NA Committee Clears State-Owned Enterprises (Amendment) Bill.

NA Committee

The National Assembly Standing Committee on Finance and Revenue unanimously endorsed the State-Owned Enterprises (Governance and Operations) (Amendment) Ordinance, 2024.

The recent amendments now authorize the federal government to appoint or dismiss board members of government institutions.

 The revised bill incorporates several significant changes.

The SOE (Governance and Operations) (Amendment) Ordinance, 2024, was drafted in collaboration with the Law and Justice Division, taking into account the Ministry of Energy’s (Power Division) concerns.

Under the direction of the federal government, the Board Nomination Committee will now identify and recommend candidates for appointment as independent directors, whom the government has the authority to appoint to boards.

The committee will propose ex-officio positions to be held by relevant divisions or public sector organizations of the federal government, or, when needed, by provincial governments. As per the recent amendments, the committee will also assess the performance of ex-officio and independent directors and recommend the removal of directors based on their evaluations.

 The committee will engage head-hunting agencies or select candidates from the database of independent directors listed by the Securities and Exchange Commission of Pakistan (SECP) under Section 166 of the Companies Act, 2017. A director, upon appointment, will serve for the duration stipulated by relevant laws, unless they voluntarily resign or are earlier removed as per the provisions of this Act.

The director shall only be removed following an inquiry conducted in the prescribed manner that establishes:

.The director is found to be in breach of the provisions of this Act, or any other relevant law.

.The director is found to conduct themselves in a way that undermines the effective management and operation of the state-owned enterprise.

.The director is found culpable of misconduct.

Last week, the Senate Standing Committee on Finance and Revenue initially endorsed the bill. These amendments, approved today by the National Assembly, seek to allow the dismissal of board members based on performance assessments, replacing previous criteria predominantly cantered on misconduct or corrupt practices.