Appointment of CEO of public sector company: PD advised to seek Establishment Division’s comments

ISLAMABAD: The Establishment Division (ED) has advised the Power Division to seek its comments on a summary regarding appointment of a chief executive officer (CEO) of Public Sector Company (PSC) prior to submission of the case before the federal Cabinet.

Power Division had sought comments from the Establishment Division on appointment of the heads of Public Sector Companies falling under its administrative jurisdiction.

According to the Establishment Division, the case has been examined. It is agreed that selection process of a CEO of a Public Sector Company (PSC) is governed under Companies Act, 2017 and rules/guidelines made thereunder.

However, regarding consultation with Establishment Division for appointment of a CEO of a Public Sector Company, following may be taken into consideration: (i) a Public Sector Company is directly or indirectly controlled by the federal government, as defined in Section 2 (54) of Companies Act, 2017; (ii) for the appointment of a CEO of Public Sector Company, approval of the Cabinet is required, in terms of Rule 5 (2) of PSCs (Corporate Governance) Rules, 2013; (iii) Rules of Business, 1973 have been framed to run the affairs of the federal government; (iv) in terms of Rule 11 (c) of ROB, 1973, consultation with Establishment Division is required for “Appointment to a post in BS-20 and above and equivalent whether by initial appointment or promotion or transfer; (v) in this rule, no specification with respect to a civil post has been made, meaning thereby, the same applies for civil and non-civil post in BS-20 and above and equivalent; (vi) the mandate in Rule 11 (c) of ROB, 1973 has been entrusted to the Establishment Division being the human resource organ of federal government, its purpose to assist the federal government in decision making and to ensure that the selection process has been undertaken in a transparent manner and prescribed procedure; and (vii) therefore, every matter which requires approval or consideration of the federal government, the Rules of Business, 1973 shall be applicable and be followed in letter and spirit.

The Establishment Division maintains that consultation with Establishment Division is required before the matter of appointment of a CEO of Public Sector Company is placed before the Cabinet for approval.

The Establishment Division has also advised Power Division to approach Cabinet Division as the custodian of Rules of Business, 1973 for interpretation of Rule 11 (c) of ROB, 1973.

Copyright Business Recorder, 2022