The Securities and Exchange Commission of Pakistan and the International Finance Corporation (IFC), the private sector arm of the World Bank Group, have signed a memorandum of understanding in Islamabad to promote and support corporate governance reforms in Pakistan.
Tariq Hassan, chairman of the Securities and Exchange Commission of Pakistan, says: “This is the first project to tackle corporate governance reforms on a comprehensive basis in our country. The project sets out to strengthen current practices of financial institutions and corporations. It will also advise the public sector on how to improve upon the legal and regulatory framework for corporate governance and will build institutional capacity for developing corporate governance curricula and training.”
He adds that the project would help the Pakistan Institute of Corporate Governance become a leading provider of knowledge and awareness related to corporate governance practices in the country.
“What makes this joint initiative so unique,” adds Michael Essex, IFC’s acting director for the Middle East and North Africa, “is that it will attempt to turn a short-term technical assistance project into a sustainable structure that can provide quality corporate governance services. It will do so by working both with and through the recently established Pakistan Institute of Corporate Governance.”
The initiative announced today, the Pakistan Corporate Governance Project, is fully funded by IFC and proposes to support the Pakistan Institute of Corporate Governance in five key areas:
- Setting up training and certificate programmes on corporate governance for company directors, managers, and secretaries;
- Building capacity for research and development to conduct surveys, issue publications, and produce best practice manuals;
- Developing and providing consulting and advisory services on corporate governance to Pakistan’s banks and corporations;
- Raising awareness of corporate governance practices via conferences, seminars, and roundtables;
- Providing policy advice to the government on legal and regulatory reforms relating to corporate governance.
“This joint initiative is a business project, with clearly defined goals, objectives, and activities that are to be laid out in a detailed business plan,” says Jesper Kjaer, general manager of IFC’s Private Enterprise Partnership for the Middle East and North Africa (PEP-MENA). “All future services are to be based on internationally recognised best practices, yet tailored to Pakistan’s emerging market environment, focusing on key corporate governance issues that are relevant to family-owned structures. These include building professional boards, implementing internal control systems, facilitating succession planning, and ensuring information disclosure for minority, outside shareholders.”
PEP-MENA is IFC’s technical assistance facility that supports private sector development in the Middle East and North Africa. PEP-MENA focuses on improving the business enabling and regulatory environment in the region; strengthening the financial sector; promoting the growth of small and medium enterprises and their support services, such as business organisations and consulting firms; helping restructure and privatise state-owned enterprises; and developing viable private sector and public-private partnership projects, especially in infrastructure.
The Securities and Exchange Commission of Pakistan is the apex regulator of the corporate sector, capital market, and nonbank financial sector in Pakistan. The commission introduced the Code of Corporate Governance in Pakistan through the listing regulations of the stock exchanges and has been actively involved in promoting awareness and implementation of good corporate governance.
It played a lead role in establishing a dedicated institute on corporate governance, the Pakistan Institute of Corporate Governance, as a public-private partnership that provides an enabling environment for effective implementation of the Code of Corporate Governance.
The Pakistan Institute of Corporate Governance is a not-for-profit company set up under Section 42 of the Companies Ordinance, 1984. It aims to undertake activities that help achieve good corporate governance in Pakistan and to create an enabling environment for effective implementation of the Code of Corporate Governance. The institute’s initial sponsors comprise a balanced representation of all major stakeholders from the country’s public and private sectors. The founding members have subscribed to the institute’s memorandum of association.