June 9, 2002	Sunday	Rabi-ul-Awwal 27,1423

KARACHI, June 8: Hinting at setting up of corporate governance index, the Chairman of Securities and Exchange Commission of Pakistan (SECP) Khalid Mirza said such a device will help monitor the listed companies and their compliance with corporate code.

“This will help in judging corporate governance level in the listed companies.” He was addressing seminar on the code of corporate governance, organized by Modaraba Association of Pakistan Leasing Association of Pakistan, Investment Banks Association and Mutual Fund Association of Pakistan here on Saturday.

He said the commission, besides considering the setting up of the said Index, was planning to establish an institute to educate directors on the issues pertaining to the corporate governance.

“Such institute can offer courses on the corporate governance and conduct seminars and short courses to create awareness among the officials concerned to ensure the enforcement of the corporate governance in their respective bodies,” he said.

He said the social and commercial pressure from the stakeholders was another significant factor to make the companies observe the corporate governance.

Substantiating his plea, he said in the US, Mutual and Pension funds exerted pressure on the companies to enforce the corporate governance norms though Wall Street does not like these rules.

He deplored that the shareholders were neither aware of their rights and force to shape the working of the companies they invest in and nor were they given any such weightage from the managements of companies.

A strong movement from shareholders for protecting their interest and checking the companies indulging in such practices, which they consider will go against their or company’s interest, should be in place.

He said the code of corporate governance is the document where all the provisions, rules and practices were put together. However, he agreed with the participants that some rules were complicated or ambiguous and needed some elaborations.—APP