STATE OF CORPORATE GOVERNANCE IN BANGLADESH Analysis of Public Limited Companies- Financial, Non-Financial Institutions and State Owned Enterprises

Abstract

Corporate governance (CG) is an important effort to ensure accountability and responsibility and is a set of principles, which should be incorporated into every part of the organization. This study focused on the state of Corporate Governance (CG) in three sectors of the economy: the private company (public-listed company), the financial enterprises, and the State Owned Enterprises (SOEs). To understand the state of CG, three broad aspects of governance and management issues were studied. These are: a) shareholders’ rights, b) public disclosure of information, c) effectiveness of the Board. Within each of these many sub-categories were studied which were discussed in this paper. The study used interviews with key stakeholders, experts and executives of these types of companies, a questionnaire survey and also group discussions. In terms of the three sectors, this study found that public-listed companies are more open to their shareholders with respect to shareholders rights and disclosures of information. With regards to public disclosure of information and transparency, companies use “box checking” method rather than understanding the spirit of the disclosure. On the issue of the active participations of the independent directors SOEs had a better rating than others. In public limited companies study found that in 40% of the cases independent directors rarely disapproved the agenda placed in the board. In the best practice guidelines of CG three major committees are recommended, study found other than SOE, financial and non-financial institutions are not complying with the best practices.