An Analysis of Corporate Governance Legal Framework and Practices in State-Owned Enterprises: Insights from Power Sector of Pakistan
Keywords:
Corporate Law, Corporate Governance, Legal Frameworks, Power Sector, Sustainable Practices, Public Sector Undertakings.Abstract
This study analyzes the poor corporate governance (CG) practices in the state-owned power transmission and distribution companies of Pakistan to ensure their effective rehabilitation. The power sector of Pakistan, an amalgamation of public and private enterprises, is facing continuous hindrance since long due to governance issues and despite of frequent struggles existing inconsistencies in governance legal frameworks and practices could not be rectified. Poor governance issues not only caused the bifurcation of the Water and Power Development Authority (WAPDA) into various distribution and transmission companies (NTDC and DISCOs) and then privatization of Karachi Electric Supply Company (KESC), but the due circumstances are leading the remaining all public sector electricity transmission and distribution companies towards privatization for their rehabilitation. This study utilizes the doctrinal research method with the qualitative approach to investigate the inconsistencies in the existing CG laws and practices responsible for poor CG practices in the SOEs of this important sector of Pakistan. This study sorts recommendations to enhance good CG practices with robust implementation of existing CG legal frameworks in the SOEs which will eliminate these inconsistencies to improve good CG practices by averting regulatory non-compliances. It will ultimately provide a way to improve service delivery efficiency, accountability, transparency, disclosure, and proper board formation to avert privatization. The study's outcomes sought recommendations regarding the robust implementation of the existing CG legal framework in SOEs. The strict supervisory control of the regulators will free the companies from frequent political interference, leading to corrupt practices and improper board formation. This study's consequences will benefit academic researchers and provide valuable insights for regulators, policymakers, and other stakeholders.
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