ISLAMABAD: The federal government would be required, at least once in every five years, to prepare and prescribe a state-owned enterprise ownership and management policy for giving effect to objectives that fiscal risks associated with SOEs are effectively managed.
The State-Owned Enterprises (Governance and Operations) Act, 2023, the SOEs ownership and management policy is prepared and notified with the approval of the federal government will be giving effect to the objectives of this Act namely that the shareholding responsibilities of the Federal Government with respect to its SOEs are clarified as well as federal government acts as an informed and active shareholder, and that fiscal risks associated with state-owned enterprises are effectively managed.
Moreover, this policy covers aspects of ownership and management of the SOEs in line with the requirements of the Act, which included;(a) the criteria and rationale for ownership, retention, and establishment of SOEs by the federal government; (b) the role of the federal government in the governance of SOEs; (c) the manner and procedure for exercising the rights of the federal government as a shareholder in SOEs, including, without limitation, matters enumerated subject to the principles laid down in the Act; (d) clarification of the respective roles and responsibilities of any Division of the federal government, under the Rules of Business, 1973, Boards, and other stakeholders involved in the implementation of this Policy.
The policy additionally also covers;(e) the role of and manner of operation of the Central Monitoring Unit (CMU); (f) the form and procedure for management and use of the electronic SOE database, including the right of access by the public; (g) guidelines for Board nominations committee while exercising its functions under the Act including with respect to diversity and adequacy of Board composition; (h)process for evaluating the performance of ex-officio and independent directors; (i) the cooling off period for the appointment of independent directors; (j) the manner of regulation of conflict of interest of directors, including procedures for identification and reporting of direct and indirect interests of directors and resolving any conflict of interest thereon; (k) a framework for ensuring competitive neutrality of the State with respect to state-owned enterprises; (l) a public sector obligation management framework; (m) process of monitoring and managing contingent liabilities of SOEs; (n) the criteria for excluding a SOE from the ambit of clause (c) of sub-section (1) of section 3 of the Act; and;(o) any other matter required to give effect to the provisions and objectives of the Act.
Copyright Business Recorder, 2023