KARACHI – The Securities and Exchange Commission of Pakistan (SECP) is holding talks with stakeholders as the apex regulator intends to amend the Code of Corporate Governance 2002.
Some of the proposed amendments in the code touch upon the representation of independent and executive directors, the role of chairmen and chief executives, the number of total directorships in listed companies held by an individual, self-evaluation of the boards, the directors’ education, training, remuneration and additional committees of the board.
In this regard, the SECP on Wednesday briefed the Senate Standing Committee on Finance on proposed amendments.
SECP Chairman Muhammad Ali gave a detailed presentation to the committee chaired by Senator Ahmed Ali. According to SECP chief, the regulator had launched a consultation process among all the stakeholders to reform the code and had received substantive feedback from the latter.
He stated the commission would undertake another round of consultations with major stakeholders on the final revised code and would again be briefing the Senate committee on the final revised code before its implementation.
“Corporate governance is imperative to ensure transparency and accountability in the corporate sector and safeguarding the interest of all stakeholders,” Ali said, adding that “good corporate governance practices serve as incentives for attracting foreign investment and enhancing commercial access to capital.” Ali stated that the corporate governance code was the first ever institutional effort to prescribe enhanced disclosure and corporate governance standards. “The code, applicable to all listed companies, is a compilation of best international practices, tailored to local conditions and provides a framework for efficient control and management of listed companies,” he explained.
He told the committee that the SECP, being the apex regulator of the capital markets, was overseeing enforcement and implementation of the code while the stock exchanges were primarily responsible for enforcement of the regulations.
The SECP is empowered to approve any amendments to the code and to allow any relaxation from the provisions of the code subject to fulfillment of necessary conditions, the senate body was told. The regulator initiated review of the code taking into account the lessons learned from practical issues and considerations relevant to listed companies.
It released the revised draft of the code for public consultation in October 2010, proposing amendments to evolve the governance requirements according to changing business concerns and practices and to develop international corporate governance standards.
