Commissioner of Bangladesh Security and Exchange Commission (BSEC) Dr Mizanur Rahman on Thursday said in a financial institution external shareholders account for 95 percent investment and it is 80 percent in non-financial institutions but they have no meaningful role in the governance of the companies.
He said this while speaking as the Chief Guest at an event titled ‘Conference on Corporate Governance’ at the Chittagong Club in Chattogram.
The conference was organized by the Chittagong Stock Exchange (CSE) where company secretaries of around 150 companies listed on the CSE participated.
Several sessions of the conference highlighted various shortcomings of corporate governance and discussed how to mitigate them.
DR Mizanur Rahman said: “We observed a nexus between corporate management and controlling shareholders whereby a regime of corporate opacity has evolved. It begins with compromising the independence and diversity of corporate boards. The problem deepens as different board committees become dysfunctional.”
As corporate opacity deepens the agency conflict between external investors, the band of controlling shareholders and key management personnel worsens, he added.
He said an overlapping framework of regulatory and Institutional process is in place for improved governance and financial reporting in Bangladesh
To control the operations of the companies and other matters, there are guidelines put forward by the Registrar of Joint Stock Companies (RJSC), Bangladesh Bank for banks and financial institutions, Insurance and Development and Regulatory Authority (IDRA) and National Board of Revenue (NBR).
He also said the BSEC Corporate Governance Code 2018 is a flagship piece of regulation that is now the common reference point to mitigate the classic corporate governance crisis for the listed companies.
The present commission from day one has been persistently enforcing its corporate governance regulations, he claimed.
Addressing the company secretaries participating in the conference, he said that they have a lot to learn from this kind of conference as an integral part of company governance and have opportunities to apply it.
In the keynote paper Dr ATM Tariquzzaman said, corporate governance is the rules, standards, and organizations in an economy that govern the behavior of corporate owners, directors, and managers and define their duties and accountability to outside investors, that is, shareholders and lenders.
Account manipulation and misappropriation of assets, auditor’s failure and overall poor corporate governance lead to market failure.
CSE Chairman Asif Ibrahim said soon CEC will launch commodities exchange for which work is going on in full swing.
Akhtar Matin Chowdhury, Sabbir Ahmed, Major Emdadul Islam and Golam Farooq spoke on a total of four topics at this conference.