Pakistan Revising Code of Corporate Governance

Pakistan's SEC has just released for comments proposed amendments to the Code of Corporate Governance 2002. The proposed modifications are designed to help Pakistan continue its efforts to build strong and transparent capital markets. All of these changes are being made to help move Pakistan more into line with international best praticies.

The revisions to the Code of Corporate Governance will strengthen the composition of boards of directors by prohibiting board members and outside audit firms from also serving as internal auditors. In addition, the use of more outside directors is being required and, under the new draft, at least 1/3 (or 3 at a minimum) of the directors must be indpendent. Related party transaction disclosure rules are also being enhanced as part of the Code revisions.