The Public Sector Companies (Corporate Governance) Rules, 2013, issued by the SECP, provide the primary legal framework for transparency, accountability, and prudent management of state-owned enterprises in Pakistan. The rules have been amended in 2017 and revised again in 2025 to reflect updated governance standards.
Applicability and Legal Framework
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Apply to all public and private companies where the government holds at least 51% voting power.
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Recent updates (2025) streamline compliance and incorporate feedback from line ministries.
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For listed PSCs, these rules take precedence over general Listed Companies Code of Corporate Governance Regulations.
Board Composition and Leadership
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Independent Directors: At least one-third of the board.
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Separation of Roles: Chairperson and CEO must be different individuals.
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Diversity: Minimum of one female director.
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Fit and Proper Criteria: All directors and the CEO must meet integrity and competence standards.
Key Governance Committees
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Audit Committee: Reviews financial statements, meets auditors at least once yearly without management.
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Human Resource & Remuneration Committee: Oversees performance evaluations and compensation.
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Nomination Committee: Manages formal selection of independent and other board members.
Operational Requirements
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Sound Management: Conduct business with integrity and care, aligned with government objectives.
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Internal Audit: Boards must establish a functioning internal audit department approved by the audit committee.
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Reporting & Compliance: Disclose board composition and ensure external audits follow IFAC ethics guidelines.
Conclusion
The 2025 updates reinforce governance, transparency, and accountability in Pakistan’s public sector, ensuring PSCs operate efficiently while adhering to ethical and regulatory standards.
