A new Code of Conduct has been enforced for the Board of Management of Pakistan State Oil (PSO) under the State-owned Enterprises (Governance and Operations) Act of 2023, primarily to combat corruption, prohibit the acceptance of gifts, and ensure the protection of sensitive information from unauthorized disclosure.
Senior bureaucrats, including Prime Minister’s Principal Secretary Asad Gilani, Awais Manzur Sumra, Member, BOM, currently working as Secretary Planning, Ministry of Planning, Development and Special Initiatives, Hassan Mehmood Yousufzai, currently working as Additional Secretary, Petroleum Division, Member, BOM, Shahbaz Tahir Nadeem, Member, BOM is currently serving as Joint Secretary (Investments/JVs/Development) in the Petroleum Division, and other members of the Board of Management (BOM) have been bound by strict terms, requiring their signatures on the code.
However, as discussed by Sohail Iqbal Bhatti, Anchor, in a private TV’s current affair’s Program titled as Red Zone, in cases of violation of these terms by any board member, actions will be taken through the FIA or NAB, as the Code of Conduct remains silent on how to handle these breaches internally.
As per new Code of Conduct for BOM of PSO, the purpose of this Code of Conduct is to establish standards of ethical behaviour and professional integrity for the Board of Management of Pakistan State Oil Company Limited. It aims to promote transparency, accountability, and good governance, ensuring that the Board Members act in the best interest of the company and its stakeholders.
Scope of New Code of Conduct
This Code applies to members of the Board of Management of the company. It is intended to guide their conduct in fulfilling their duties and responsibilities as outlined in the Marketing of Petroleum Products (Federal Control) Act, 1974, the State-Owned Enterprises (Governance and Operations) Act, 2023, and other relevant laws.
Salient Features of the New Code of Conduct
The Code implies as follows:
Integrity and Honesty
Board Members must act honestly and fairly, exhibiting high ethical standards in all dealings with the company’s stakeholders. They should avoid situations where their personal interests may conflict with the interests of the company.
Confidentiality
Board Members must maintain the confidentiality of non-public information obtained through their positions and shall not disclose confidential information, including commercial secrets, financials, technologies, advertising and promotion plans for personal gains, unless such disclosure is expressly approved by the Board of the company or required by law. Accordingly;
i. Protecting Confidential Information: No Board Member shall disclose Confidential Information outside the company, either during or after his/ her service as a Board Member of the company, except with authorization of the Board of Management or as may be otherwise required by law.
ii. Confidential Information not to be used for Personal Benefit: No Board Member shall use Confidential Information for his/ her personal benefit or to benefit of his/ her immediate family member or persons or entities outside the company; and
iii. Handling Inside Information: A Board Member must abide by the requirements prescribed under Part X of the Securities Act, 2015 (section 127 to 131) when handling ‘Inside Information’ that may come in his/her possession.
If a Board Member has inside information about the company, its associated or subsidiary undertaking(s), the Board Member must not deal, execute or recommend transactions in any securities of the company, its associated or subsidiary undertaking(s) personally, through family or on behalf of anyone.
A Board Member must not procure, influence or counsel any person or company to recommend, deal or execute transactions in securities of the company, its associated or subsidiary undertaking(s), about which the Board Member has inside information.
Compliance with Laws, Rules and Regulations
Board Members shall comply with laws, rules and regulations applicable to the company including but not limited to the Marketing of Petroleum Products (Federal Control) Act, 1974, the State-Owned Enterprises (Governance and Operations) Act, 2023, the Companies Act 2017, Listing Regulations of the Pakistan Stock Exchange Limited, Public Sector Companies (Corporate Governance) Rules 2013 (where applicable), Listed Companies (Code of Corporate Governance) Regulations 2019, and the Securities Act 2015.
Fairness and Equity
Board Members shall treat all stakeholders, including shareholders, employees, and the public, fairly and equitably. They should not engage in any discriminatory practices.
Accountability and Responsibility
Board Members are accountable for their decisions and actions. They should act responsibly and in a manner that reflects the company commitment to high standards of corporate governance.
Transparency and Disclosure
Board Members must ensure that the company maintains transparency in its operations and financial reporting. They should oversee the preparation and disclosure of accurate and timely information to shareholders and the public.
Conflict of Interest
Board Members must avoid conflicts of interest and disclose any potential conflicts to the Board. They should not participate in discussions or decisions where they have a personal or financial
interest.
i. Loans or guarantees: Board Members shall not receive loans or guarantees of obligations as a result of his/her position as a Board Member.
ii. Use of Company Assets: Board Members are entrusted with the responsibility of ensuring that the company’s assets and resources are used effectively and for their intended purposes. They must avoid using these assets for personal gain or use and ensure that they are applied for the benefit of the company, maintaining efficiency and transparency. This includes adhering to the standards for the use of company property, such as phones, vehicles, and other resources.
iii. Relationship of Company with third parties. Board Members shall not engage in any conduct or activities that are inconsistent with the company’s best interests or that disrupt or impair the company’s relationship with any person or entity with which the company has or proposes to enter into a business or contractual relationship.
Compensation from non-company sources.
Board Members shall not accept compensation (in any form) for services performed for the company from any source other than the company.
Corporate Opportunities
Board Members are prohibited from:
i. Taking for themselves personally, opportunities related to the company’s business;
ii. Using the company’s property, information or position for personal gain; or
iii. Competing with the company for business opportunities.
Independence
Board Members must maintain independence in judgement and avoid undue influence from any external parties, including political and business interests.
Professionalism and Competence
Board Members should continuously develop their skills and knowledge relevant to their duties. They must exercise their duties with the care, diligence, and skill expected of them.
Monitoring and Evaluation
Board Members are responsible for monitoring the performance of the company and its management. They should ensure that adequate systems of internal control are in place and that any shortcomings are promptly addressed.
Corruption
Board Members reject corruption in all forms – direct, indirect, public, or private and do not directly or indirectly engage in bribery, kick-backs, payoffs, or any other corrupt business
practices. No Board Member shall accept any funds, loans, favours, or other assets (including those provided as preferential treatment) to obtain business from the company or that might tend to influence a Board Member’s decisions.
Gifts
Board Members and members of their families may not accept a gift from persons or entities who deal with the company in those cases where the gift:
(a) Would be illegal or result in a violation of law;
(b) Is part of an agreement to do anything in return for the gift;
(c) Is made to influence the Director’s actions as a member of the Board; or
(d) Could create the appearance of a conflict of interest.
Encouraging Reporting of Possible Illegal or Unethical Behaviour
i. Board Members should ensure that the company actively promotes ethical behaviour and encourages employees to consult with supervisors, managers, or other appropriatepersonnel when uncertain about the proper course of action in specific situations.
ii. Employees should be encouraged to report any violations of laws, rules, regulations, company policies, procedures, or the code of conduct to the appropriate authorities. They should also be assured that the company will not tolerate any retaliation against individuals who make such reports in good faith.
iii. Board Members should disclose any suspected violations of this Code promptly in the immediately subsequent meeting of the Board of Management. Violations will be investigated by the Board or by a person or persons designated by the Board, and appropriate action will be taken in the event of any violations of the Code.
Trading in Company Shares
Certain restrictions / reporting requirements apply to trading by the Board Members in company shares as per Listing Regulations of Pakistan Stock Exchange Limited and the Securities Act, 2015.
Board Members must adhere to all relevant laws and rules when trading in shares. They should refrain from engaging in insider trading or any activities that could be perceived as unfair or manipulative. It is mandatory for Board Members to disclose their shareholdings and any changes thereto, in accordance with the regulatory requirements.
