It seems the Public Sector Corporate Governance rules rolled out in March last year is one of the governments unwanted children. Not only have the public sector entities failed to correct the historical wrongs and bring themselves in line with those roles, recent board appointments in Lahore Electric Supply Company (Lesco) show, they have no intention to.
The rules explicitly state that whoever is appointing the directors, "including the government and other shareholders shall apply the fit and proper criteria" as laid out by the law for the composition of the board. And in defining the "fit and proper person", the law rules state that the person must not suffer from a conflict of interest. According to the rules "political office holders in a legislative role" cannot be appointed as directors.
Contrast that with two of the recent Lesco BOD appointments. One of them is a certain Waheed Alam Khan, who is a PML-N MNA from Lahore. The other one is Dr Aisha Ghaus Pasha, otherwise a noted economist, who needs little introduction for her economic research and consulting feats, Dr Aisha is also PML-N MPA in the Punjab assembly.
But this is not all. It so happens that Dr Musadik Malik, Special Assistant to the Prime Minister has been made the chairman of Lescos board and that too goes against the public sector corporate governance rules.
The rules clearly state that "the board shall elect its chairman from amongst the independent directors so as to achieve an appropriate balance of power, increasing accountability, and improving the boards capacity for exercising independent judgment."
Who is an independent director? An independent director is defined as a "non-executive director who is not in the service of Pakistan or of any statutory body or any body or institution owned or controlled by the government and who is not connected or does not have any other relationship, whether pecuniary or otherwise, with the public sector company, its associated companies, subsidiaries, holding company or directors." Thats a mouthful of definition. But the bottom line is that the chairmans appointment is also non-compliant with the rules.
Hopefully, Zafar Hijazi, the newly-appointed chairman SECP would prove his critics wrong by invoking the fit and proper criteria and take appropriate action under rule 25 of the said rules. Hijazis profile on SECPs website says "he has always led from the front and operated by the book". Lescos non-compliance with public sector corporate governance rules 2013 gives him the chance to walk that talk.