SECP asks firms to divert CSR budget for COVID-19

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has advised all companies to divert their Corporate Social Responsibility (CSR) activities and budget for COVID-19 prevention, detection and cure, a statement said on Friday.

It also asked the companies to generously contribute towards research and development activities related to the COVID-19.

SECP invites attention of the companies’ board of directors towards their social responsibilities, enshrined in Section 204 (2) of the Companies Act, 2017, saying; “A director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees the shareholders the community and for the protection of environment.’’

Since, the outbreak of the coronavirus disease (COVID-19) is threatening the global economies, it is high time for the corporates in Pakistan to rise to the occasion and address their responsibility, the regulator said.

Companies are advised to take proactive measures to ensure effective contingency planning for financial and business continuity; mitigate health risks to employees, customers and communities, it said. It also said the companies should prevent premises from becoming a node of COVID-19 transmission and ensure that adequate plans and means are in place.

They should also ensure alternative arrangements with suppliers and customers so that business operations can continue. To achieve aforesaid purposes, the companies are encouraged to divert their CSR budgets for a timely and effective response to COVID-19 outbreak..

The SECP also encourages companies and other related persons to consider their activities in the light of their disclosure obligations under applicable laws to provide investors with insight regarding their assessment of, and plans for addressing, material risks to their business and operations resulting from the coronavirus to the fullest extent practicable to keep investors and markets informed of material developments.