Listed companies boards: SECP to ensure minority shareholders' representation

The Securities and Exchange Commission of Pakistan (SECP) is actively working on creation of a task force to have effective representation of the minority shareholders on the boards of listed companies. This was stated by Imtiaz Haider, Commissioner Securities Market Division (SMD), SECP on Wednesday during an awareness session on Revised Code of Corporate Governance held at the Islamabad Stock Exchange Limited (ISE) in collaboration with the SECP.
The session was held in collaboration with ISE and was attended by CEOs, CFOs, company secretaries and internal auditors of companies listed on the ISE. Imtiaz Haider said that SECP has been making its best efforts to bring the corporate sector at par with international level. The revised Code was meant to bring about necessary amendments in view of the recent developments in the corporate sector. Imtiaz Haider also highlighted the other initiatives of SECP taken for the development of the capital market of the country.
He said that the Commission is actively working on e-voting system for the general body meetings participation by shareholders. Moreover, the SECP has also encouraged IPOs through electronic system and very soon a comprehensive system with the collaboration of banks shall be in place. In order to have effective representation of the minority shareholders on the boards of listed companies and to protect their interest, the Commission is also working out the aspect of creation of a Task Force. In view of very thin participation of general public in the securities market, the Commission, Stock Exchanges and all other constituents have to cover up a long journey to increase the investors base.
Imtiaz Haider, Commissioner, Securities Market Division, SECP, highlighted the salient features of the revised code and the need for improving corporate governance standards to promote a vibrant capital market. He also touched on various initiatives to promote governance that the SECP has or is currently working on such as introducing the Code of Corporate Governance for SOEs, e-dividend, e-voting, AGMs through video conferencing, etc.
The code was launched and implemented as part of the listing regulations of the stock exchanges in April 2012. It was finalised after extensive stakeholder consultation both by the Pakistan Institute of Corporate Governance Task Force and by the SECP. However, this consultation and coverage was more at a policy level, since the implementation of the code the SECP has been receiving numerous queries-primarily of operational nature.
The revised code has made certain previously optional provisions mandatory and also introduced new concepts and requirements, it was felt that awareness sessions should be held at all three stock exchanges targeted towards CEOs, CFOs, company secretaries and internal auditors of the listed companies. Similar sessions were held at Karachi Stock Exchange and Lahore Stock Exchange last year both of which were also very well received.
The awareness session is a part of the SECP's efforts to raise corporate governance standards in Pakistan and to protect the interests of minority shareholders. Apart from creating awareness, these sessions would help listed companies to ensure compliance with the provisions which have become effective and at the same time prepare and take measures for timely implementation of the provisions, which will become effective at the time of next board election.
Earlier, the session opened with the brief remarks by Mian Ayaz Afzal, Managing Director, ISE, followed by a presentation by the SECP highlighting the revised code and a presentation by the ISE on compliance and enforcement of the code along with a question-answer session.
The awareness session was attended by Directors, CEOs, CFOs, company secretaries and internal auditors of companies located in KPK and Rawalpindi/Islamabad. The session was opened with the inaugural address by Mian Ayyaz Afzal, Managing Director ISE. The MD ISE appreciated the efforts of the SECP for introducing best practices in the corporate sector. He said that the ISE was focusing on ensuring compliance of the Code by the companies. He said that the Code was initially launched in 2002 as a part of the listing regulations of the stock exchanges. Later on, in 2012, it was reviewed and finalised after extensive stakeholders' consultation both by the Pakistan Institute of Corporate Governance Task Force and SECP. Akif Saeed, Executive Director, SECP highlighted the main amendments in the revised Code. Syed Mukhtar Hussain Jaffery, Chairman Demutualization Committee ISE apprised the participants about the philosophy of the Code of Corporate Governance and the implementation timelines and schedules of the revised Code.
After presentations an interactive question-answer sessions was held. Keeping in view the quires from the audiences belonging to various sections of capital market, it was felt that the code must be further improved without indulging into micro management of the companies and awareness sessions should be conducted at regular intervals.