A Comparative Study Of The Implementation Of Corporate Governance Legal Frameworks In The Banking Sector Of Pakistan: Insights From Emerging Economies

Abstract

This study aims to address the implementation of ‘Corporate Governance’ (CG) legal frameworks and CG practices in Pakistan's banking sector. The objective is to develop a powerful implementation of the Corporate Governance Regulatory Framework (CGRF) to enhance good CG practices in the banking sector of Pakistan to avert hindrances. The immense failure of some globally recognized companies, including banks, has given rise to the need for CG, and it has gained attention over time. CG, a system of directions and control for corporations, is a mechanism to safeguard companies from frequent failures. Good CG practices ensure disclosure, accountability, responsibility, transparency and independence of directors for better outcomes in undertakings. After the tsunami of privatization of State-Owned Enterprises (SOEs) from the 1990s due to big corporate collapse and banking scandals, the Government of Pakistan (GOP) has established legal frameworks along with regulatory and supervisory bodies to oversee and control the functions of banks. Despite the existence of various regulatory bodies, the banking sector in Pakistan yet faces challenges due to significant gaps in enforcement and implementation mechanisms. The legal frameworks for regulating CG practices in different states are diverse due to variations in the legal and cultural networks, but there are also similarities. This comparative study utilizes the doctrinal method of research with qualitative approach and comparative analysis using textual and contextual analysis to analyze the data for precise and accurate results. This study carries out a textual and contextual analysis of CG legal frameworks and their implementation in public and private banking companies of Pakistan under the insights from other developing and developed jurisdictions like India and the UK, and sorts some recommendations on the basis of the guidelines obtained from the legal frameworks of banks in India and the UK. The outcomes of the study tend to rehabilitate the corporate sector of Pakistan by paving the way for the progressive accomplishment of corporate errands, specifically in the banking sector of Pakistan.