In Doing Business Report 2019 published in October 2018, Pakistan ranks at 26 out of 190 economies in Protecting Minority Investors indicator of Ease of Doing Business Index. This indicator measures minority shareholders’ rights in related-party transactions and in corporate governance.
Reforms that have been introduced or to be introduced to further improve Pakistan’s ranking in protecting minority interest area are mentioned in ensuing paragraphs. These reforms are in line with international best practices.
Reforms that have been completed since May 2018
Reform: Disclosure of remuneration of individual directors in annual report is encouraged in terms of the amendment made in the Listed Companies (Code of Corporate Governance) Regulations, 2017 vide notification number S.R.O. 1475 (I)/2018 dated December 5, 2018.
Impact: Enhanced disclosures with the objective of providing minority shareholders with comprehensive information about directors’ remuneration.
Effective Date: December 5, 2018
URL: https://www.secp.gov.pk/document/amendments-to-listed-ccg-regulations2017/?wpdmdl=33054
Reforms in process expected to be completed before April 2019
Reform: Comprehensive disclosure of related party transactions meeting certain specified criteria shall be required to be disclosed to the public through the Exchange.
Impact: The objective is to provide enhanced disclosure to minority shareholders.
Effective Date: Pakistan Stock Exchange has already sought public comments on the reform which may be made part of the PSX rule book after deliberation.
URL: Issued for public comments: https://www.psx.com.pk/psx/themes/psx/uploads/PSX-N-345.pdf