Finance Division moves to tighten oversight of SOEs

ISLAMABAD: The Finance Division has decided to tighten oversight of State-Owned Enterprises (SOEs) by introducing a comprehensive new framework for the preparation of business plans and Statements of Corporate Intents (SCIs) for the SOEs.

The move signals a tougher push for accountability, performance monitoring, and financial discipline across the public sector entities.

The framework is aimed at improving accountability, performance monitoring, and financial discipline in the public sector. Under the new guidelines, SOEs will be required to prepare detailed Business Plans and SCI to ensure better governance and transparency.

The move is part of the government’s broader effort to improve the performance and financial management of public sector entities.

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In a formal notification issued by the Central Monitoring Unit (CMU), all federal ministries, divisions, and SOEs have been directed to comply with the requirements of the State-Owned Enterprises (Governance and Operations) Act, 2023, and the SOE Ownership and Management Policy, 2023, while preparing future corporate strategies and financial plans.

The guidance framework introduces a standardized mechanism for drafting, consulting on, approving, and monitoring SOE business plans, complete with templates, timelines, reporting formats, governance benchmarks, risk management parameters, and performance indicators.

The move comes amid growing pressure on the government to reform loss-making SOEs that continue to weigh heavily on Pakistan’s fiscal position.

Under the framework, SOEs will now be required to prepare rolling three-year business plans before the start of every financial year, detailing strategic direction, operational priorities, financial forecasts, and measurable performance targets. Boards will also be obligated to issue Statements of Corporate Intent outlining corporate objectives and commitments.

The Finance Division has emphasized that the business plan is not merely a procedural requirement but the “primary strategic and accountability document” of an SOE.

The framework seeks to shift SOEs away from ad hoc management toward structured, measurable, and commercially oriented governance practices.

A key feature of the reforms is the strengthening of SOE boards. The framework makes it clear that boards — not ministries — hold the ultimate authority to approve business plans and SCIs.

While consultation with line ministries remains mandatory, the notification explicitly states that ministries and the CMU have only an advisory role and cannot override board autonomy guaranteed under the SOE Act. “The authority to approve the Business Plan rests solely with the Board,” the framework states, reinforcing a corporate governance model aimed at insulating commercial entities from bureaucratic interference. The document also establishes strict timelines for preparation and review.

Copyright Business Recorder, 2026