SECP vide S.R.O. 1475 (I)/2018 dated December 5th 2018 notified amendments to the Listed Companies (Code of Corporate Governance) Regulations, 2017. These amendments broadened the BOD’s responsibilities w.r.t. compliance of Code of Corporate Governance.
In regulation 10, the following amendments are notified: –
- New regulation (1A) is inserted that, the Board of directors is responsible for adoption of corporate governance practices by the company and monitoring effectiveness of such practices and the members of board shall ensure to apply high ethical standards in performing their responsibilities.
- In Sub-Regulation 3, clause III is substituted by “adequate policy, systems and controls are in place for communication and disclosure with stakeholders, identification and redressal of grievances and queries of shareholders/ investors and complaints arising from unethical practices”
- In Sub-Regulation 3, new sub-clause – (va) “formal mechanism shall be in place for selecting, compensating, monitoring and, when necessary, replacing senior executives and overseeing succession planning and the remuneration of key executive and board may be aligned with the long term interests of the company and its shareholders”
In regulation 20, Proviso is inserted that Exemption may be granted from Directors training programme certification in following cases keeping in view the qualification and experience of the Directors: –
- a director having a minimum of 14 years of education and has 15 years of experience on board of listed company, local and/or foreign; or
- an individual having at least 25 years of post-qualification experience in fields of law, audit, tax, finance, corporate affairs, regulatory or government sector experience and is a member of professional body of accountants whose qualification is recognized as equivalent to post graduate degree by HEC; or
- an individual having at-least 30 years of experience in fields of law, audit, tax, finance, corporate affairs, regulatory or government sector experience and has a postgraduate degree in the above mentioned fields from a university in Pakistan or equivalent recognized and approved by the Higher Education Commission of Pakistan (HEC).”;
The expression “financial literate” shall mean a person who is a member of a recognized body of professional accountants or has a post graduate degree in finance from a university or equivalent institution, either in Pakistan or abroad recognized by the Higher Education Commission of Pakistan or who has at-least ten years of experience as audit committee members or at-least twenty years of senior management experience in overseeing of financial, audit related matters.
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