The State Bank of Pakistan (SBP) has issued revised Corporate Governance Regulatory Framework aimed at further strengthening of the corporate governance regime of banks and development finance institutions (DFIs).
According to a statement released by the SBP on Wednesday, the measure would also align banks and DFIs with international standards and best practices.
“The framework, developed in consultation with key stakeholders, covers Fit and Proper Test (FPT) Criteria and other corporate governance regulatory requirements for the shareholders and beneficial owners, members of the board of directors, presidents and CEOs,” it said. “All existing regulatory requirements related to corporate governance have been consolidated and rationalised in this framework to improve consistency, understanding and usability for stakeholders.”
The statement highlighted that such amendments were last introduced in 2007.
The board is now required to have adequate knowledge, expertise, and skill mix related to the business model, overall size, complexity and risk profile of the bank or DFI.
Moreover, the board should have at least one female director not related to any other director or shareholder of the bank or DFI, it stressed.
Published in The Express Tribune, November 23rd, 2021.
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