Performance contracts: Power Division reconstitutes BoDs of six Discos

ISLAMABAD: The Power Division has reconstituted Board of Directors (BoDs) of six power Distribution Companies (Discos), to oversee their affairs in the light of performance contracts signed by the ministry with the Prime Minister.

The Discos whose Boards are reconstituted are as follows; (i) Pesco; (ii) Iesco; (iii) Lesco; (iv) Qesco; (v) Fesco and; (vi) Hesco.

Each Disco will have 12-member Board, dominated by bureaucrats' and technocrats. One lucky Independent Director, Husnain Haider has been included in the Boards of three Discos, ie, Lesco, Iesco and Fesco where he is appointed Chairman of the Board. Ali Zain Banatwala has been included in the Boards of Pesco and Fesco. The Power Division informed the Cabinet that there are ten Discos under the administrative control of Ministry of Energy (Power Division). These Discos are public sector companies (PSC) as defined under Section 2 (1) (54) of the Companies Act, 2017 and Rule 2 (1) (g) of the Public Sector Companies (Corporate Governance) Rules, 2013 (CGR). The matters of constitution of their BoDs are governed under the said Act and CGR.

Since the Federal Government owns these Discos, it has the power to nominate all directors on their BoDs (Section 165 of the Act).

In terms of rule 3 (1) of the CGR, Directors of a PSC have to possess requisite range of skills, competence, knowledge and experience so that BoD as a group includes core competencies and diversity considered relevant in the context of the functions of the PSC Rule 3 (2) of the CGR lays down that the Board shall have at least 1/3 of its total members as Independent Directors. Section 166 of the Act provides that independent directors shall be selected from a data bank containing names etc. of the persons who are qualified and willing to act as independent directors, maintained by an institution as may be notified by the Securities and Exchange Commission of Pakistan. Pakistan Institute of Corporate Governance is such an institution and maintains a data bank of independent directors on its website.

While proposing the nominations of independent members on the Boards of the subject Discos, Power Division under the guidance of Special Assistant to the Prime Minister on Power, has relied on their enlistment with the Pakistan Institute of Corporate Governance (PICG), their CVs and an affidavit from each proposed nominee that they fulfill the Fit and Proper Criteria as required under the above referred law and rules.

During discussion, the members of the Cabinet observed that the Boards comprised mainly of bureaucrats and technocrats; addition of the representatives of consumers and civil society would add value to the composition of the Boards by getting firsthand information about the consumer feedback and the realities on ground.

The Power Division stated that two consumers' representatives from civil society to be notified in due course of time.

Copyright Business Recorder, 2020