Govt tightens rules for state-owned enterprises board

According to Dawn, the government has tightened the rules for appointing, inducting and evaluating boards of directors at state-owned enterprises, a reform tied to the International Monetary Fund programme. These state-owned enterprises have combined liabilities above Rs9 trillion. The Ministry of Finance issued revised Directors Appointment and Evaluation Guidelines on Thursday, addressed to every ministry, division and SOE.

The new framework applies chiefly to independent directors, while public officials will keep filling ex-officio seats. Boards must now flag vacancies immediately and send recommendations to the nominations committee, along with a performance report at least three months before a tenure ends. Committee members will receive working papers, including three candidates for each vacancy, three days before each meeting.

Each SOE must maintain a register of interests in a standard template issued by the finance ministry. Directors facing a conflict must step away from discussion and voting on that matter and are excluded from the quorum for that item. Board evaluations are now mandatory every year, at the end of a tenure and when a director resigns, with results shared with the Central Monitoring Unit.