The Chairman Security Exchange Commission Aamir Khan on Thursday said that the SECP was passionate for implementing a comprehensive and robust code of corporate governance in the country.
The Chairman Aamir Khan in his keynote address at Management Association of Pakistan (MAP) Convention 2022 titled as ‘Leadership and Governance in Changing Times’ said, the SECP as the regulator of not just the corporate sector, but also the capital markets, NBFCs and insurance sector was equally focused on promoting effective management, improving transparency, and fostering healthy competition.
He informed that the SECP introduced first Code of Corporate Governance in 2002 and for the first time in Pakistan’s corporate history, brought to the forefront issues related to conflict of interest, concept of independent director, and duties & responsibilities of directors, said a press release issued here.
Over the next decade, Pakistan’s local markets also opened up to international investors and in 2012, the receptive attitude of the market players helped activate reforms in the Code. “This, ushered new provisions related to rights of minority shareholders, corporate social responsibility, and gender diversity to the Code,” he said.
In 2019, the code was amended one again, following the global shift from a “rule based” approach to a “comply or explain” method.
Here, the “one-size-fits all” approach was swapped in favour of a customized model, which allowed companies the liberty to explain the impediments in complying with non-mandatory clauses of the Code.
The chairman said that this was also in line with SECP’s objectives of promoting efficient corporate governance outcomes, by acknowledging the specific characteristics of companies in tailoring governance norms. “And in the process allowing freedom to their boards to set their own priorities within a structured parameter”.
SECP also made numerous governance related reforms within the organization aimed at improving transparency, and ensuring effectiveness and efficiency of decision making across various functions, by moving to a function-based structure instead of a sector-based model, informed SECP Chairman. —APP
