Corporate governance in Pakistan: beyond a minimalist approach

A thesis submitted to the University of Bedfordshire in partial fulfilment of the requirements for the degree of Doctor of PhilosophyThe issue of corporate governance (CG) has taken central position in debates after the major financial crisis in almost all parts of the world. Numerous endeavours have been made to improve CG in Pakistan. However, these efforts did not produce the required results. Moreover, the existing literature fails to establish the impact of these efforts and CG norms on the performance of listed companies in Pakistan. Therefore, this study intends to investigate the CG framework of Pakistan, identify its weaknesses and explore opportunities for its improvement. For this purpose, the four variables of CG amongst others have been selected which include: the investigation of Code of Corporate Governance (CCG) of Pakistan (law in books), enforcement mechanisms in relation to the implementation of CG standards (law in action), the role of board of directors (BODs) and the role of institutional investors (IIs) in enhancing the companies’ performance and improving the CG practices. This study is conducted by employing a socio-legal research methodology due to its mixed nature of being legal and corporate. A qualitative research method is utilised by employing an inductive approach, interpretative research philosophy and exploratory strategy. The results of this study declare important for regulators to update CCG regularly by assessing its impact on companies’ performance and evaluating the attitude of companies towards the full and partial adoption of CCG. This practice will increase compliance with CCG. Moreover, this thesis develops a ‘Board Effectiveness Model’ in order to make BODs diverse and independent. Furthermore, this thesis explores strategies to enhance the part of IIs in the CG of their investee companies. The researcher believes that the recommendations proposed by this thesis, if implemented, could make considerable improvement in the corporate sector of Pakistan which will enhance investor confidence and will also attract foreign investment