Roundtable Discussion on the Role and Responsibilities of Independent Directors – Day 2
Event Name : Recent Events
Date : 19 March, 2007- ,
The Bangladesh Enterprise Institute (BEI) organized a roundtable discussion on the Role and Responsibilities of Independent Directors on Monday March 19, 2007 at BEI.
The objective of the roundtable discussion was to enhance the understanding of the role and responsibilities of independent directors serving on the boards listed companies, banks and financial institutions, insurance and other private sector companies.
Mr. Faruk Ahmad Siddiqi, Chairman, Securities and Exchange Commission (SEC) of Bangladesh, was the chief guest at the event; Mr. Farooq Sobhan, President of BEI chaired the event.
Mr. Mueen Afzal, Chairman, Pay and Pension Committee, Government of Pakistan, was the key note speaker at the roundtable on both the days. Mr. Afzal, a former finance secretary of the government of Pakistan, currently serves on the boards of more than 12 leading multinational and local companies in Pakistan as Independent Director. BEI invited Mr. Afzal to deliver the key note papers at the two roundtable discussions.
Mr. Manzur Elahi, Chairman, APEX Group, and Mr. Anis A. Khan, CEO and Managing Director of IDLC were the designated discussants at the roundtable.
While emphasizing the need for Independent Directors on a board, the keynote speaker, Mr. Mueen Afzal, said that the selection of one is critical as the individual plays a pivotal role in carrying out the responsibilities of a board. He also said that the nomination committee should be composed of Non Executive Directors to ensure selection of the best candidate and the recruitment process should be stated in the Annual Report.
He also stressed the importance of succession planning and the Chairman and CEO should implement executive development programmes to develop individuals in their companies for future role as directors.
While addressing the seminar, the chief guest, Mr. Faruk Ahmad Siddiqi, said that the corporate sector and the capital market in Bangladesh are at the initial stage of development. Entrepreneurs still prefer bank financing to the cheaper source of raising the fund from the capital market. As a result, Bangladesh’s market capitalization is less than 9% of the GDP.
He stressed that a rapid growth of the capital market can be achieved through good corporate governance practices, including, improved accounting and auditing processes, audit independence, full disclosure in annual reports, more efficient internal control, and a more efficient, informed, independent and dedicated board of directors.
In January 2006, the Securities and Exchange Commission (SEC) of Bangladesh issued Guidelines on Corporate Governance specifying the requirement of independent directors on boards of listed companies.
On the issue of appointing an Independent Director on a board, Mr. Siddiqi said that it is an important and emerging issue in the governance of corporations. He also said that the concept of Independent Directors is new in Bangladesh and concerns about the appointment of one ranges from the selection criteria of an Independent Director to his or her compensation package.
Mr. Manzur Elahi commented that Corporate Governance is closely linked with good governance. The absence of good governance makes it difficult to practice corporate governance. He said that the change should be a gradual process and awareness should be built regarding the issues and concepts of corporate governance.
BEI has already set the ball rolling with its corporate governance initiatives and gradually the importance of having an independent director on board will also be recognized.
Mr. Anis Khan shared with the audience his experiences as an Independent Director. He also stressed that the board members should be aware about their duties and liabilities to face the any legal concerns that may arise surrounding the company’s performance.
Representatives from leading listed companies, banks, non-banking financial institutions and academicians were present at the roundtable among others.
For further information, please contact Ms. Lopa Rahman, Project Director, Corporate Governance Strengthening Project or Ms. Sherina Tabassum, Communications Manager, BEI.
Posted Date : 4 March, 2012