Business Professional Conference
Corporate Pakistan 2013
Institute of Cost and Management Accountants of Pakistan
Mohammad Iqbal Ghori FCMA
Transformation of state owned enterprises, local,
Process to make over the state owned organization
and business interest into commercial oriented
companies to introduce corporate governance to
safeguard the interest of all stakeholders.
Corporatization is a precursor to partial or
full privitization, which involves a process where
formerly public functions and public enterprises
are sold to private business entities.
ROLE OF GOVERNMENT
Building “Firewall” between the Government's policy making role and ownership
Professional and commercially
oriented management selected
by the BoDs
Strengthening of BoDs as
envisioned under the
Corporatization results improved transparency
Proper records of operations and business affairs.
Corporate entities gives rise to a well-regulated
and well-documented economic sector.
Corporatization in Pakistan
Corporatization was started on 8 October 1984 in
a vision to promote corporate sector.
The program was integrated in Privatization
program of Prime minister Nawaz Shairf.
Powerful Trade unions.
Uninformed Boards lacking competencies
and required experties.
Personal or political interest of BoD.
Immature and stubborn regulators.
Rubber Stamp Board
Approves without contest
Board makes operational
Board has dedicated
Not consulted on
either management or
Does not consider
Limited role of nonexecutive
Dominated by executives
Relies on information fed
Does not see its role as
Board functions as an
extension of a
Focus on state
versus needs of the PSE
Limited strategic focus
Limited role of nonexecutive
Not privy to key
between owners and
management with all
taken by owners
Often de-motivated for
lack of recognition,
BOD is devastating organizational hierarchy
BoD is unaccustomed with PSE’s rules of
Unwarranted discussion in BoD meeting
Short term view
Conflict of interest
BoD compromises the opinion of professionals
Undue dependency on consultants
Uninformed BoD even ignorant of good
practice of Board room.
Expected Role of PSE’s Board
Responsibility for the organizational
Elimination of lethargic and bureaucratic
behavior in the organization.
Articulation of Business plan
Performance monitoring system
Performance based compensation in lieu of
Hunting and retention of Professionals
Inculcation of transparency and accountability
Role of PSE’s Board
Finalization of Vision and Mission statement.
Manages potential conflicts of interest.
Avoid involvement in operational activities.
Formulation of policies.
Preparation of Financial Statement as IFRS.
Ensures financial statements are prepared.
Commercial oriented decision making process.
Corporate Social Responsibility.
Engagement of Stakeholders.
Political orientation toward the role of board and its
Training of line Ministries officers i.e. Secretaries,
Orientation session by SECP before nomination.
Excellent communication between bureaucracy and
Recruitment of effective boards to attracts
Performance Contract between BoD and GoP.
Implementation of Integrated Reporting in Public Sector
Mandatory Third Party Corporate Governance Audit.
Establishment of Holding Company to formulate Policy and
Help construct talent pool for all sector
Public Transparency thru disclosure of results.
Articulation of Business plan and approval after negotiation
Transparent and merit based selection and appointment of Board
Skilled Based Nomination Process.
Sector Specialist instead of Generalist.
Professional from at least Accounts/Audit, Law and H.R
Independent performance evaluation to eliminate conflicts of
Great governance is a journey,
Not a destination.
Past performance is, as the saying goes,
No guarantee of future success.
The board that becomes self‐ satisfied
Is a board that may underperform
Its full potential
And the organization’s needs.
Barry S. Bader