Islamabad, March 18, 2024 – The Securities and Exchange Commission of Pakistan (SECP) is proposing amendments to the Listed Companies (Code of Corporate Governance) Regulations, 2019 to elevate the Board’s responsibility towards environmental, social, and governance (ESG) considerations and gender equality and diversity & inclusion (DE&I).
The proposed amendments, in line with international best practices, emphasize the Board’s role in ensuring that listed companies operate with a comprehensive understanding of ESG considerations. Boards will be responsible for setting the company’s sustainability strategy, priorities, and targets. This will include aligning with the upcoming ESG Disclosure Guidelines to create long-term value for the company and its stakeholders.
The amendments also envisage a more active role for the Board in fostering DE&I within the company including promoting gender mainstreaming, gender equality, and the participation of women on boards, in management, and across the workforce. Further, to ensure proper oversight on ESG matters, the amendments propose that Boards be responsible for regular review and monitoring of the company’s progress towards its sustainability and DE&I goals.
The amendments will allow boards to establish a dedicated sustainability committee with at least one female director or they will be able to assign sustainability and ESG related matters to an existing committee. This committee will oversee sustainability efforts, DE&I practices, ESG compliance, and report on integrating sustainability for long-term company value.
By embracing these amendments, Boards can position their companies for success in a world increasingly focused on sustainability and DE&I. These actions not only benefit society and the environment but also contribute to long-term financial stability and provide a competitive edge.
The draft amendments are available for public comments and feedback on the SECP’s website at https://www.secp.gov.pk/document/draft-amendments-to-listed-companies-code-of-corporate-governance-regulations-2019/?wpdmdl=50999
