Ex-officio members: MoF asked to review nominations/appointments on PSEs’ boards

ISLAMABAD: The Federal Cabinet has directed the Ministry of Finance to review nominations/appointments of ex-officio members on public sector entities’ (PSEs’) boards, after Finance Minister Shaukat Tarin expressed his reservations on the practice of nominating bureaucrats and politicians on the boards of PSEs, well-informed sources in Finance Ministry told Business Recorder.

The decision was taken when a summary for appointment of one independent director and one ex-officio director of Board of Directors of National Bank of Pakistan (NBP) was tabled.

The Finance Division briefed the Cabinet that in terms of Section ll(l)(b) of Bank's (Nationalization) Act, 1974, National Bank of Pakistan’s (NBP’s) Board shall consist of not less than 5 and not more than 7 members (excluding Chairman and President NBP). In terms of Section ll(3)(a) of the Act, the Chairman, the President and other members of the Board of a Bank are appointed by the Federal Government in consultation with the State Bank of Pakistan (SBP) for a term of three years.

The present composition of the Board of Directors of NBP was as follows: (i) Zubyr Soomro - Chairman; (ii) Arif Usmani - President/CEO; (iii) Mohammad Sohail Rajput, the then AFS (IF/Inv), Finance Division - GoP Director; (iv) Asif Jooma - Director; (v) Tawfiq Asghar Hussain - Director; (vi) Sadaffe Abid - Director; (vii) Zafar Masud - Director (resigned); (viii) Imam Bakhsh Baloch – Director; and (ix) Farid Malik CFA - Private Director.

It was stated that one slot on NBP's Board was vacant due to resignation of Zafar Masud. Further, replacement of GoP Director was also required on the Board of NBP in place of Mohammad Sohail Rajput, Ex-AFS (IF), Finance Division.

The Cabinet Division, in a letter of October 13, 2020 had advised to consult the office of Prime Minister before proposing the private member for appointment as Director on the Board of Directors of NBP.

The Prime Minister had approved appointment of one Independent Director on the NBP's Board against the vacant slot for a term of three years from the following panel: (i) Ahsan Ali Chughtai; (ii) Muhammad Farhan Malik; and (iii) Khursheed Kotwal. The Prime Minister also approved nomination/appointment of Additional Finance Secretary (IF/Inv) of Finance Division as ex-officio member on NBP's Board, in place of Mohammad Sohail Rajput, former Additional Secretary.

During a discussion, the Minister for Finance & Revenue expressed his reservations on the practice of nominating bureaucrats and politicians on the boards of public sector entities. Some of the members highlighted the need for fair representation of provinces on these Boards. The Finance Minister stated that necessary reforms to ensure independence and professionalism of the Boards would be initiated.

After the discussion, the Cabinet approved the appointment of Ahsan Ali Chughtai as Independent Director on the NBP's Board for a term of three years, and Additional Secretary (IF/Inv) as ex-officio member. The Cabinet directed the Finance Division to reconsider the nomination/appointment of ex-officio members on various Boards in future.

Copyright Business Recorder, 2021