As per an issued statement, the Securities and Exchange Commission of Pakistan (SECP) has amended the Public Sector Companies (Corporate Governance) Rules, 2013, in accordance with the approval of the federal government.
A notification in this regard has been issued and 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 statement said that the amendments are made in order to facilitate compliance and ensuring conformance to good corporate governance principles in the public sector companies, which are involved in the deliverance of critical services in important economic sectors.
The rules, approved by the federal government were issued in 2013 by the commission 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 establish a criteria for sound and prudent management of public sector companies, rationalize 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 criteria for appointment of chairman and chief executive, as well as optimization of fit and proper criteria for directors, etc.
The amendments are also expected to 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.
