The Privatisation and Corporatisation Board (PCB) has introduced new guidelines and a model charter aimed at strengthening the governance of board subcommittees in state-owned enterprises (SOEs).

The new guidelines outline the procedures for establishing and operating board committees within SOEs. The initiative seeks to enhance corporate governance in state-owned companies and ensure that board committees are formed and function in line with the SOE Corporate Governance Code.

The model charter developed by the PCB clarifies the responsibilities of committees, their composition, and the roles of the committee chairperson and secretary. It also outlines procedures related to quorum requirements, voting processes and administrative matters such as record keeping.

In addition, the charter addresses key areas including the management of conflicts of interest, confidentiality, preparation of annual budgets and the evaluation of work performance. The document was developed in line with the principles set out in the SOE Governance Code and recognised international best practices.

Under the guidelines, the establishment of an Audit and Risk Committee is mandatory for all companies and does not require separate approval from the PCB. However, charters for other board committees must be endorsed by the company’s board and submitted to the PCB for approval.

Companies are also required to regularly review whether the work of committees is carried out in accordance with the charters approved by their boards.

The guidelines apply to all companies required to comply with the SOE Corporate Governance Code. While implementation of the guidelines and model charter is not mandatory for other government shareholding companies, the PCB has encouraged their adoption to further strengthen corporate governance practices.