Published Date: Dec 4, 2012
CORPORATE GOVERNANCE: GOVERNMENT DECIDES TO INTRODUCE REVISED CODE IN PSES: SECP CHIEF
The government has decided to introduce revised Code of Corporate Governance in Public Sector Enterprises (PSEs) to tackle the governance issues leading to half a trillion losses, energy crisis and aggravating circular debt problem.
Addressing the Seminar organised by the Sustainable Development Policy Institute (SDPI) on “Plural Business Partnership for Peace; Perspective from Pakistan, Chairman Securities and Exchange Commission of Pakistan (SECP) Muhammad Ali stated that half a trillion losses in PSE’s, energy crisis and circular debt are due to governance problems. We have decided to revive code of corporate governance which would be implemented in public sector enterprises due to their impact on the economy. The Chairman SECP further stated that code of corporate governance would lead to improvement in culture of governance in public sector entities, corporate sector and would eventually be extended voluntarily to the family and individual businesses.
Muhammad Ali said that better governance in PSEs would minimise losses and improve performance which in turn would contribute to growth. He said that higher economic growth and per capita income are important and without these the problem of conflict resolution would remain a challenge. He said that development, parity in incomes, reduction in poverty and availability of financing could considerably reduce problem of conflicts in the country. The Chairman SECP said ground reality is that Pakistan is facing conflict due to social and economic disparities which could be minimised by promoting business and providing equitable opportunities to everyone.
Muhammad Ali said that the SECP has introduced a new and revised Code of Corporate Governance 2012 for listed companies. Through the new code we are looking to further improve and raise the standards of corporate governance by taking into account the dynamic nature of the constantly evolving corporate sector and financial markets. The original code was introduced in 2002 and over time, to keep the code dynamic and aligned with the international best practices, changes to it were required. This is a major step towards encouraging a culture of good governance practices in Pakistan. He said that the SECP has also drafted a similar code for all public sector enterprises to ensure that the drain of the national exchequer is minimised, which will also help address the recurrent theme of alleged corruption prevalent in the state-owned enterprises. Furthermore, the SECP is considering introducing a voluntary code for small and medium enterprises as well as private and family owned enterprises to promote a culture of responsibility, ethics and sound management.
Speaking to the seminar, Director for Strategic Planning and Evaluation Commonwealth, Nabeel Goheer said Secretary General Commonwealth on the request of the Prime Minister has decided to start a project in Pakistan for building a peaceful and democratic society. He said that the Commonwealth, a body of 54 member countries, working on two aspects; (i) conflict prevention and; (ii) conflict resolution. He said that the government of Pakistan is at highest level involved in the project, focusing that dialogue is the only way to move forward for a peaceful Pakistan while acknowledging different identities.