The appointment of Richard Morin, a Canadian national, as chief executive officer of the Pakistan Stock Exchange (PSX), has stirred a storm in a tea cup.

Weeks before his takeover last Thursday, the incumbent was looked upon by some of the member brokers as a pariah.

“He sure must have vast experience in working in developed international markets, but what does he know about the technicalities of the Pakistani bourse?” said one. And he elaborated: “Can he understand the ‘badla’ even if he were to hold on to the local bourse’s top job for two terms?”

Rumours were circulated of Mr Morin’s pay and perks racing up to Rs6.5m a month. Independent verification, however, revealed that the quoted figures were quite out of proportion and the incumbent PSX CEO’s remuneration about equals that of the outgoing managing director.

But setting aside Mr Morin’s case, whose appointment was in any case approved by the Chinese Exchanges that bought 30pc stake in the bourse and who were empowered under the terms of Sale-Purchase Agreement (SPA) to nominate personnel to three key management positions: The CEO, Chief Financial Officer (CFO) and the Chief Regulatory Officer (CRO) — the debate transcends to corporate heads.

Should foreigners be allowed to head companies or do the locals have exclusive right to the seat of the CEO or MD?

Should foreigners be allowed to head companies or do the locals have exclusive right to the seat of the CEO or MD?

“It all depends on the work expertise; whoever can do the job well should be fit to be appointed”, says Shabbar Zaidi, senior partner A.F. Ferguson & Co, chartered accountants.

He said that local heads of institutions such as PSX, in most cases, cannot shake off the influence of one or other powerful vested interests. At such times, a foreign head would be better off for the institution. He did not think that corporates should be in search of a foreigner to lead their Boards. “We have enough expertise within in every field”, Mr Shabbar Zaidi asserted.

Mr Khalid Mansoor who heads one of Pakistan’s largest Independent Power Producer (IPP)—the Hub Power Company Limited said that top jobs depend upon the “level of requirement”. He observed that in his days at Thar Coal Mining Project, he had appointed one German and another Greek top executive who worked until the locals developed expertise in those fields to take over.

Another head of a major firm, who asked not to be named, said that it was quite difficult for a foreigner to run a large corporation due to his little or nil knowledge about the prevailing, yet unwritten corporate culture.

“As sad as it sounds, isn’t it the local culture to grease the palm, starting from the peon all the way to the top officials, in most government departments, including the tax collectors, to get work done?”, he queried.

Similarly, a local fat cat is more likely to be aware of lobbying and cartels. If a foreign head of firm refuses to go by the old adage: ‘While in Rome, do as the Romans do’ and who insists on playing by the rules, he is likely to inflict loses on his firm.

This chief executive admitted that in some other countries also, extra amounts termed ‘tips’ were paid to get work done on a fast track, but he said, the money went to the national exchequer and not to line the pockets of individuals.

He alluded to the country’s pharmaceutical industry as one example where in the last twenty years, local drug manufactures have captured much of the market share by offering family medical practitioners lucrative gifts in the form of packages of costly medicine as ‘samples’ which the doctor then sell to patients through an adjacent medical store.

Also, many local drug pushers offer doctors (and their families) free flight and accommodation to offshore locations “to attend seminars” in exchange for prescribing their product in place of a similar medicine produced by a multinational pharmaceutical firm, regardless of efficacy.

But a foreigner cannot be restrained from holding the reins of a corporation or an important institution merely on the grounds that he does not excel in the art of getting work done by hook or by crook?

Shaukat Tarin, the former finance minister of the country and a one-time chairman of the bourse, told this writer that he finds no fault in placing a competent foreigner at the helm of a Pakistani institution. He also disclosed that during his time, he had advised the then prime minister to let an experienced and capable foreign national head PIA to take it off the ground.

“If the British can place a Canadian national as the Governor of the Bank of England, what harm is there in a foreign competent professional taking over, if he could breathe new life with new products in the Pakistani bourse?” he asked. To recall, a Canadian banker, Mark Carney, heads the UK’s central bank — being the first foreigner to run the 319-year old institution.

Perhaps it is the insistence on following rules that strikes fear in the heart of the wrongdoers. And honesty is as common a trait among the local headstrong top brass of too many corporations and institutions as perhaps in most widely experienced foreigners who land top jobs.

On the morning of his first day at the PSX, Mr Morin is reported to have expressed surprise as the staff strolled to office leisurely at 10 o’clock instead of 8:30 am as stipulated by the office manual. Already making enemies?

Published in Dawn, The Business and Finance Weekly, January 15th,2018