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IMPACT OF NEW GOVERNANCE MODEL

ON PERFORMANCE OF DISTRIBUTION
COMPANIES UNDER PEPCO

Supervisor

Malik Nadeem Hassan

Submitted by

Khalid Masood
1434-315002
MBA-IT (E) 2.5 Years

PRESTON UNIVERSITY

SECTOR, H-8/1, ISLAMABAD CAMPUS, ISLAMABAD

November 28, 2016

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

IMPACT OF NEW GOVERNANCE MODEL ON PERFORMANCE OF


DISTRIBUTION COMPANIES UNDER PEPCO

Submitted to the faculty of the Business Administration Department of the Preston University
Islamabad in partial fulfilment of the requirements for the Degree of
Masters
In
Business Administration

Student

Examiner

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

TABLE OF CONTENTS
ACKNOWLEDGEMENT..............................................................................................................5
DEDICATION................................................................................................................................6
DECLARATION.............................................................................................................................7
ACRONYMS..................................................................................................................................8
EXECUTIVE SUMMARY............................................................................................................9
1

INTRODUCTION.............................................................................................................12
1.1

Background of Governance in WAPDA & PEPCO...............................................12

1.2

Corporate Governance...........................................................................................13

1.3

Problem Statement:................................................................................................14

1.4

Aim of my Research:.............................................................................................15

1.5

Objectives of my Research:...................................................................................15

1.6

Significance of the Study:......................................................................................15

1.7

Hypothesis:............................................................................................................15

1.8

Questions of the Research:.....................................................................................16

LITERATURE REVIEW...................................................................................................17
2.1

Corporate Governance...........................................................................................17

2.2

The Stakeholder Approach to Corporate Governance...........................................19

RESEARCH METHODLOGY.........................................................................................21
3.1

Focus of the problem.............................................................................................21

3.2

Research Design.....................................................................................................21

3.3

Data Sources..........................................................................................................21

3.4

Data Analysis.........................................................................................................21

3.5

Data Collection Techniques...................................................................................22

3.6

Population and Sample..........................................................................................22

3.7

Tools of Data Collection........................................................................................23

3.8

Policy Implications................................................................................................23

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

TABLE OF CONTENTS
3.9
4

Limitation...............................................................................................................23

DATA ANALYSIS.............................................................................................................24
4.1

Data Processing and Analysis................................................................................24


4.1.1 Primary Data..............................................................................................24
4.1.2 Secondary Data..........................................................................................24

4.2

SECP PSC (Corporate Governance) Rules 2013...................................................24


4.2.1 Composition of Board................................................................................24
4.2.2 Role of Chairman and CEO (Separation of two positions)........................25
4.2.3 Responsibilities, Powers and Functions of the Board................................26
4.2.4 Performance Evaluation.............................................................................28
4.2.5 Board Committees......................................................................................28
4.2.6 Directors Remuneration.............................................................................28

4.3

IESCO BoD Historical Data..................................................................................29


4.3.1 IESCO Board of Directors (1999)..............................................................29
4.3.2 IESCO Board of Directors (2005)..............................................................29
4.3.3 IESCO Board of Directors (2011)..............................................................30
4.3.4 IESCO Board of Directors (2013)..............................................................30
4.3.5 IESCO BoDs - Composition......................................................................31

4.4

Performance of Distribution Companies...............................................................31

4.5

Data Analysis Outcomes........................................................................................33

CONCLUSION..................................................................................................................35

RECOMMENDATIONS...................................................................................................36

REFERENCES..............................................................................................................................37

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LIST OF TABLES
TABLE 2-1 (STAKEHOLDERS PERSPECTIVE).......................................................................20
TABLE 4-1 (IESCO BOD, 1999)..................................................................................................29
TABLE 4-2 (IESCO BOD, 2005)..................................................................................................29
TABLE 4-3 (IESCO BOD, 2011)..................................................................................................30
TABLE 4-4 (IESCO BOD, 2013)..................................................................................................30
TABLE 4-5 (IESCO BOD, COMPOSITION)...............................................................................31
TABLE 4-6 (LINE-LOSSES DATA).............................................................................................31
TABLE 4-7 (COLLECTION / RECOVERY)...............................................................................32
TABLE 4-8 (RECEIVABLES)......................................................................................................32

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

ACKNOWLEDGEMENT

Preston University is one of the renowned universities of


Pakistan working under Higher Education Commission to provide
quality education in Pakistan. This institute is contributing a lot in
the personal and professional growth of individuals who wish to
make

career

in

the

fields

of

business

administration,

information technology, engineering and technology, natural and


applied science, and social sciences. May ALLAH almighty bless
this esteemed institution and give it a continued success so that
it contributing its role by producing well trained and having
excellent vision leaders to serve the nation.
I am thankful to Preston University, Islamabad Campus for
providing me an opportunity to learn enough skills of writing
research paper. I am also thankful to Malik Nadeem Hassan,
Project Supervisor, for providing me guidance and confidence in
completing this research paper.
I am thankful to some of my class fellows who provided their
valuable comments during preparation of this research paper. I
also extend my thanks to my friends and family for providing
their remarkable cooperation in completion of this task.

KHALID MASOOD
Registration No: 1434315002
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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

Class MBA-IT (E) 2.5


Years

DEDICATION

I would like to dedicate this project to my parents teachers and friends. Without
their continuous support and counseling, I could not have completed this
project.

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

DECLARATION

I hereby certify that this research work of the project is based on my own work.
The work is not prescribed elsewhere for assessment. The material that has been
used from other sources is acknowledged / referred.

_________________________
KHALID MASOOD
Registration No: 1434-315002
Class MBA-IT (E) 2.5 Years

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

ACRONYMS

IESCO

Islamabad Electric Supply Company

LESCO

Lahore Electric Supply Company

FESCO

Faisalabad Electric Supply Company

PESCO

Peshawar Electric Supply Company

HESCO

Hyderabad Electric Supply Company

GEPCO

Gujranwala Electric Power Company

MEPCO

Multan Electric Power Company

QESCO

Quetta Electric Supply Company

CEO

Chief Executive Officer

BoD

Board of Directors

ICT

Islamabad Capital Territory

IPP

Independent Power Producers

WAPDA

Water and Power Development Authority

NEPRA

National Electric Regulatory Authority

GoP

Govt. of Pakistan
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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

DISCOs

Distribution Companies of Power Sector

GENCOs

Generations Companies of Power Sector

SPP

Small Power Producers up to 50 MW

NTDC

National Transmission and Dispatch Company

PEPCO

Pakistan Electric Power Company

CCOR

Cabinet Committee on Re-structuring

EXECUTIVE SUMMARY
The power sector is in great crises now a day. The main issue with
the sector is insufficient and unaffordable power generation, resulting in
unbearable power (load shedding) and very high tariff for the people of
Pakistan as compare to their purchasing power. The circular debt is also
an issue which is hampering the national economic development extra
ordinary. In addition to above the performance of public entities working
under PEPCO known as DISCOs and GENCOs are facing serious crises of
governance which is the worst scenario in the history of nation. Although
the performance of two to three companies is reasonable but overall
picture is not reasonable. Therefore, there is a dire need to improve the
situation; currently these corporate entities are being governed by board
of directors. The majority of these directors belong to private sector
including chairman board of directors, the nominations of these directors
are made on political links rather than merit and stake. The CEOs are
facing a large number of problems to run the business.
The detail study has been made in this research paper on corporate
governance and its different models tried in the globe. A large number of
report written by agency/ Institute/ Donors and Individual Professionals
studied to link more appropriate governance model, So that these
companies can be transferred into successful business entities with
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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

improved financial health and image, acceptable to all stake holder


including the general public. The issue of non-stake holder is a dominating
factor in corporate governance. Therefore, after comprehensive analysis a
model has been suggested to run the business till the privatization of
these government owned entities.
To have better understanding it is necessary to overview the historic
perspective. The Pakistan Water and Power Development Authority
(WAPDA) were established through an act of parliament in February 1958
for integrated and rapid development and maintenance of water and
power resources of the Country. This includes controlling soil salinity and
water logging to rehabilitate the affected land in order to strengthen the
predominantly agricultural economy of the Country.
As per the charter, amended in March 1959 to transfer the existing
electricity departments from the federating units to it, WAPDA has been
assigned the duties of investigation, planning and execution of projects
and schemes for:

Generation, Transmission and distribution of Power,

Irrigation, water supply and drainage,

Prevention of water logging and reclamation of saline land,

Flood control and

Inland navigation.

Under the later on development, vis--vis the "Energy Policy 1994",


setting up of thermal power generation projects has been shifted to the
private sector. Similarly, as a result of restructuring of the Power Wing in
the recent years, the utility part has been corporatized into independent
companies. This shift from convergence to divergence has given birth to
12 entities to operate in different zones. Now there are 15 independent
entities. These are National Transmission and Dispatch Company (NTDC),
four thermal power generation companies (GENCOs) and 10 distribution
companies (DISCOs). The present status of these companies is of
corporate public limited entities, ultimately to go privatized as planned;
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The Residual Power Wing is therefore now responsible for major


hydroelectric power projects and schemes in operation and to come up
along such up-coming private sector projects in the private sector under
the reviewed "Energy Policy 2000".
When WAPDA started its function there was the installed generation
capacity in few hundred Mega Watts with 200-300 thousand electricity
customers. WAPDA made a tremendous progress in the development of
Water and Power projects like Mangla Dam, Tarbella Dam in Hydel Power
Generation and Guddu, Jamshoro & Kot Addu Thermal Power Station.
In Junijo Government regime, government decided to introduce
independent power plants (IPPs) in private sector to attract the private
sector investment. The distribution business was being managed by
WAPDA in the shape of eight Area Electricity Boards i.e. Islamabad Area
Electricity Board, Gujranwala Area Electricity Board, Faisalabad Area
Electricity Board, Lahore Area Electricity Board, Multan Area Electricity
Board, Hyderabad Area Electricity Board, Quetta Area Electricity Board
and Peshawar Area Electricity Board, by the passage of time volume and
activities of WAPDA increased extra ordinary and the energy of Wapda
authority started wasting in distribution business instead of development
of water & power projects. Government decided to unbundle WAPDA in
eight distribution companies (IESCO, LESCO, FESCO, MEPCO, GEPCO,
HESCO, QESCO & PESCO) Three generation companies (GENCO-1 GENCO2 & GENCO-3) and one National Transmission & Dispatch Company
(NTDC) rest of all activities and departments (Water, Hydro generation,
health & training etc.) with the name of residual Wapda. The purpose
behind this unbundling was to improve governance and separate their
assets to convert them into an accounting model so that these companies
can be privatize. Accordingly, all these entities declared as companies in
1998 to be functioned under company act 1984. Parallely government
established NEPRA under NEPRA Act 1997 for the regulation of power
sector (Generation, Transmission & Distribution). These companies work
under Company Act 1984 till August 2013. In March 2013 Security
Exchange of Pakistan (SECP) publish Public Sector Companies (Corporate
Governance) Rules 2013 which came into force w.e.f August 2013.

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In 2010 Government notified guidelines for constitution of BOD for


these entities on recommendation of Cabinet Committee on Restructuring (CCOR). Inspite of all these recommendations and rules GOP
failed to appoint the BODs of these entities according to recommendation
and political affiliation remained a dominating factor and majority of
nominations /appointment made without following any criteria, resultantly
the performance of these entities /BODs remained very poor and the
companies image and business affected badly in addition to poor financial
health and a heavy contribution in circular debt. The most prominent
factor of their poor performance is the appointment of non-stake holders
in addition to incompetence, inexperience, having political links as well as
conflict of interest and without vision. In some cases, BOD size was
extraordinary big. The appointment of Chairman BOD of some companies
was quite a blunder. Although the BODs constituted in 2013 by new
Government are far better than BODs constituted in 2011, but 70% of
nominations are from private sector. The issue of stake still needs to be
resolved, in addition to transferred notorious appointments.
A comprehensive model for Corporate Governance is proposed in this
research paper as recommendations, based on a vast research made by
study of many international reports on this issue, the study of comments of
national professional and my personal experience of 30-years in power sector (All reference
are given at the end of document).
I hope that this research will reasonably contribute in resolving the issue of bad
governance in power sectors government owned companies.

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1 INTRODUCTION
1.1 Background of Governance in WAPDA & PEPCO
The Pakistan Water and Power Development Authority (WAPDA) was established
through an act of parliament in February 1958 for integrated and rapid development and
maintenance of water and power resources of the Country. This includes controlling soil
salinity and water logging to rehabilitate the affected land in order to strengthen the
predominantly agricultural economy of the Country.
As per the charter, amended in March 1959 to transfer the existing electricity departments
from the federating units to it, WAPDA has been assigned the duties of investigation,
planning and execution of projects and schemes for:

Generation, Transmission and distribution of Power,

Irrigation, water supply and drainage,

Prevention of water logging and reclamation of saline land,

Flood control and

Inland navigation.

DISCOs were known as regions in the early years of WAPDA. In 1981 WAPDA regions
renamed as AEB, through amendment in WAPDA Act.
In 1992 GoP decided to restructure WAPDA. Consequently, in 1998 GoP got Registered
DISCOs under 1984 Company Ordinance and constituted their independent board of
directors. Since then power sector companies remained governed by memorandum and
article of association companies act 1984.
In 2007 WAPDA unbundled and 8xDISCOs, 3xGENCOs & 1x Transmission & Dispatch
Company placed under PEPCO (a holding company). A board of governor appointed to look
after the PEPCO governance responsibilities with Secretary Ministry of Water & Power as
Chairman. The MD PEPCO appointed as head of executive management. Till end of 2010
PEPCO looked after /monitored DISCO, GENCO & NTDC after that the role of PEPCO
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withdrawn and the nomination of BOD and monitoring of power sector entities started at
Ministry of Water & Power and all this arrangement was made on the recommendation of
Cabinet Committee on Reforms (CCOR).
The initial formula for composition of board was:

4 x public sector directors

3 x private sector directors

(But this formula never observed by the government while constituting BODS)

With the erosion of central control of PEPCO, the operational performance of power sector
entities badly affected and a serious governance issues arisen.
Security & Exchange Commission of Pakistan published Public Sector Companies
(Corporate Governance) Rules 2013 which came into force w.e.f. 2013.
The Government of Pakistan reconstituted Board of Directors of power sector
corporate entities in July 2013, but did not follow these rules in letter and spirit. In most of
the companies, private sector nominations are made a high majority of 70% members. These
companies are facing serious governance problems due to nominations of non-stake holders
on their BODs which are appointed on political affiliations and most of them are incompetent
and inexperienced. This situation requires an immediate attention to reconstitute these BODs
on merit and according to the principle of constitution of corporate governance bodies for
public sector corporations.

1.2 Corporate Governance


Good corporate governance contributes to sustainable economic development by
enhancing the performance of companies and increasing their access to outside capital. In
emerging markets good corporate governance serves a number of public policy objectives. It
reduces vulnerability of the financial crises, reinforcement property rights; reduces
transaction cost and cost of capital and leads to capital market development. Corporate
governance concerns the relationship among the management, board of directors, controlling
shareholders, minority shareholders and other stakeholders.

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A corporate governance system is comprised of a wide range of practices and


institutions, from accounting standards and laws concerning financial disclosure, to executive
compensation, to size and composition of corporate boards. A corporate governance system
defines who owns the firm, and dictates the rules by which economic returns are distributed
among shareholders, employees, managers, and other stakeholders. As such, a county's
corporate governance regime has deep implications for firm organization, employment
systems, trading relationships, and capital markets. Thus, changes in Pakistani system of
corporate governance are likely to have important consequences for the structure and conduct
of country business.
In its broadest sense, corporate governance refers to a complementary set of legal,
economic, and social institutions that protect the interests of a corporations owners. In the
Anglo-American system of corporate governance these owners are shareholders. The concept
of corporate governance presumes a fundamental tension between shareholders and corporate
managers. While the objective of a corporations shareholders is a return on their investment,
managers are likely to have other goals, such as the power and prestige of running a large and
powerful organization, or entertainment and other perquisites of their position. In this
situation, managers superior access to inside information and the relatively powerless
position of the numerous and dispersed shareholders, mean that managers are likely to have
the upper hand. The researchers have offered a number of solutions for this agency problem
between shareholders and managers which fall under the categories of incentive alignment,
monitoring, and discipline. Incentives of managers and shareholders can be aligned through
practices such as stock options or other market-based compensation. Monitoring by an
independent and engaged board of directors assures that managers behave in the best
interests of the shareholders. Chief Executive Officer (CEO)s who fail to maximize
shareholder interests can be removed by concerned boards of directors, and a firm that
neglects shareholder value is disciplined by the market through hostile takeover.
The code of corporate governance introduced by SECP in early 2002 is the major step in
corporate governance reforms in Pakistan. The code includes many recommendations in line
with international good practice. The major areas of enforcement include reforms of board of
directors in order to make it accountable to all shareholders and better disclosure including
improved internal and external audits for listed companies. However, the codes limited
provisions on directors independence remain voluntary and provide no guidance on internal
controls, risk management and board compensation policies.

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1.3 Problem Statement:


Do the bad performance of Distribution companies under PEPCO is due to bad governance of
their BODs.

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1.4 Aim of my Research:


The aim of this report is to;
To propose suitable governance model to improve efficiency of government owned
electricity companies till their privatization.

1.5 Objectives of my Research:


The main objective of my research is to develop a governance model to improve efficiency of
DISCOs especially in the field of line losses, collection and customer service so that national issues of
load shedding, affordable tariff and circular debt can be resolved.

1.6 Significance of the Study:


The research work on governance will help to overcome the issue of governance and will
contribute to reduce load shedding, reduce electricity tariff and improve customer services. The study
will also help us to evaluate the performance and reasons of bad performance as well as its remedy.

1.7 Hypothesis:

Null Hypothesis:
H0: The governance (BoDs) is responsible for bad performance of electricity distribution companies
(DISCOs) under PEPCO.

Alternative Hypothesis:
H1: The governance (BoDs) is not responsible for bad performance of electricity distribution companies
(DISCOs) under PEPCO.

Null Hypothesis:
H0: The members of Board of Directors of electricity distribution companies (DISCOs) under PEPCO are
real stake holders.

Alternative Hypothesis:
H1: The members of Board of Directors of electricity distribution companies (DISCOs) under PEPCO are
not real stake holders.

Null Hypothesis:
H0: The selection of members of Board of Directors of electricity distribution companies (DISCOs)
under PEPCO is made on merit.

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Alternative Hypothesis:
H1: The selection of members of Board of Directors of electricity distribution companies (DISCOs)
under PEPCO is not made on merit.

Null Hypothesis:
H0: The selection criterion for selection of members of Board of Directors of electricity distribution
companies (DISCOs) under PEPCO is correct.

Alternative Hypothesis:
H1: The selection criterion for selection of members of Board of Directors of electricity distribution
companies (DISCOs) under PEPCO is not correct.

1.8 Questions of the Research:


Following questions are raised in research report
1.
2.
3.
4.
5.

Why the performance of electricity distribution companies is not good?


What are the major causes of bad governance?
How the performance could be improved?
What measures are required for good governance?
What is the impact of governance of performance?

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2 LITERATURE REVIEW
2.1 Corporate Governance
The assessment of the corporate governance for developed markets is well researched
area. Studies have shown that good governance practices have led the significant increase in
the economic value added of firms, higher productivity and lower risk of systematic financial
failure for countries. It has now become an important area of research in emerging markets as
well.
For US Firms a broad measure of Corporate Governance Gov-Score is prepared by
Brown and Caylor (2004) with 51 factors, 8 sub categories for 2327 firms based on dataset of
Institutional Shareholder Service (ISS). Their findings indicate that better governed firms are
relatively more profitable, more valuable and pay more cash to their shareholders. Gompers,
Ishii and Metrick (2003) use Investor Responsibility Research Centre (IRRC) data, and
conclude that firms with fewer shareholder rights have lower firm valuations and lower stock
returns. They classify 24 governance factors into five groups: tactics for delaying hostile
takeover, voting right, director/officer protection, other takeover defenses, and state laws.
Most of these factors are anti-takeover measures so G-Index is effectively an index of antitakeover protection rather than a broad index of governance. Their findings show that firms
with stronger shareholders rights have higher firm value, higher profits, higher sales growth,
lowest capital expenditures, and made fewer corporate acquisitions.
In past few years corporate governance has become an important area of research in
Pakistan. Cheema, et al. (2003) suggests that corporate governance can play a significant role
for Pakistan to attract foreign direct investment and mobilize greater saving through capital
provided the corporate governance system is compatible with the objective of raising external
equity capital through capital markets. The corporate structure of Pakistan is characterized as
concentrated family control, interlocking directorships, cross-shareholdings and pyramid
structures. The concern is that reforms whose main objective is minority shareholder
protection may dampen profit maximizing incentives for families without providing
offsetting benefits in the form of equally efficient monitoring by minority shareholders. If
this happens the reform may end up creating sub optimal incentives for profit maximization
by families. They argue that a crucial challenge for policy-makers is to optimize the dual
objectives of minority shareholder protection and the maintenance of profit-maximizing
incentives for family controllers. There is a need for progressive corporations to take a lead
in the corporate governance reform effort as well.
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Rais and Saeed (2005) analyses the Corporate Governance Code 2002 in the light of
Regulatory Impact Assessment (RIA) framework and its enforcement and application in
Pakistan in order to understand the dynamics of public decision making and assess the
efficacy of the regulation policy of SECP in the arena of corporate governance. The analysis
shows that though the listed companies are gearing themselves up to adopt the Code, there
are some constraints, and reservations about the way it was drafted and implemented. The
study by Ghani, et al. (2002) examines business groups and their impact on corporate
governance in Pakistan for non-financial firms listed on the Karachi Stock Exchange of
Pakistan for 1998-2002. Their evidence indicates that investors view the business-group as a
mechanism to expropriate minority shareholders. On the other hand, the comparative
financial performance results suggest that business groups in Pakistan are efficient economic
arrangements that substitute for missing or inefficient outside institutions and markets. The
study by Ashraf and Ghani (2005) examines the origins, growth, and the development of
accounting practices and disclosures in Pakistan and the factors that influenced them. They
document that lack of investor protection (e.g., minority rights protection, insider trading
protection), judicial inefficiencies, and weak enforcement mechanisms are more critical
factors than are cultural factors in explaining the state of accounting in Pakistan. They
conclude that it is the enforcement mechanisms that are paramount in improving the quality
of accounting in developing economies.
The separation of CEO and chairman affects firms performance because the agency
problems are higher when the same person holds both positions. Yermack (1996) shows that
firms are more valuable, when the CEO and board chair positions are separated. Core, et al.
(1999) finds that CEO compensation is lower when the CEO and board chair positions are
separate. Brown and Caylor (2004) conclude that firms are more valuable when the CEO and
board chair positions are separate.
Mir and Nishat (2004) and Shaheen and Nishat have done rating of corporate
governance based on annual reports and survey data respectively for the year 2004 and relate
this governance score with firm value. Javid and Iqbal (2007) used panel data from annual
reports for 2003 to 2006 to measure factors of corporate governance. All these studies come
to the conclusion that better governance practices increase the value of the firm. The
International Financial Corporation (IFC), SECP and Institute of Corporate Governance,
Karachi undertook a survey to awareness the corporate governance for the year 2006.
There is an increasing interest in analyzing effect of corporate governance on stock
market in Pakistan but many issues in this area are uncovered. In particular, firm-level
corporate governance rating and its effect on the corporate valuation, corporate ownership
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and corporate financing are central issues of this area which needs in depth research. It is in
this perspective this study aims to make contribution in the literature on corporate
governance.

2.2 The Stakeholder Approach to Corporate Governance


According to stakeholder theory, companies should design their corporate strategies
considering the interests of their stakeholders groups and individuals who can affect or are
affected by the organizations purpose. In this sense, stakeholders of a firm can be defined as
individuals and constituencies that contribute, either voluntarily or involuntarily, to its
wealth-creating capacity and activities, and who are therefore its potential beneficiaries
and /or risk bearers. The company can pay attention to these groups for at least two reasons.
First, it can be considered that their demands have intrinsic value (normative approach), so
that the company has the responsibility to meet their legitimate claims. Second, addressing
the interests of stakeholders who are perceived to have influence can improve company
profitability (instrumental approach). Stakeholder theory is related to the literature of
corporate sustainability and CSR, since it provides a convincing theoretical framework for
analyzing the relationship between company and society. Some authors, like freeman and
Velamuri, even affirm that the main objective of CSR is to create value for stakeholders and
no fulfill responsibilities towards them.
With regard to corporate governance, stakeholder theory has led to an alternative
approach to the conventional shareholder-wealth-maximizing firm. Compared to the singular
goal of raising shareholder returns, the stakeholder firm has multiple objectives related with
its diverse stakeholders. The shareholder-maximizing model is premised on the nation that
owners risk their investment capital and are the sole residual claimants, while other parties
(e.g., employees) are compensated on the basis of their marginal products (i.e., paid wages
set by competitive labor markets). The governance process, therefore, is controlling
managers and other organizational participants to ensure that they act in the owners interests.
In contrast, one can argue that multiple firm stakeholders risk their investment to achieve
their goals, and thus each of them has a legitimate or moral right to claim a share of the value
created or the firms residual resources. Under this view, the governance structure shifts from
a principal agent to a team production problem, and the critical governance tasks become to
ensure effective negotiations, coordination, cooperation and conflict resolution to maximize
and distribute the joint gains among multiple parties of interest. For a stakeholder firm to be
viable over time, it must demonstrate its ability both to achieve the multiple objectives of the
different parties and to distribute the value created in ways that maintain their commitment.

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The key distinguishing features of the shareholder and stakeholder perspectives are
summarized following table.

Purpose
Governance
Structure
Governance
Process
Performanc
e metrics
Residual
risk holder

Shareholder perspective
Maximize shareholder wealth

Stakeholder perspective
Pursue multiple objectives
parties with different interests

of

Principal agent model (managers are Team production model


agents of shareholders)
Control
Coordination, cooperation and
conflict resolution
Shareholder value sufficient to Fair distribution of value created to
maintain investor commitment
maintain commitment of multiple
stakeholders
Shareholders
All Stakeholders
Table 2-1 (Stakeholders Perspective)

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

3 RESEARCH METHODLOGY
The methodology used includes search design, data sources and data analysis of the
research already being carried out, along with the experts opinion in light of government
policies and regulations for topic under consideration.

3.1 Focus of the problem


The main emphasis is to find out Good Governance Model for Distribution Companies
under PEPCO to improve their efficiency so that nation can get rid of load shedding and
access to affordable electricity for desired social and economic growth.

3.2 Research Design


The research study is based on descriptive, explanatory and hypothesis generating type
to access the impact of existing governance model and the weaknesses identified during
research are required to be further studied and consequently focus on the strategies and
methods to overcome the governance issue in distribution companies under PEPCO. The
direct causal relationships studied, with a qualitative research design as the issue cannot be
addressed by general public and ordinary data sources like; print media, therefore only
authentic reports and data is considered after careful analysis. The government rules and
regulations are of much importance in this case while purposing the new governance
structure to fulfill legal conditions.

3.3 Data Sources


The study is mainly based on the secondary source of literature that covers already
published thesis on Governance in different types of companies, in general and power
distribution sector in particular. The performance reports published by NEPRA and PEPCO
are sufficient sources to determine the impact of new governance model on the performance
of power distribution companies.
It may include secondary sources such as; Government Policies, Planning documents
and published & Unpublished Official Reports and Documents. The opinion of stake holders
(primary source) gather through interviews is also important to draw a fair conclusion.

3.4 Data Analysis

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

The data collected through various sources is classified, categorized and compared with
the government standards policies and regulations, and international performance of such
organizations in developed as well as underdeveloped countries. It is then further analyzed to
bring it in an understandable shape where important conclusions and aspects are highlighted.
The analyzed data is presented itself in form of recommendations that can be considered to
improve governance in distribution companies under PEPCO.

3.5 Data Collection Techniques


This research is based on historical performance data of distribution companies and
opinion of key stakeholder. The process of data collection involves two steps; First step is to
collect data from secondary sources such as; government agencies reports and record of
Distribution Companys secretariat. The second source is private institutions such as;
newspapers, websites and journals.
The second step is to collect information from different stakeholders by direct
interviews, phone calls and emails. The major source, which focused on in the senior
management of distribution companies, ministry of water and power and regulator (NEPRA).

3.6 Population and Sample


The population of this research is 10 number government owned power supply
companies headed by PEPCO. These entities are responsible for electricity supply in the
whole country except Karachi and are known as DISCOs. The same are listed below with
their area of responsibilities.
Company
PESCO

Area of Responsibilities
Whole Province of Khyber Pakhtunkhwa, except tribal areas.

TESCO

Mohmand, Khyber, Ourakzai, Kurrum, North Wazirstan, South Wazirstan,


agencies) and Frontier Regions (FRs) (i.e. FR Peshawar, FR Kohat, FR Bannu,
FR Lakhi, FR Tank and FR DI Khan
Federal Capital Islamabad and Rawalpindi, Attock, Jhelum, Chakwal (Districts
of Punjab).
Gujranwala, Sialkot, Mandi Bahauddin, Hafizabad, Narowal, Gujrat (Almost 7
districts of Punjab)
Lahore, Sheikhupura, Kasur, Okara, Nankana (Provincial Capital including 4
districts of Punjab).
Faisalabad, Sargodha, Khushab, Jhang, Toba Tek Singh, Bhalwal, Mianwali,
Bhakkar (8 western and central districts of Punjab)
Multan, Rahim Yar Khan, Khanewal, Sahiwal, Pakpattan, Vehari, Muzaffargarh,
Dera Ghazi Khan, Leiah, Rajan Pur, Bahawalpur, Lodhran, Bahawalnagar

IESCO
GEPCO
LESCO
FESCO
MEPCO

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

(Southern districts of Punjab).


HESCO
SEPCO

QESCO

Major areas of Sindh province except Karachi and areas under SEPCO.
Sukkur, Ghotki, Khairpur, Kashmore, Kandhkot, Jacobabad, Shikarpur,
Larkana, Kambar, Shahdadkot, Dadu and some portions of Jamshoro,
Naushehro Feroz, and Shaheed Benazirabad.
Whole Province of Balochistan except Lasbela which is being served by KElectric.

3.7 Tools of Data Collection


The information is gathered from different way i.e. from internet with use of search
engines, collection of published articles, reports and direct interview, phone calls and email.

3.8 Policy Implications


The research project is to be carried out in partial fulfillment of the requirements for the
degree of MBA-IT and does not involve any budget and stake from any sort of departments
or organizations within and outside Pakistan. Therefore, its outcomes will be considered for
literature purpose only but if recommended and approved by the authorized/ concerned
personnel(s) of university, submission of the document to the concerned and relevant policy
making department could be considered.

3.9 Limitation
i. Employees of the organization may hide the fact.
ii. The management did not agree to disclose all the confidential information.
iii. The population is very big which is spread across the company therefore physical
interview of targeted population is not possible even the given tin was also short.

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

4 Data Analysis
4.1 Data Processing and Analysis
The Primary and secondary data collected from different sources processed and
analyzed. Primary data was collected in the form of answers of different questions during
information gathering wide interview, phone calls and emails whereas the secondary data was
collected in the form of reports of different government institutes and search from internet.
All collected data analyzed and classified to draw conclusion as well as guidance for
developing a proposed governance model.
4.1.1 Primary Data

As mentioned earlier, the primary data collected through interviews, phone calls,
emails and in the shape of official communication is classified and processed for the use of
conclusions and report writing in coming chapters.
4.1.2 Secondary Data

The role of secondary data is very important and helpful for better understanding of the
research output. Therefore, the important one is reproduced in following paras.

4.2 SECP PSC (Corporate Governance) Rules 2013


4.2.1 Composition of Board

The Board shall consist of executive and non-executive directors, including


independent directors and those representing minority interests with the requisite range of
skills, competence, knowledge, experience and approach so that the Board as a group
includes core competencies and diversity considered relevant in the context of the Public
Sector Company's operations.
The Board shall have forty percent of its total members as independent directors within
the first two years of this' notification, which shall be raised to a majority of independent
directors in the next two years, and the majority shall be maintained subsequently. The Public
Sector Company shall disclose in the annual report Non-executive, Executive and
Independent directors.

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

No Independent Director shall participate in share options or any similar schemes of


the Public Sector Company which entitle him to acquire any interest in the Public Sector
Company.
Any casual vacancy in the Board shall be filled up by the directors at the earliest but
not later than ninety days thereof.
No person shall be elected or nominated as a director of more than five Public Sector
Companies and listed companies simultaneously, except their subsidiaries.
The Public Sector Company shall, where necessary, take necessary steps to ensure that the
minority shareholders, as a class, are facilitated by proxy solicitation, for which purpose the
Public Sector Company shall;
a. Annex with the notice issued under sub-section (4) of section 178 of
the Ordinance, a statement by a candidate from amongst the minority
shareholders who seek to contest election to the Board, and it may
include a profile of the candidate;
b. Provide information regarding shareholding structure and copies of the
register

of

members

to

the

candidates

representing

minority

shareholders; and
c. On a request by the candidates representing minority shareholders
and at the cost of the company, annex to the notice issued under sub
section (4) of section 178 of the Ordinance an additional copy of proxy
form duly filled in by such candidates.
The appointing authorities, including the Government and other shareholders, shall apply
the fit and proper criteria given in the Annexure in making nominations of the persons for
election as Board members under the provisions of the Ordinance.
4.2.2 Role of Chairman and CEO (Separation of two positions)

The office of the chairman shall be separate, and 'his responsibilities distinct, from
those of the chief executive.

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

4.2.2.1 The chairman of the Board

a. Ensure that the Board is properly working and all matters relevant to the governance of
the Public Sector Company are placed on the agenda of Board meetings;
b. Conduct the Board meeting including fixing the agenda; and
c. Ensure that all the directors are enabled and encouraged to fully participate in the
deliberations and decisions of the Board. The chairman has a responsibility to lead the
Board and ensure its effective functioning and continuous development, he shall not be
involved in day to day Operations of the Public Sector Company.
The chief executive is responsible for the management of the Public Sector Company and
for its procedures in financial and other matters, subject to the oversight and directions of the
Board, in accordance with the Ordinance. His responsibilities include implementation of
strategies and policies approved by the Board, making appropriate arrangements to ensure
that funds and resources are properly safeguarded and are used economically, efficiently and
effectively and in accordance with all statutory obligations.
The Board shall elect its chairman from among the independent directors so as to achieve
an appropriate balance of power, increasing accountability, and improving the Boards
capacity for exercising independent judgment.
4.2.3 Responsibilities, Powers and Functions of the Board

The Board shall exercise its powers and carry out its fiduciary duties with a sense of
objective judgment and independence in the best interest of the company. This provision
shall apply to all directors, including ex-officio directors. A director, once appointed or
elected, shall hold office for a period of three years, unless he resigns or is removed in
accordance with the provisions of the Ordinance.
The Board shall evaluate the candidates based on the fit and proper criteria and the
guidelines specified by the Commission for appointment to the position of the chief
executive, and recommend at least three individuals to the Government for appointment as
chief executive of the Public Sector Company.
The Board shall ensure that professional standards and corporate values are in place that
promotes integrity for the Board, senior management and other employees in the form of a
"Code of Conduct". The code of conduct shall articulate acceptable and unacceptable
behaviors.

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

The Board shall establish a system of sound internal control, which shall be effectively
implemented at all levels within the Public Sector Company, to ensure compliance with the
fundamental principles of probity and propriety; objectivity,
The Board shall adopt a vision or mission statement and corporate strategy for the Public
Sector Company.
The Board shall also formulate significant policies of the Public Sector Company, which
may include the following, namely;
a. The formal approval and adoption of the annual report of the Public Sector Company,
including the financial statements;
b. The implementation of an effective communication

policy with all the stakeholders

of the Public Sector Company;


c. The identification and monitoring of the principal risks and opportunities of the Public
Sector Company and ensuring that appropriate systems are in place to manage these risks
and opportunities, including. Safeguarding the public reputation of the Public Sector
Company;
d. Procurement of goods and services so as to enhance transparency in procurement
transactions;
Marketing of goods to be sold or services to be rendered by the Public Sector Company;
Determination of terms of credit and discount to customers;
Write-off of bad or doubtful debts, advances and receivable
Acquisition or disposal of fixed assets and investments;
Borrowing of moneys up to a specified limit, exceeding which the amounts shall be

e.
f.
g.
h.
i.

sanctioned or ratified by a general meeting of shareholders;


j. Corporate social responsibility initiatives including, donations, charities, contributions
k.
l.
m.
n.
o.
p.
q.

and other payments of a similar nature;


Determination and delegation of financial powers to Executives and employees;
Transactions or contracts with associated companies and related parties;
Health, safety and environment;
Development of whistle-blowing policy and protection mechanism;
Capital expenditure planning and control;
Protection of public interests; and
Human resource policy including succession planning.

4.2.4 Performance Evaluation

The performance evaluation of the members of the Board including the chairman and the
chief executive shall be undertaken for which the Board shall establish a process, based on

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

specified criteria, and the chairman of the Board shall take ownership of such an evaluation.
The committees shall also carry out their evaluation on an annual basis:
4.2.5 Board Committees

a.
b.
c.
d.
e.

Audit committee.
Risk management committee.
Human resources committee.
Procurement committee.
Nomination committee.

4.2.6 Directors Remuneration

There shall be a formal and transparent procedure for fixing the remuneration packages
of individual directors. No director shall be involved in deciding his own remuneration.
Directors' remuneration packages shall encourage value creation within the company,
and shall align their interests with those of the company. These shall be subject to prior
approval of shareholders or Board as required by company's Articles of Association. Levels
of remuneration shall be sufficient to attract" and retain the directors needed to run the
company successfully.
Subject to the provisions of the company's Articles of Association, the shareholders or
Board shall determine the scale of remuneration for non-executive directors. However, it
shall not be at a level that could be perceived to compromise their independence.
The Public Sector Company's annual report shall contain criteria and details of the
remuneration of each director, including salary, benefits and performance linked incentives.

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

4.3 IESCO BoD Historical Data


4.3.1 IESCO Board of Directors (1999)

Mr. Muhammad Younis Khan

Chairman /CEO

Mr. Inayat Ullah

Director

Mr. Mansoor Ali Sheikh

Director

Mr. Muhammad Rafique

Director

Ch. Muhammad Akbar

Director

Mr. Abdul Wakil Khan Afridi

Director

Mr. Naeem Uddin Qazi

Director

Mr. Abdul Raheem Masud

Director

Mr. Habib Ullah Khan

Director

* No Private Director
Table 4-2 (IESCO BoD, 1999)
4.3.2 IESCO Board of Directors (2005)

1
2
3
4
5
6
7
*4x

Mr. Habibullah Beg


Chairman
Brig Shahbaz Azam
CEO
Mr. M. Amjad
Director
S.S Taveer Hussain
Director
Mr. Salman Iqbal
Director
Mr. Mukhtar H. Jaffery
Director
Mr. Mohsin Khalid
Director
Public and 3 x Private
Table 4-3 (IESCO BoD, 2005)

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

4.3.3 IESCO Board of Directors (2011)

1
2
3
4
5
6
7
8
9
10
11
12
*5x

Mr. Mohsin Khalid


Mr. Javed Pervaiz (CEO)
Additional Secretary (M&P)
Sec. Pvt. Commission
Chairman Flood Commission
Rector NUST
Mr. Tariq Sadiq
President of CCI Rwp
President of CCI Isb
Mr. Khalid Qureshi
Dr. Sania Nishtar
Mr. Farid-ur-Rehman
Public and 7 x Private
Table 4-4 (IESCO BoD, 2011)

Chairman
CEO
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director

4.3.4 IESCO Board of Directors (2013)

1
2
3
4
5
6
7
8
9
10
*3x

Mr. Ghiasuddin Ahmed


Malik Muhammad Yousaf Awan
Mr. Noor Ahmed
Syed Tanwir Husain Bukhari
Mr. Naeem Iqbal
Mr. Tariq Sadiq
Prof. Dr. Saeeda Asadullah Khan
Syed Hyder Sarfraz Abedi
Mr. Ali Murtaza
Mr. Shahbaz Yar Khan
Public and 7 x Private
Table 4-5 (IESCO BoD, 2013)

Chairman
CEO
Director
Director
Director
Director
Director
Director
Director
Director

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

4.3.5 IESCO BoDs - Composition

Year

Govt.

Private

Total

1999

09

09

2005

04

03

07

2011

05

07

12

2013

03

07

10

Table 4-6 (IESCO BoD, Composition)

4.4 Performance of Distribution Companies


The corporate governance introduced in power sector to improve performance but the
objectives could not achieve even after one and half decade. The issue of load shedding, circular
debt, affordable tariff and customers services could not have resolved due inefficiencies like
theft of electricity, low recovery percentage, increase in receivables and low customers
satisfaction. The performance of DISCOs for last five years (ten years after introduction
corporate governance) is placed below which is evident that there is no significant improvement.
The receivables are increased at very high rate and the receivables at the end of June 2016 are
Rs. 684 Billion.

Percentage Line Losses in Power Distribution System


FY: 2010-11 to 2015-16
%age Line Losses
Financial Years

NTDC

DISCOs

2010-11

3.0

18.3

Total
System
20.8

2011-12

2.8

18.2

20.5

2012-13

3.1

17.6

20.1

2013-14

2.5

17.5

19.6

2014-15

2.7

17.7

19.9

2015-16

2.6
17.0
Table 4-7 (Line-losses Data)

19.2

Percentage Collection /Recovery (All DISCOs)


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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

FY: 2010-11 to 2015-16


Financial Year

%age Recovery

2010-11

89

2011-12

86

2012-13

93.7

2013-14

89.7

2014-15

88.2

2015-16
94.5
Table 4-8 (Collection / Recovery)

Receivable (All DISCOs)

June-2012

Receivable (Rs.
In Billion)
386

June-2013

411

June-2014

512

June-2015

633

Months

June-2016
684
Table 4-9 (Receivables)

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

4.5 Findings / Data Analysis Outcomes


The data analysis shows that impact of new governance is not visible in terms of
performance, rather it negatively impacted the overall power sector efficiency in terms of
high line loses, low recoveries, decreased customer satisfaction, high magnitude of circular
debt, unaffordable Tariff and unbearable load-shedding. The following reasons of this bad
governance has been identified.
4.5.1

4.5.2

4.5.3

4.5.4

4.5.5

4.5.6

4.5.7

Private Sector Directors are not stakeholders; they are nominated by


GoP on political /social links. These nominated directors do not invest
even a single penny and performance of company does not impact
over their financial position, therefore they do not act like a
shareholder /real stakeholder.
Lack of competence of Private Sector Directors (relevant experience).
a) FESCO Chairman BOD a cable operator/Political office bearer too.
b) IESCO Chairman BOD owner of a furnace, only graduate (< 45year).
c) QESCO Chairman BOD a land lord, not aware of even social
norms.
There are no pre-requisite criteria defined for this selection w.e.t
professional education and experience and due to lack of knowledge
some time very unreasonable observations are passed which effect in
time and correct decision.
Political affiliation/Links of Private Sector Directors. Due to political
links the decisions are not taken on technical /commercial grounds
therefore merit is ignored which effects the efficiency and profitability.
Lake of Accountability (especially of political nominees). The lack of
accountability at national level also provides holiday to these decision
makers. The audit system is not appropriate and it makes only the
management accountable.
Conflict of interest of Private Sector Directors. There are many
examples that the directors having their businesses /interests. The
jurisdiction of relevant company effects, technical commercial
decisions like construction of Grid Station or Power Transmission Lines
for company financial resources.
Interference in day to day work (Micro Management), by Chairman
BOD. Due to lack of knowledge of rule and regulations the Chairman
BoD consider himself Chairman of Company and interfere in
management role.
The experience and professional knowledge of DISCOs/GENCOs/NTDC
top management is very rich as compare to the majority of

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

4.5.8

4.5.9
4.5.10

4.5.11

4.5.12

4.5.13
4.5.14

Independent Directors, which created serious personality conflict, in


response of ire-realistic/illegal directions of BOD member(s).
High turn-over of Public Sector Directors due to retirements/transfers.
The public sector directors are appointed on the basis of their current
responsibilities (by designation) and the routine transfer posting
cause their exit from BoD. Due to short tenure their contribution is
very less.
After 2010 Private. Sector Directors gained Majority and dominated
over Public Sector Directors and situation went worst.
After erosion the PEPCO role, BODs got full authority and miss-used it.
Being the ultimate authority having full powers but less experience
and specific interests these powers are misused.
Non seriousness of Independent/Non-Executive Directors. Instead of
providing
Corporate
Governance
they
remained
busy
in
posting/transfers and protection of their vested interests, causing
shortage of material (Meters, Cable, and Transformers etc.) and
pendency in vital operational / strategic decisions.
In some case, size of BOD was very big (FESCO 21-members 02/2013,
one member 22-years old), instead of providing multi-dimensional
experience, the BOD divided in to groups, as well as wastage of time
during meetings with undue discussions/conflicts, even some times
meeting concluded without decisions.
Majority of private /independent directors are inexperience as well as
less having education managerial /technical, resultantly lack of vision.
The management is facing difficulties to get approval of innovative
and latest technology based projects.

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

5 CONCLUSION
Based on the research carried out, I derived the following conclusion.
5.1

GoP has been failed to appoint BODs of DISCOs, GENCOs & NTDC on merit. By the
analysis of BoD members profiles (experience and education) and bad performance in
the shape high line losses less recoveries causing excessive load shedding and increase
circular debts shows that the BoD appointments are not make on merits, and new
governance model is failed to improve the efficiency of DISCOs.

5.2

While Constituting BODs principals of corporate governance and recommendations of


Task Force/Committees has not been considered and appointments made purely on
political links. Even BODs appointed in 2013 are not according to SECP PSC
(Corporate Governance) Rule 2013.

5.3

BODs of almost all DISCOs, GENCOs & NTDC failed to provide required Corporate
Governance, due to reasons mentioned in previous chapters.

5.4

The Composition of BODs mentioned in SECP PSC (Corporate Governance) Rules


2013 is not suitable for govt. owned Power Sector Entities, in the light of factor
highlighted in previous chapters. (Stake, experience education political affiliation and
lack of check and balance etc.)

5.5

There is a dire need to reconstitute these BODs keeping in view the lesson learnt during
last 15-years in Pakistan, as well as from reports/analysis which are available regarding
many nations a large no of Nations, prepared by different Agencies/ Institutes/ Donors
and individual professionals.

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

6 RECOMMENDATIONS
After thorough study of existing system and identifying the weakness in governance with
respect to composition, selection criteria, size and stake; following governance model is
purposed for government owned power distribution companies until its privatization.
6.1

Number of directors equal to seven (as per minimum requirement of Company

6.2
6.3

Ordinance 1984).
3 x Executive Directors, CEO, FD, TD/OD (3-Year tenure).
2 x Non-Executive Directors (from Ministry of Water & Power and Ministry of

6.4

Finance).
2 X Independent directors - Retired Power Sector professional (WAPDA/PEPCO/

6.5
6.6
6.7
6.8
6.9

DISCOs)/Retired bureaucrat (Finance, Administration, Law).


Chairman should be from independent director.
The Head of Audit Committee should be from Independent/Non-Exec. Director.
Tenure based appointments of BODs/CEO. (3-Years)
The independent director should be paid a reasonable financial package.
The selection of independent director according to pre-determined selection criteria
and by an independent Selection Body, conflict of interest should also be taken in

6.10

care.
PEPCO should be strengthen and be given role of Performance Monitoring (on KPI)

6.11

and implementation of Govt. policies (uniformly), till Privatization


NEPRA should be strengthened technically as well as legally. It should also be re-

6.12
6.13

structured by separating Authority and Executive.


Ministry of W&P should restrict itself to policy making.
SECP may revise Public Sector Companies (Corporate Governance) Rule 2013
according to these recommendations.

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO

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Impact of New Governance Model on Performance of Distribution Companies Under PEPCO