Appointments of CEO, CFO, CIA and CS: MoF conveys to line ministries and SOEs the guidelines

ISLAMABAD: The Finance Ministry has conveyed to all line ministries and federal state-owned enterprises guidelines regarding appointments of CEO, CFO, CIA and CS to enhance governance, transparency, and operational efficiency of state-owned enterprises (SOEs).

The Central Monitoring Unit (CMU) of the Finance Division on Thursday issued (C Level appointments) Guidelines 2024 in pursuance of SOEs (Governance and Operations) Act, 2023, and in alignment with the SOEs (Ownership and Management) Policy, 2023 for immediate implementation and conveyed the line ministries and federal SOEs that adherence to these guidelines is crucial for achieving the strategic objectives set forth under the act and the policy.

The guidelines, being applied to the appointments of chief executive officer (CEO), chief financial officer (CFO), chief internal auditor (CIA), and company secretary (CS), are designed to enhance the governance, transparency, and operational efficiency of SOEs. These will be applied to all the public sector companies as defined in the Act as well as on the statutory SOEs. However, if required, the Boards of statutory SOEs may make necessary adjustments in accordance with their statutory requirements.

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All SOEs shall concurrently comply with the applicable laws, rules and regulations as per sectoral regulatory requirements, particularly related to the fitness and propriety, provided those laws and regulations are not inconsistent with the Act. These guidelines shall come into force immediately and shall apply on any appointments made after this date.

As per guidelines, the appointment process should be initiated well in advance, preferably three months before the term of the incumbent is due to expire and the board has to develop a Job description for each positions in the light of the job requirements as laid down criteria in the specific section of the SOEs act.

The appointment process for all the position, except the chief internal officer, will be supervised by the human resource committee of the board, or a special committee constituted for the purpose by the board while the committee shall keep in view, the fit and proper criteria given in schedule the SOE Act, 2023 during the evaluation of the candidates.

Subsequently, the committee shall recommend a minimum of three candidates to the Board for appointment to any C-Level position in the case of a public sector company while in case of statutory SOE, the committee shall submit its recommendations to the Board for its decision to appoint or to make further recommendation to the competent authority, as the case may be, under the relevant statute.

Based on the interview and evaluation, the candidates shall be recommended to the board in order of preference and in case the board does not concur to the appointment of any of the proposed candidates, it shall inform the committee of the reasons for non-concurrence and refer the matter back to the committee with directions to identify additional/alternate candidates.

Copyright Business Recorder, 2024