Corporate Governance in Bangladesh Essay

12057 Words 49 Pages
Term Paper On

Corporate Governance in Bangladesh

Prepared for Professor Dr. Akbar Ali Khan Faculty

Prepared By Alim Al Razi ID: 13174044

BRAC Business School

August 16, 2013

Alim Al Razi
ID: 13174044 Term Paper
Corporate Governance & Social Responsibility BRAC University, August 2013

ABSTRACT

There is a growing sentiment that poor corporate governance is one of the forces to blame for the collapse of the financial market since it failed to ensure the transparency, accountability and integrality of companies, particularly on matters of corporation. Bangladesh is one of the third world countries having many opportunities in corporate sector and also one of the least developed countries in the south-east Asia that
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Bangladesh's small size and lack of natural resources have necessitated an open trade policy. Bangladesh also has a liberal policy towards foreign direct investment (FDI). However, when compared to those of the India, Sri Lanka, Pakistan, Thailand and Malaysia, CG in practice and philosophy have up till now remained relatively under-developed in Bangladesh. Further, there appears to be a lack of either market or structural governance mechanisms to discipline errant managers. To govern the corporate environment in Bangladesh, following legal measures are in practice: • Securities and Exchange Ordinance 1969 • Bangladesh Bank Order 1972 • Bank Companies Act 1991 • Financial Institutions Act 1993 • Securities and Exchange Commission Act 1993 • Companies Act 1994 • Bankruptcy Act 1997 However, to institutionalize the practice of CG in Bangladesh, first initiative was undertaken by the Securities and Exchange Commission (SEC). SEC issued a notification on Corporate Governance Guidelines (CG Guidelines) for the publicly listed companies of Bangladesh under the power vested on the Commission by Section 2CC of the Securities and Exchange Ordinance, 1969. The CG Guidelines were issued on a ‘comply or explain’ basis, providing some ‘breathing space’ for the companies to implement on the basis of their capabilities. Nevertheless, the overall framework for investor protection and CG

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