Breaking the Mold: SECP’s Bold Step Toward Shareholder Empowerment

Breaking the Mold: SECP’s Bold Step Toward Shareholder Empowerment

Written exclusively for PICG
By Ghazain Khan Magsi, Manager Governance – PICG

The Securities and Exchange Commission of Pakistan (SECP) has taken a decisive step to modernize corporate governance in listed companies by amending the Code of Corporate Governance Regulations, 2019 [1]and Postal Ballot Regulations, 2018[2]. These reforms[3] address longstanding issues in our corporate landscape, aiming to enhance transparency, accountability, and shareholder empowerment. Changes such as removing category-wise voting for board elections and mandating director attendance at general meetings—go beyond check-the-box compliance. They aim to restore balance where it matters most: in the boardroom. By eliminating rigid voting categories, the new framework gives minority shareholders a better chance at board representation, something long overdue in our highly concentrated ownership environment.

Notably, the enhanced role of the scrutinizer in validating director nominations and proxy forms injects much-needed transparency into board elections, often one of the least contested but most consequential corporate actions. Encouraging external board evaluations and recording shareholder meetings reflect a quiet but clear shift: directors must now be more visible, accountable, and performance focused.

These reforms signal a move away from symbolic governance toward real accountability. It’s now up to boards and shareholders alike to embrace this momentum and set a new standard for corporate fairness and trust. By actively participating in this new governance framework, stakeholders can ensure that the principles of transparency and accountability are upheld, fostering a more equitable corporate environment.

[1] Listed Companies (Code of Corporate Governance) Regulations, 2019 amended up to March 20, 2025 – https://www.secp.gov.pk/document/listed-companies-code-of-corporate-governance-regulations-2019-amended-up-to-march-20-2025/?wpdmdl=56708&refresh=6863b1e37a6f61751364067

[2] Companies (Postal Ballot) Regulations, 2018 amended up to March 20, 2025 – https://www.secp.gov.pk/document/companies-postal-ballot-regulations-2018-amended-up-to-march-20-2025/?wpdmdl=56709&refresh=6863b1e379d131751364067

[3] SECP introduces regulatory reforms to enhance corporate governance-Press Release https://www.secp.gov.pk/wp-content/uploads/2025/03/Press-Release-SECP-introduces-regulatory-reforms-to-enhance-corporate-governance.pdf