NA Committee Approves State-Owned Enterprises (Amendment) Bill

The National Assembly Standing Committee on Finance and Revenue unanimously approved the State-Owned Enterprises (Governance and Operations) (Amendment) Ordinance, 2024. The new amendments now empower the federal government to appoint or remove board members of government institutions. The amended bill introduces several key changes. The SOE (Governance and Operations) (Amendment) Ordinance, 2024, has been prepared in consultation with the Law and Justice Division and keeping in view the concerns of Ministry of Energy (Power Division). The Board Nomination Committee on directions of the federal government will now be responsible for identifying and recommending candidates for appointment as independent directors which the government is empowered to appoint to boards. The committee will recommend ex-officio positions to be held by relevant Division or public sector organizations of the federal government, or where necessary, a provincial government. According to the latest amendments, the committee will also be responsible for evaluating the performance of ex-officio and independent directors and recommending the removal of director/directors on the basis of evaluating their performances. The committee will appoint head-hunting agencies or identify candidates from the databank of independent directors notified by the Securities and Exchange Commission of Pakistan (SECP) under Section 166 of the Companies Act, 2017. A director, once appointed, shall hold office for the period specified under the applicable law, unless he resigns in waiting or is removed earlier in accordance with the provisions of this Act. The director shall not be removed unless it is established through an inquiry conducted in the prescribed manner that: Last week, the Senate Standing Committee on Finance and Revenue first approved the bill. These amendments, which have been passed today by the National Assembly, aim to enable the removal of board members based on performance evaluations, replacing previous criteria primarily focused on misconduct or corrupt practices.