If the plan goes through, Defence Minister Chaudhry Ahmad Mukhtar would be the first casualty, as he currently heads Pakistan International Airlines (PIA).
The decision was taken at the second meeting of the Cabinet Committee on Restructuring of Public Sector Enterprises held under the chairmanship of Finance Minister Dr Abdul Hafeez Shaikh.
The committee also decided to appoint up to ten members on the boards of these PSEs, which will include private sector executives. It was also agreed upon to separate the offices of chief executive officers and chairpersons of the board of directors.
Former finance minister Shaukat Tarin had earlier stressed that eight PSEs were inflicting over Rs252 billion in losses to the exchequer mainly because of faulty policies adopted by their board of directors. The members of the boards have long been appointed on political grounds instead of considering professional qualification.
The committee decided to send these broader parameters to the ministries concerned to enable them to propose board nominees for the PSEs falling in their jurisdiction. This decision, it should be noted, is against the spirit of the earlier decision where the finance ministry was given full authority to restructure the boards.
The eight PSEs include Pakistan Electric Power Company and its distribution companies, Pakistan Railways, Pakistan Steel Mills, Pakistan International Airlines, Trading Corporation of Pakistan, Utility Stores Corporation Pakistan, Agricultural Storage and Services Company and National Highway Authority.
The committee deliberated upon multiple issues relating to the task of restructuring of PSEs and adopted the general principles. It decided that the size of the proposed board of directors may range between 8 and 10 members. The proposed names of the board must contain a right mix of government and private sector professionals with a greater leaning towards the private sector.
The private sector nominations should bring with them a balance in their academic and professional background to provide diversity of opinion for taking informed decisions. The committee also decided to observe regional balances in the nominations to the boards. It also emphasised on gender balance.
Board members, it was decided, will be also taken from the trade and industry sector, NGOs, academia as well as the media.
The committee decided to discourage the tendency of nominating board of directors from other ministries. More importantly, no representative of the finance ministry may be nominated unless absolutely necessary. It agreed upon that the CEOs and head of finance of each entity be a member of the BOD. It also decided to disallow multiple nominations on various boards.
Published in The Express Tribune, July 16th, 2010.
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