SECP introduces to regulations to combat corruption

SECP introduces to regulations to combat corruption

Sunday, March 25, 2012: SECP (Securities and Exchange Commission of Pakistan) has introduced new regulations under the “Public Sector Companies Regulations 2012”. This step will bring about balance in the system and will also help
in combating corruption.

Previously, the Chief Executive Officers (CEO’s) were appointed by the prime minister but now under the new regulations revealed by SECP, the CEO will be selected by a board within the company.

The selected board will also have directors, most of whom will be from independent sources. The independent directors will have a fixed tenure of three years. As per SECP officials, having directors for a fixed term will help in
transparency.

Waseem Ahmad, Joint Registrar of SECP, said in an interview “The regulations have been framed in light of the Companies Ordinance 1984 and according to this ordinance the powers of appointing CEOs rest with the company board.”

However, Waseem held that these draft regulations are not into practice as yet and there are certain anomalies which need to be addressed first. SECP will also consult with its stakeholders before enforcing the regulations claimed
Waseem.

As per the new rules, chairman will head the board and will formulate the policy while the chief executive officer will be responsible for implementation of these policies. The major responsibility of the chairman will be to keep
the board aligned with the objectives and all matters relating to governance will be placed on the agenda of the board meeting. The chief executive will be responsible for the management of the company under the supervision of the board.

The regulations say that the chairman will be elected from among independent directors and then the board will appoint chief executive of the corporation as per provisions of the companies ordinance. Moreover, any person that does
not meet the ‘fit and proper’ criteria cannot be appointed the CEO. Personals who convicted by courts and do not enjoy moral and professional integrity are forbidden from appointment as the CEO’s.

Short URL: https://www.newspakistan.pk/?p=17139

Posted by Wajahat Javed on Mar 25 2012. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry