Listed Companies (Code of Corporate Governance) Regulations

What it is

Corporate governance for Pakistan's listed companies has run through successive codes: the original 2002 Code embedded in stock exchange listing regulations, the 2012 revision, the Listed Companies (Code of Corporate Governance) Regulations, 2017 made under the Companies Act, 2017, and the current 2019 Regulations, notified by the SECP in September 2019 [ENABLING PROVISION AND NOTIFICATION NUMBER — TO BE VERIFIED BY REVIEWING LAWYER]. The 2019 Regulations made a structural choice: a core of mandatory requirements, with the remaining provisions applying on a comply-or-explain basis, disclosed in an annual statement of compliance.

The mandatory core shapes every listed board. Independent directors must number at least two or one-third of the board, whichever is higher. The board must include at least one female director. The offices of chairman and chief executive are separated. The audit committee must be chaired by an independent director. A person may not serve as director of more than seven listed companies, and directors must complete accredited training on a phased schedule. The statement of compliance is annexed to the annual report and reviewed by the statutory auditor [THE EXACT REGULATION NUMBERS AND THE SCOPE OF THE AUDITOR'S REVIEW — TO BE VERIFIED BY REVIEWING LAWYER].

What changed

The 2019 Regulations remain the operative code; whether and how they have been amended since notification should be confirmed against the SECP's current consolidated text before advising on any specific provision [AMENDMENT NOTIFICATIONS — TO BE VERIFIED BY REVIEWING LAWYER]. The live front is sustainability. The SECP has pushed listed-company disclosure toward ESG and climate reporting — guidance first, then adoption of the IFRS sustainability disclosure standards (S1 and S2) on a phased basis for listed companies [THE ADOPTION NOTIFICATION AND APPLICABILITY DATES BY COMPANY SIZE — TO BE VERIFIED BY REVIEWING LAWYER]. Related-party transaction and directors' remuneration disclosure requirements under companion SECP instruments have also tightened over the same period. As of mid-2026, governance compliance for a listed company means the 2019 Regulations plus a widening disclosure perimeter around them.

Who is affected

Every company listed on the Pakistan Stock Exchange, together with its board, chairman, chief executive, company secretary, audit and human-resource committees, and statutory auditors. Sponsors planning a listing must build a compliant board before the IPO, not after. Institutional investors and analysts read the statement of compliance and the comply-or-explain disclosures, so the Regulations also shape how a listed company is priced and engaged by its own shareholders.

What to do

Map the board against the mandatory tier first: count the independent directors after every casual vacancy, confirm the female-director requirement is met, and check each director's total listed-company seats before any new appointment. Keep the comply-or-explain register honest — a board-approved, reasoned explanation is compliance; a boilerplate one is a disclosure risk. Calendar directors' training deadlines and the annual statement-of-compliance cycle against the auditor's timetable. Before the next annual report, confirm the current amendment state of the Regulations and whether the sustainability reporting standards have become applicable to the company's size bracket [TO BE VERIFIED BY REVIEWING LAWYER].