‘Conduct of meetings of shareholders’ SECP seeks public consultation on body’s report

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) strongly proposed that the Conduct and Best Practice for Shareholder Meetings issued by the Securities Investors Association of Singapore (“SIAS”) may be adopted in Pakistan.

The SECP has constituted a Committee of experts for comprehensive review of the manner of conduct of shareholder meetings by listed companies and identify reforms.

The Committee has submitted its report to the Commission which contains recommendations to improve transparency and efficiency in the manner of conducting shareholder meetings, election of directors, proxies, voting process, monitoring mechanism, address issues being faced by minority shareholders and ensure effective participation and value addition by institutional investors.

All stakeholders particularly the listed companies are encouraged to share their insights on the Committee Report before March 30, 2024.

To strengthen the regulator’s commitment and to have a focussed approach towards ensuring higher standards of corporate governance, there is a need for setting up a corporate governance department at the SECP.

A dedicated Corporate Governance Department needs to be setup at SECP whose objective shall be to collaborate with different companies, PICG, shareholders, investors. This department would deal with all corporate governance matters, committee recommended.

Key shareholder concerns about general meetings are: i) receipt of meeting notices with delay; ii) information provided in notices is often inadequate for making informed decisions; iii) companies occasionally use ‘any other business’ on the meeting agenda to transact important business without prior disclosures; iv) distribution of gifts by companies at general meetings; v) low director attendance in general meetings; vi) companies choosing the mode of voting that suits the desired outcome; vii) postal ballots carry the risk of not being counted; viii) technical glitches impair the quality of hybrid meetings; and ix) changing the number of directors during the general meeting in which the election of directors is held. On the other hand, the major concerns expressed by issuers with respect to general meetings include: i) the twenty-one (21) day notice requirement for general meetings is too long especially when urgent/time-bound matters require quicker approvals; ii) rowdy shareholders often disturb the proceedings of meeting; and iii) there is an apparent inconsistency in the regulatory requirements for providing video link facility to shareholders, SECP report added.

Copyright Business Recorder, 2024