The databank of independent directors maintained by the Pakistan Institute of Corporate Governance (PICG) has become operational. Independent directors are generally seen as playing a key role in good governance and efficient functioning of the board.
The 2017 Companies Act requires that independent directors appointed under any law, rules, regulations or code are to be selected from a databank containing names, addresses and qualifications of persons who are willing to act as independent directors maintained by an institute/body authorized by the SECP. Accordingly, in January 2018, the SECP asked the PICG to maintain such a databank.
Thereafter, SECP notified the 2018 Companies (Manner and Selection of Independent Directors) Regulations, specifying procedure of selection of independent directors from such databank. The databank maintained by PICG is now active.
All individuals who have successfully attained a certification under the directors training program from any institute authorized by SECP or who have obtained an exemption from the requirement of directors training from the SECP can apply for inclusion in the databank. There is a onetime nominal charge from individuals for this service.
Registrants can apply online by accessing the PICG’s website and clicking on the independent directors’ link.
Companies desiring to appoint independent directors can also register online with PICG to access the databank on payment of a nominal annual subscription or a onetime access fee. Access to databank will only be given to registered companies.
The access will be controlled through the issue of login ID and password to maintain the confidentiality of information in the databank. The due diligence of the selection of independent directors, as envisaged in the Companies Act, will continue to rest with the company.
It is expected that the databank shall synchronize the details of experienced directors as well as newly qualified entrants, reinforcing the best governance practices in companies.