(CG) is a subject of enormous practical importance to both developed and developing countries because it can play a pivotal role in promoting their economic development. Developed corporate governance mechanisms provide legal protection to investors and check concentration of ownership through large share holdings, bank finance and takeovers. today's globalized world, the corporations, whether owned by the private sector or the state, increasingly need to tap domestic and international capital markets for investment. But, underdeveloped corporate governance mechanisms are known to substantially impede the flow of funds to the corporations.

Particularly in less developed countries CG mechanisms, which rest on the economic and legal institutions in a country, are either very weak or nonexistent. Attempts to understand CG problems in these countries can go a long way in bringing about institutional change in these countries. Due to weak CG mechanism, corporations in countries like Pakistan find it difficult to raise debt and equity. Concerns over investors' rights, opaque corporate disclosure, due diligence practices and contract enforcement have contributed to a reduction in equity investments in Pakistan. Banks are also reluctant to take the additional risk associated with imprudent investment behavior, and as a result, a number of corporations are experiencing liquidity problems.

Following the market's current interest in corporate governance, LUMS has steadily become involved in building a knowledge base in this area. LUMS is well positioned to play a pivotal role in furthering research on corporate governance and raising public debate to a national level. The multi-disciplinary faculties in the areas of economics, public policy, finance and accounting, and law give LUMS a strong base for bringing together the interesting themes in corporate governance.

Knowledge-creation: Unlike many other countries, no rigorous research has yet been conducted on developing and improving CG quality in Pakistan. The proposed program will aim to analyze key features of Pakistan's CG landscape, highlight strengths/weaknesses and pioneer empirical research via case studies. Research will be presented through a series of publications, which will publicize Pakistan's efforts with the hope of attracting foreign investors, and aiding other developing economies in initiating their CG processes.

Information dissemination: Executed through stakeholder workshops, executive development programs, lecture series and on-site consultations, stakeholders will be educated about the "bottom line" benefits of corporate governance and best practices.

Capacity building: Through the development of a core group of LUMS academics dedicated to CG activities, research derived from this program will be integrated into mainstream curricula in the areas of management, economics and law, thereby embedding the value of corporate governance in students - the country's emerging leadership.