SECP holds workshop on principles of corporate governance

In collaboration with the International Finance Corporation (IFC) and Centre for International Private Enterprise (CIPE), the Securities and Exchange Commission of Pakistan (SECP) conducted workshop to raise awareness about Principles of Corporate Governance for Non Listed Companies. The SECP has introduced a voluntary regime of Principles to provide guidelines aimed at improving corporate governance in these companies, which are mainly family owned businesses.
The principles are in line with the best international practices and local statutory requirements. The principles provide guidance in the areas, including role of board of directors and independent directors, remuneration, oversight, and training of directors, internal control mechanism, and performance evaluation.
Amina Aziz, SECP director, Corporate Supervision Department, highlighted the importance of principles for SMEs and non-listed companies. She said that small business incubators have tremendous potential for growth and could transform to large-scale entities with potential for listing on stock exchange to attract capital from public. She said that raising capital from public through stock exchanges required more scrutiny about financial reporting, governance mechanism, legal compliances and market surveillance; hence, non-listed companies should improve corporate governance and financial reporting requirements therein, if interested in listing on stock exchange.
She also deliberated on the Code of Corporate Governance for Listed Companies. Munib Ansari, from IFC, highlighted the importance of SMEs in the economy and said that the IFCs' collaboration with the SECP is to improve corporate governance practices in Pakistan. He said that application of principles would transform business culture in Pakistan. Hammad Siddiqui, from CIPE, said that the effective implementation of the SECP's corporate governance principles can modernize the entire corporate culture of Pakistan. MujahidEshai, former president of Institute of Chartered Accountants of Pakistan, also emphasized the need to practice good corporate governance in SMEs and non-listed companies for sustainable business growth. He also highlighted the role of independent directors on a company's board.-PR