The Interplay of Regulatory Frameworks, Political Dynamics and Legal Enforcement in the Lens of Pakistan's Corporate Governance Landscape

Abstract

ABSTRACT
The study presented a critical analysis of the state of corporate governance in Pakistan by synthesizing findings from three recent studies. It examined the evolution of Pakistan's corporate governance framework, primarily driven by the Securities and Exchange Commission of Pakistan (SECP), and appraises its alignment with international standards. While the doctrinal and regulatory framework, particularly the Companies Act, 2017 and the Code of Corporate Governance, 2019, demonstrates significant sophistication, a critical implementation gap persists. This gap is exacerbated by the dominance of family-owned businesses, weak enforcement mechanisms, and profound political instability. Furthermore, this article uniquely links the challenges in corporate governance to the weaknesses in the broader legal system, particularly the archaic laws governing documentary evidence in criminal proceedings, which hinder the effective prosecution of corporate malfeasance. The analysis concludes that the SECP’s success in creating a de jure framework is undermined by de facto challenges in enforcement, political interference, and an under-resourced judicial system, necessitating holistic reforms beyond the corporate regulatory sphere.