State-Owned Enterprises (SOEs) in Pakistan function at the intersection of commercial objectives and public service obligations. While they play a critical role in the national economy, SOEs face distinct governance challenges that can impede performance and create fiscal liabilities. Navigating this complex environment—defined by a dual mandate and evolving regulatory frameworks—requires a disciplined and strategic approach to governance. Our services are designed to assist SOEs in transforming from potential liabilities into strategic assets, ensuring enhanced operational efficiency, transparency, and accountability while safeguarding long-term value for all stakeholders.
State-Owned Enterprises in Pakistan face systemic challenges that can hinder their ability to operate efficiently, compete effectively, and deliver sustainable outcomes. Key issues include:
Political and Administrative Interference
A significant challenge is the blurred distinction between the state’s roles as owner and regulator. This often results in political interference in management and operations, undermining the autonomy and effectiveness of boards and executive leadership.
Weak Board Governance
Many SOE boards lack sufficient independence, expertise, or authority to provide robust strategic guidance and oversight. The State-Owned Enterprises (Governance and Operations) Act, 2022, aims to address these gaps by promoting professionalized board appointments and mandating the inclusion of independent directors.
Financial and Operational Inefficiencies
Operational inefficiencies, overstaffing, and a lack of commercial discipline contribute to recurring financial losses in numerous SOEs. This dependence on government subsidies imposes a significant burden on the national exchequer.
Divergent Mandates
SOEs often operate under dual mandates, balancing commercial objectives with public service obligations (PSOs). Ambiguity in prioritizing these mandates can result in unclear strategic direction, inconsistent performance, and accountability challenges.
We provide specialized governance solutions designed to help State-Owned Enterprises navigate their unique challenges, transforming governance from a compliance obligation into a strategic advantage.
Governance Audits and Compliance
We conduct comprehensive audits to assess compliance with the State-Owned Enterprises (Governance and Operations) Act, 2022, and other relevant regulations. Based on our findings, we help implement robust frameworks that ensure ongoing compliance, transparency, and accountability.
Board Effectiveness and Advisory
We provide guidance on board composition, ensuring the inclusion of independent and expert directors to strengthen oversight. Our services include board evaluations, clarifying the roles and responsibilities of the board and its sub-committees, and providing strategic advisory to enhance governance effectiveness.
Strategic Planning and Performance Management
We assist in developing actionable strategic plans that balance commercial objectives with public service obligations. Additionally, we implement performance management systems that hold boards and senior management accountable for measurable outcomes, fostering operational excellence and strategic alignment.
Privatization and Restructuring Readiness
As Pakistan advances its privatization initiatives, we support SOEs in preparing for potential ownership transitions. Our services encompass reviewing internal controls, improving financial reporting, and enhancing operational efficiency to attract private sector investment and facilitate a seamless transition.