The Securities and Exchange Commission of Pakistan has issued notification for amendments to the Public Sector Companies (Corporate Governance) Rules, 2013, after approval by the federal government.
The rules have been revised in view of the implementation experience as well as the feedback received from the line ministries of public sector companies and other stakeholders. The amendments are aimed at facilitating compliance and ensuring conformance to good corporate governance principles in the public sector companies, which are significant economic players delivering critical services in important economic sectors.
The rules were issued in 2013 by the Commission with the approval of the federal government and contained provisions for improving the governance of PSCs through a range of measures aimed at enhancing the role of directors, facilitating the government to exercise its ownership function, strengthening the internal control mechanism etc.
The amended rules have introduced a criteria for sound and prudent management of public sector companies, rationalized the composition of board of directors by requiring a minimum of one-third independent directors, specified additional grounds for improving performance of directors, including the requirement for the government to enter into performance contracts with directors at the time of their appointment, revised the criteria for appointment of chairman and chief executive, optimized the fit and proper criteria for directors, etc.
The amendments would further improve standards of good corporate governance in public sector companies by facilitating them in improving their performance, ensuring sound and prudent management of such companies. They will enable the government to exercise its ownership function effectively, ensuring proper and effective use of public assets and resources, and maintaining a balance between public service delivery and profitability.