Page 72 - CMA Journal (Jul-Aug 2026)

A r t ic les S ec t ion

Strong governance, transparency and accountability action, whereas timely reporting can strengthen At the same time, inadequate disclosure can management and stakeholder engagement as key
are therefore essential to improve SOE performance, oversight and stakeholder con dence (World Bank, undermine stakeholder con dence and public trust. principles of e ective SOE governance. Countries such Table 3: International Best Practices & Relevant to Pakistan
strengthen investor con dence and support scal 2023). The table below highlights how key Strengthening transparency, independent oversight, as Singapore, Sweden and New Zealand have adopted International Practices Country Example Relevant to Pakistan
sustainability and long-term economic growth. transparency de ciencies can a ect nancial internal controls and performance monitoring is approaches that balance commercial objectives with

performance and public trust. Consequently, therefore essential to improve nancial sustainability, public accountability, supported by strong Independent SOE Board Singapore Improved Governance Oversight
Transparency and Financial Governance improving transparency is critical to strengthening accountability and public con dence in Pakistan’s SOE performance monitoring, independent boards and Performance Based
Financial governance and transparency are essential SOE governance, reducing scal risks and ensuring the sector. e ective disclosure practices. Management New Zealand Enhanced Accountability
for e ective public-sector management, e cient use of public resources. Common features of these models include robust risk Comprehensive Disclosure Sweden Greater Transparency

Introduction Understanding accountability and the responsible use of public Recent SOE Reforms in Pakistan management, transparent performance evaluation,

In Pakistan’s public sector, State-Owned Enterprises State-Owned resources. Financial governance provides the Transparency Challenges in Pakistani The Government of Pakistan has introduced reforms to independent oversight and comprehensive disclosure. Integrated Reporting United Kingdom Better Stakeholder

SOEs and Their Impact
(SOEs) play a crucial strategic role in sectors such as Enterprises in structures, rules and procedures through which SOEs strengthen governance, transparency and Increasingly, digital tools such as real-time Communication
energy, transportation, aviation, infrastructure, Pakistan are directed, monitored and held accountable for their Many State-Owned Enterprises (SOEs) in Pakistan accountability in SOEs. A key development is the performance monitoring and online reporting Digital Governance System Estonia Improved Accessibility and
banking and telecommunications. These organizations performance and resource management. continue to face governance and transparency State-Owned Enterprises (Governance and platforms are also being used to enhance Monitoring
are instrumental in promoting national development State - Owned Enterprises Transparency complements these mechanisms by challenges, including delayed nancial reporting, Operations) Act, 2023, which provides a framework for transparency. Adapting these practices to Pakistan’s
goals, fostering economic growth and delivering (SOEs) are government ensuring that relevant and reliable information is weak institutional frameworks, political in uence and improving disclosure, board e ectiveness, institutional context could strengthen SOE Source: Compiled by Author based on published studies and institutional guidelines.
essential public services. Unlike private-sector -owned or controlled available to stakeholders, enabling them to assess inadequate monitoring mechanisms. Delays in accountability and performance management. The Act governance, improve stakeholder con dence and Through data-driven decision-making, nancial Recent reforms, particularly the State-Owned
businesses, SOEs are responsible for managing public entities that operate in organizational performance, governance practices and publishing audited nancial statements and also promotes merit-based board appointments and support sustainable performance. discipline and performance-oriented management, Enterprises (Governance and Operations) Act, 2023,
resources while balancing socioeconomic obligations strategic sectors such as the use of public funds. Greater transparency can performance reports limit e ective oversight and stronger strategic monitoring and performance they can serve as change agents and contribute to provide a foundation for strengthening SOE
with commercial viability. Consequently, their energy, banking, reduce information asymmetry, strengthen informed decision-making, while weak internal evaluation. Role of Management Accountants in more accountable, transparent and e cient SOEs in governance. However, e ective implementation,
governance and performance have a direct impact on infr astruc tur e , accountability, improve decision-making and enhance controls and risk management increase exposure to The Ministry of Finance has further strengthened SOE Enhancing SOE Transparency Pakistan. institutional capacity and continuous oversight remain
public service delivery, economic sustainability and transportation and public trust (IFAC, 2023). reporting through annual and biannual reports Management accountants play an important role in essential. Management accountants can also play a
citizen trust. Transparency has therefore emerged as a telecommunications. In covering scal risks, operational e ciency and strengthening nancial governance and transparency Recommendations critical role through their expertise in performance
Pakistan, SOEs manage
key component of e ective public-sector governance. signi cant public assets nancial performance. These measures aim to improve in SOEs. Beyond budgeting and cost control, they A number of management and policy initiatives should management, risk management, strategic planning
The timely, accurate and comprehensive disclosure of and play an important role in delivering essential public access to information, support evidence-based support performance management through strategic be considered to improve nancial governance and and governance reporting. By strengthening
information enables stakeholders to assess services, supporting economic activity and advancing policymaking and strengthen institutional budgeting, balanced scorecards, variance analysis and transparency within Pakistan’s SOEs. First, disclosure governance frameworks, improving disclosure,
organizational performance, governance practices and national development objectives. Government accountability and scal management. However, key performance indicators (KPIs). They also requirements should be strengthened to ensure that adopting digital tools and promoting accountability,
the management of public resources. The Organization ownership is particularly important in sectors e ective implementation, continuous oversight and strengthen risk management and internal controls by audited nancial statements and performance reports Pakistan can build more transparent, nancially
for Economic Co-operation and Development (OECD, involving strategic interests, essential services and stronger institutional capacity remain essential for identifying risks, evaluating controls and supporting are published on time. Second, governance sustainable and e ective SOEs that contribute to
2024) highlights that greater transparency can reduce natural monopolies (World Bank, 2023). these reforms to deliver sustainable improvements in compliance, thereby improving the reliability of frameworks should prioritize board independence and public welfare and national development.
information asymmetry between management and SOE governance and performance. nancial and operational information. professional competence through transparent,
stakeholders, foster accountability, increase public However, public ownership also presents governance merit-based recruitment procedures. Third, SOEs References
trust and enhance decision-making. Similarly, the challenges, including political interference, International Best Practices Management accountants further contribute to should strengthen enterprise risk management and • Government of Pakistan. (2023). State-Owned Enterprises (Governance
operational ine ciencies, nancial losses and weak
World Bank (2023) emphasizes that transparent accountability. These issues have often resulted in International experience shows that strong integrated reporting by linking nancial and internal control mechanisms to enhance and Operations) Act, 2023. Islamabad: Government of Pakistan.
institutions are better positioned to manage risks, government nancial support, placing additional governance and transparency frameworks can non- nancial performance measures, enabling accountability and protect public resources. • Government of Pakistan, Ministry of Finance. (2024). Annual Report on
Federal StateOwned Enterprises FY 2024. Islamabad: Ministry of Finance.
improve productivity and generate long-term value. pressure on public resources. Strong governance improve SOE performance. The OECD emphasizes stakeholders to better assess organizational Digital reporting platforms should also be developed • Government of Pakistan, Ministry of Finance. (2024). Bi-Annual Report on
Federal StateOwned Enterprises. Islamabad: Ministry of Finance.
The importance of transparency has become even structures, transparent reporting and e ective transparency, accountability, board independence, risk performance and sustainability. to facilitate stakeholder engagement and public • International Federation of Accountants (IFAC). (2023). International
more pronounced due to the persistent challenges performance management are therefore essential to access to information. Performance-based Framework: Good Governance in the Public Sector. New York: IFAC.
confronting several SOEs in Pakistan, including improve the e ciency, accountability and accountability systems should be established to • International Monetary Fund (IMF). (2023). Pakistan: Selected Issues and
operational ine ciencies, nancial losses, governance sustainability of Pakistan’s SOE sector (Ministry of ensure that boards and management are assessed Public Financial Management Reforms. Washington, DC: International
Monetary Fund.
weaknesses and growing scal obligations. These Finance, 2024). against well-de ned objectives and measurable • Organization for Economic Co-operation and Development (OECD).
challenges have increased calls for reforms aimed at Economic Signi cance of SOEs in results. Finally, management accountants should be (2024). OECD Guidelines on Corporate Governance of State-Owned
strengthening accountability, improving disclosure empowered to take on strategic roles in organizational Enterprises. Paris: OECD Publishing.
practices and enhancing monitoring mechanisms (IMF, Pakistan decision-making, performance management and • United Nations Department of Economic and Social A airs (UNDESA).
(2023). Principles of Public Administration and Transparency. New York:
2023). In response, the Government of Pakistan has SOEs have a signi cant impact on Pakistan’s economy For SOEs, transparency extends beyond conventional operational ine ciencies, nancial irregularities and governance. United Nations.
introduced various governance reforms, including the through their contribution to employment, nancial reporting to include board composition, governance failures (Ministry of Finance, 2024; IFAC, • World Bank. (2023). Enhancing Governance and Accountability in
State-Owned Enterprises. Washington, DC: World Bank.
State-Owned Enterprises (Governance and infrastructure development, energy security, executive responsibilities, strategic objectives, risk 2023). Political in uence in board appointments and The Way Forward and Conclusion • World Bank. (2024). Public Sector Governance and Accountability
Operations) Act, 2023, which seeks to strengthen transportation and public service delivery. Federal management practices, operational performance and strategic decisions can further weaken accountability Transparency is essential to e ective public-sector Frameworks in Developing Economies. Washington, DC: World Bank.
governance standards and performance monitoring SOEs manage assets and liabilities worth trillions of sustainability activities. The OECD Guidelines on and performance monitoring (OECD, 2024). governance and serves as a key driver of
across federal SOEs. Against this backdrop, this article rupees and play an important role in advancing Corporate Governance of State-Owned Enterprises accountability, e ciency and sustainable value About the Authors: Imtiaz Bashir, a Fellow Member of ICMA
examines the signi cance of transparency in Pakistan’s national development objectives. However, poorly emphasize timely, reliable and comprehensive These weaknesses also create signi cant nancial and creation in Pakistan’s SOEs. The analysis highlights that International, serves as a Senior Instructor at Govt. College of
SOEs, highlights key governance challenges, reviews managed SOEs can generate substantial scal disclosure to support e ective oversight (OECD, 2024). scal risks. Poorly managed SOEs may incur continued weak transparency can worsen nancial performance, Commerce, Qasimpur Colony, Multan. With over 20 years of
experience in management accounting, corporate finance, and
recent reform initiatives and international best pressures through nancial losses, growing debt and This is particularly important for Pakistan’s SOEs, which losses, higher operating costs and greater reliance on increase scal risks and undermine public con dence, business taxation, he has taught at various public and private
practices, and discusses the strategic role of reliance on government guarantees and subsidies, manage signi cant public assets and resources. Weak government guarantees, subsidies and capital while strong governance, timely disclosure and sector universities and professional institutes in Pakistan. He
management accountants in strengthening nancial diverting public resources from essential sectors disclosure can conceal ine ciencies, increase injections, placing additional pressure on public e ective monitoring can improve organizational previously worked as Assistant Manager Accounts at Orient
Group of Companies. Currently, he is a faculty member at ICMA
governance, transparency and accountability. (Ministry of Finance, 2024; IMF, 2023). governance and nancial risks, and delay corrective resources (IMF, 2023). performance and stakeholder trust. Pakistan's Multan campus and is pursuing a PhD.

70 ICMA’s Chartered Management Accountant, Jul-Aug 2026