Reforming SOEs in Pakistan
Dr Omer Javed
The state-owned enterprises (SOEs) are defined in Pakistan under the (Corporate Governance) Public Sectors Companies’ Rules (PSC Rules, 2013) as those companies where government exercises either direct or indirect beneficiary control or ownership, whereby the government or any agency holds 50% of voting shares or otherwise has ‘the power to elect, nominate or appoint a majority of its directors’. Moreover, some of the SOEs were brought under further directions – pertaining to disclosure and reporting, but not risk management – through the Pakistan Companies Act (2017).
Here, SOEs are required to comply with PSE Rules, including those pertaining to risk management, and in the language of the Rules, the SOE boards of directors are required to ‘formulate significant policies of the Public Sector Company, which may include the identification and monitoring of the principal risks and opportunities […] and ensuring that appropriate systems are in place to manage these risks and opportunities, including safeguarding the public reputation of the Public Sector Company’.
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