The Securities and Exchange Commission of Pakistan (SECP) has required listed companies to have at least one woman director within three years which it said would lead to a doubling of the number of female directors in the country.

The SECP said the change is being implemented through Pakistan's revised code of corporate governance under the new Companies Act 2017. This Act requires that public interest companies - which includes listed companies  - have the representation of women directors specified by the SECP. As a result of the requirement specified by the SECP for listed companies, the regulator said the proportion of female directors is expected to rise from 6.4% to at least 14.3%.

Pakistan's Companies Act 2017, took effect in May and the SECP said suggested it would bring a range of long term benefits for the country's corporate sector including ease of doing business, use of information technology, expeditious resolution of corporate disputes, and greater participation of women on corporate boards.

Currently, 69 companies out of the 100 in the KSE 100 index of Pakistan Stock Exchange, had no woman director, the SECP said, which included 16 out of the 20 largest listed companies. The current proportion of women on the boards of listed companies the SECP said, is much lower than the proportion of women directors in companies in S&P 500 and FTSE 100, which now ranges from 20% to 25%. It is also far below the 17.2% representation of women in Pakistan’s parliament and the country's 15.8% labour force participation rate.

The SECP stated: "The business case for women directors in Pakistan is no different from that being made elsewhere in the world. It is associated with, though not established as a cause of, better decision making and lower corruption without any compromise on, if not improvement in, the financial performance."

The regulator also noted that a number of both developed and developing countries - including Norway, Germany, India and Kenya had also introduced laws that addressed gender diversity on company boards.