi-disciplinary approach towards corporate governance, it basically is an all-encompassing subject and it has this overlap between these different subjects that we are talking about and disciplines that we are talking about and therefore it makes corporate governance even more interesting. So, sometimes the connotation or the interpretation that maybe corporate governance is confined primarily to finance or corporate governance is confined to law is wrong. Actually, it is an amalgamation of different disciplines and different theories which tend to overlap with each other to create a corporate governance framework which then is stipulated by law and is practiced throughout different organizations. Now, when we are talking about the practice of law, of rules, of regulations in different organizations then definitely the context of social behavior also becomes very important. And when we are talking about organizational behavior then we are looking at why is it that in certain countries or in certain environments the framework can be practiced in a better way while in others that framework faces a lot of problems and also there is an issue of implementation. So, we are going to be looking at these different theories. We are going to see how these different disciplines are interrelated with each other to develop different frameworks which are practiced from different dimensions in different countries. So, that is what we are going to be looking at ladies and gentlemen. But even before that we are going to be looking and following aspects play a significant role with regards to the types of corporate governance. The legal system of the country. Now, this is extremely important. The corporate structure, the shareholding pattern and the cultural and value system, the economic system, political system and governance, path dependency, resource dependency and institutional environment also play a dominant role in corporate governance. So, again ladies and gentlemen, boys and girls, what we are seeing is that when we are talking about corporate governance there are so many perspectives, so many aspects, so many building blocks and these are some of the very important ones. For example, when we talk about Pakistan and because Pakistan is the Islamic Republic of Pakistan, therefore we have a dual legal system. We have the common legal system or the common law system and we have the Islamic law system. And it is absolutely independent of each other. The common law system has its own judicial structure, has its own laws which tend to emanate from the common wealth legal system, from the common law system while when we are talking about the Islamic law system, then that basically emerges from the Quran, the Sunnah and the Hadith and again that is something which is universal. So, both interpretations and both laws are independent of each other, have their own judicial framework and setup and again have their own set of judges and sometimes they can be in contradiction of each other and that is where many problems do arise. But again that depends upon the texture, the fabric of the nation. We also look at the different corporate shareholding. Like in a country like Pakistan, the minority shareholder is not given his or her due place within the corporate system even though it is there in law but by practice the minority shareholder is not properly represented. We also look at the cultural and value systems. That is again very important and because we have a rigid hierarchical system within our families, therefore even in the corporate sector, we have a comparatively rigid structure which exists in the corporate governance mechanism of Pakistan. So, all of these things become extremely important with the resource dependency and the path dependency and again the different political issues which tend to sometimes become very unpredictable. So, within this unpredictability, we see that the corporate governance framework and the corporate governance structure gives more stability and more predictability. Now, when we are talking about theories, then that is also very important to understand that theories are different from rules and regulations. Theory is a supposition or a system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained. So, again, it is not something, theory is not a definition. Theory is not something which is absolutely specific but a theory is a generalized approach of understanding a particular phenomena or particular concept, a particular word or a particular environment or a particular law. So, again, when we are looking at theories, they are not straight-jacketed, they are not permanent, they are not something which are absolute but they have more flexibility and are based upon the different dispositions which have been taking place within a specific set of variables. So, again, in other words, a theory is a set of principles on which the practice of an activity is based or it can be defined as a set of assumptions, propositions or accepted facts that attempts to provide a plausible or rational explanation of cause and effect, the causal relationships among a group of observed phenomena. So, again, dwelling upon the theory in more depth, then these are the different variables and these are the different contexts on which a particular theory is based. And ladies and gentlemen, theories in corporate governance are defined based upon the cause and effect of variables, such as the configuration of the board of directors. That is very important. It would vary from country to country. And therefore, based upon that configuration, we would be able to adjudge or we will be able to determine the level of implementation of corporate governance within a particular organization. And then we can collectively also ascertain the state of corporate governance in a particular country based upon an extensive survey of studying the board of governors, its composition, its texture, its implications and its working also. So, that is a very, very important variable. We talk about the audit committee, which is the strongest committee within the corporate governance framework, the role of top management and the social relations beyond the legal regulatory framework. So, that also tends to determine the fabric or the implementation and the transparency of a particular corporate governance framework in a organization. Effective corporate governance requires applying a combination of existing corporate governance theory. So, again, it is not an isolation. It is overlapped. And what we see is that in real life, it is never one, but a combination of different theories, which tend to enable organizations to become more corporately sociable and also corporately responsible, which enables them to safeguard the interests and the rights of different stakeholders and shareholders and create a balance or develop an equilibrium between the different aspects of corporate governance. And that is very important. So, what we are going to look at are the different theories of corporate governance. And we are going to go in detail in our coming session. So, there is a sociological theory. There is a stewardship theory. There is a transaction cost theory. There is a resource dependency theory. There is an agency theory. And there is a stakeholder theory. So, we have these different theories which exist within the corporate governance framework. And in our coming sessions, we are going to be looking at each one of these and see what their implications are and how they tend to interrelate with each other to create a corporate governance framework. So, thank you again, ladies and gentlemen, and see you in the next session. Good office.