Mostly, there are good points in the draft SECP-SRO 1319 (amendments), e.g., the increased emphasis on ethics, transparency, decoupling of the CFO and Company Secretary roles (where they are combined).  As we know, SBP had issued CRM Guidelines for the banking sector last year and, inter-alia, asked the banks to appoint Conduct/Ethics Officers.  SECP's regulations, though, fall short of the requirement to appoint an Ethics/Integrity Officer in companies -- that is the need of the day and we must learn from the examples of the corporate sector in the Western countries, particularly, where we do see such positions at the top.

On the Company Secretary role (wherever combined), I had somehow felt that it was kind of subsumed in the CFO role with the latter being more dominant.  A company secretary is like a "gatekeeper" of corporate governance in any organization and must play that role powerfully.  It should not just be confined to ensuring that the BOD procedures are followed and minutes taken (though, that is also a critical responsibility, especially when it comes to communicating the decisions effectively and getting them implemented), etc.  Similarly, in my opinion, the Legal Head and Company Secretary roles should be bifurcated wherever they are combined, except perhaps in smaller listed companies. The Company Secretary should not get bogged down in the Legal-related work as this may not leave him/her adequate time to concentrate on the corporate governance side and in taking proactive part in organizational culture-building activities, which cannot just be left to HR only -- in fact it should be a combined GRC + HR led effort involving, of course, other functions too.

One point that still sticks like a sore thumb is the exemption allowed to certain BOD members based on their experience or prior qualifications.  On one hand, there is much talk (or is it lip service?) about continuous learning from cradle to grave and, on the other hand, it appears some people have a rather condescending attitude when it comes to training.  Even if DTP (Directors' Training Program -- offered by 4-5 approved institutions like PICG, ICAP, etc.) is like a refresher program for many, it ought to be mandatory -- at least for some time.  Don't many of us go to conferences, summits, courses, the contents of which we are well-versed in, due to our "long experience"?  It would be good to have a mix of rookie directors, aspiring directors and experienced directors in DTPs so that they all learn from each other (not only the experienced directors flaunting their knowledge and expertise). It is already being offered on a condensed basis as a four-day program and I believe some of the areas that have been mentioned in this SRO are not adequately covered in DTP the way it is being offered today. For instance, Business Ethics is not given the kind of rigorous treatment it deserves. In fact, good corporate governance can flourish only if an ethical culture exists! It is no longer a topic of interest to only "professors and philosophers" as some corporate leaders used to think.  Now, we have the regulatory stick (both from SBP and SECP) that drives this topic.

The circular provides for certain policies to be posted on the websites of companies. This would ensure transparency and even encourage many companies to finally come up with these policies. In turn, this would enable sharing of best, good, or leading market practices in the areas covered by these policies.  However, the bigger challenge would be for these organizations to make their staff thoroughly aware of the policies applicable to them. What generally happens is that a policy is conveyed to the employees and an undertaking/confirmation taken from the employee of having read and understood a particular code or policy -- this practice is futile.  To make it meaningful, the staff have to be appropriately indoctrinated in these policies/codes by using a variety of techniques.

At the end of the day, it is up to the leadership to set the tone and determine the type of culture it wants in the organization -- an ethical one I hope!

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