Daily Times

Finance Minister Asad Umar on Monday said bad governance has been affecting the performance of institutions.

Addressing a ceremony in Islamabad, the finance minister said, “Corporate laws are being amended to improve the business environment in the country.”

“The fundamental operating procedures for the corporate sector will also be changed to achieve the desired goals and the government is also focusing to improve governance in public sector enterprises,” he added.

“The performance of institutions was affected owing to bad governance,” the finance minister further said. Umar further urged regulators, including the Securities and Exchange Commission of Pakistan and Pakistan Stock Exchange, to fully facilitate the corporate sector in order to enhance its productivity and contribution to the economy.

Drawing a comparison between private and government entities, the finance minister said the procedures for procurement are quite complex in the public sector. “We have now got the cabinet approval to change the multilateral procurement rules,” he said.

The Finance Minister has applauded the World Bank recognition of Pakistan enhanced implementation of corporate governance principles on the launch event of Pakistan Report on Observance of Standards and Codes (ROSC) on Corporate Governance.

The Report on the Observance of Standards and Codes (ROSC) is a prominent component of global efforts to strengthen the international financial architecture and aims at promoting greater financial stability, both domestically and internationally, through the development, dissemination, adoption, and implementation of international standards and codes.

The ROSC corporate governance initiative is administered by the World Bank that assesses the degree to which a country observes the G20/OECD Principles of Corporate Governance (OECD Principles)-the international reference point for good corporate governance; and develops a series of recommendations to reduce or close identified gaps.

Pakistan ROSC on Corporate Governance assesses Pakistan’s corporate governance policy framework. It highlights recent improvements in corporate governance regulation, makes policy recommendations, and provides investors with a benchmark against which to measure corporate governance in Pakistan.

The report focuses on the governance of large and listed companies, but includes a special section on the governance of public sector companies.

It highlights that corporate governance framework for listed companies has improved in recent years as the government has enhanced the legal and policy framework, and key institutions have grown in sophistication and maturity.

Much more can be done to address corporate governance in Public Sector Companies. ROSC assessed OECD 20 Principles fully implemented, 33 broadly implemented, 16 principles partially implemented, and three not applicable. A comparison with the 2005 Corporate Governance ROSC shows the level of improvement in the corporate governance framework; in 2005 out of a total of 32 applicable principles, only 4 were fully implemented, 17 were broadly implemented, 10 were partially implemented and 1 was reported as not implemented. The assessment has noted considerable improvement in compliance from 66% in 2005 to 77% in 2018 and has assessed Pakistan as “broadly implemented” against the OECD Principles of Corporate Governance.

Asad Omar said, “The outcomes of the assessment will contribute to the Government reform agenda to improve the investment climate, the attractiveness of the capital market, and public sector company (PSC) reforms.”

Published in Daily Times, March 12^th 2019.