KARACHI, May 27: Tax experts and consultants were of unanimous view that the Code of Corporate Governance will greatly assist in developing the much-needed corporate culture, which could protect local and foreign funds required for the growth of corporate sector.

Speakers at a one-day seminar on “Code of Corporate Governance and Company Law”, organized by the Income Tax Bar Association, Karachi on Monday, said that the Code of Corporate Governance recently notified by the Securities and Exchange Commission of Pakistan was the first ground-breaking effort at promoting corporate culture.

The two speakers — Ebrahim Sidat, representing chartered accountants fraternity, and Tahir Mahmood from the SECP — expressed similar views about the new code, which had come in for strong criticism from a section of the corporate sector.

Ebrahim Sidat, who played an active role in framing of new code for corporate governance, said that governance was the basic issue impeding the growth of corporate sector and not the management.

Though the new code for corporate governance was not wholly new as it existed in the Company’s Law, still a serious attempt has been made for promoting good corporate governance in the country.

It has been framed after extensive deliberations involving 60 to 70 institutions and trade bodies, and information gathered from the world over, before finalizing the document, he added.

“I would not say that the document is complete in every aspect, but still it is a good beginning towards promoting corporate culture,” Sidat said.

All care had been taken to ensure that the code serves local situation and issues peculiar to the country, he added.

He said that one of the major issues in the corporate sector was the formation of board of directors. He said a large number of listed companies are currently of close holding, or what is generally known as a single family holding. As a result, he added, the interest of minority shareholders was not protected.

The new code, he said, had taken care of issues like composition of board of directors, eligibility criteria to act as a director, term of office of directors, responsibilities of board of directors, and corporate and financial reporting.

The chief guest, Karachi Stock Exchange chairman Saleem Chamdia, highlighted the working of the stock exchange and said that after the notification of the code it was now the duty of the stock exchange to ensure that it was followed in letter and spirit.