KARACHI, Oct 30: All the 700 companies listed on the Karachi Stock Exchange have been made eligible to contest for the Corporate Excellence Award following changes made in criteria and assessment process by the Management Association of Pakistan.

Instituted in 1982 and designed to demonstrate and encourage enlightened management practices, the MAP awards have so far been restricted to short-listed companies for financial evaluation. Only 90-100 companies could qualify the primary criteria for financial assessment. The award winners came from about 35 listed companies.

Both the local and multinational firms have been competing for these annual top management awards.

Now, the MAP managerial appraisal committee has sent out a 100-point questionnaire through e-mail to all the listed companies. Only firms qualifying the new primary criteria are eligible for contesting the award. The respondents are required to reply to the queries by the end of the next month.

Under the new criteria, the emphasis has shifted from dividend payment to best international management practices.

The primary criteria for short-listing of firms had kept a large number of companies away from the contest as they paid fewer dividends, though they pursued good management policies. The new system has reduced the primary dividend payment criteria to 10 per cent from 20 per cent each year or 30 per cent aggregate dividend payments for the last three years.

In a changing economic scenario, it may not be so realistic to judge a company primarily on short-term outcomes like dividend payments. Over time, the management of firms have improved, more so, by the recent corporate governance reforms. Retained earnings can be ploughed into new investment.

MAP President Javed Iqbal says the Karachi Stock Exchange gives awards on the basis of dividend payments. The objective of the MAP is to encourage companies to adopt best management practices.

Divided into eight sections, the 100-point questionnaire gives different weightage to various management facets. These include questions intended to make companies conscious of their role in society. They need to be reminded that it is the society that provides them opportunity to do business and they have some social obligations to fulfil. Against a total of 1,000, the number of marks for various sections is as follows: human resource focus 250, strategic planning 220, corporate governance 160, social responsibility 70, leadership 60, customer and market focus 90, operation management 80, and information management 70.

The highest number of marks (250) has been earmarked for human resources against the lowest weightage for leadership (60).

It indicates a great transformation in the corporate management practices. The best company performance comes from empowered employees, acting as entrepreneurs and providing inputs to strategic planning which carries the second highest marks in MAP award (220). It is this trend which has brought about the collapse of owner-management in Pakistan and elsewhere and is likely to raise questions in future on the over-stated role of top professional hierarchy.

The new criteria and assessment process was announced here last week by a panel that included Corporate Excellence Award sub-committee Chairman Syed Mumtaz Saeed, Iftikhar H. Shirazi and Asif Qadir.

Mumtaz Saeed said the MAP awards had been updated in line with the international awards practice.

Departing from the earlier practice of two categories, all the economic sectors have been regrouped into following large sectors: textile and allied sector, chemicals and allied sector, food and allied sector, miscellaneous sector. The financial sector has been regrouped into insurance and miscellaneous sector.