Good corporate governance practice a sine qua non to attract institutional, foreign investors, The Financial Express, 9 February 2014
Date: 9 February 2014
Speakers at a seminar Saturday strongly laid stress on practicing good corporate governance (CG) especially at the listed companies in order to attract the institutional and foreign investors here.
They urged the government and regulators to take the issue seriously and promote the CG, which ultimately ensures the firms’ sustainable growth and enhance their profitability.
Pearl Institute of Financial Markets (PiFM) in association with International Finance Corporation (IFC) and Bangladesh Enterprise Institute (BEI) organised the seminar on “Corporate Governance for Growth and Prosperity: Establishing an Effective Corporate Governance Culture in Bangladesh” at a city hotel.
The good CG is the proper compliance of mainly transparency, accountability, due responsibility and fairness at every transaction and other activities of the companies.
Compliance of CG, which is a matter of continuous practice, needs working together by all the regulators, firms’ board of directors, shareholders and other stakeholders, they said, adding that CG in Bangladesh is not up to the mark.
Some local and international experts on corporate governance took part in two separate panel discussions at the seminar, which was participated by a good number of high officials including chairmen and board members of different listed companies in Bangladesh.
Participants at the event mainly shared the best practices and discussed the importance of good CG. They also shed light on how the board members can play an effective role in ensuring CG in their respective firms, and how the director-training can improve the efficiency of independent directors in Bangladesh.
Chaired by Farooq Sobhan, president and CEO of BEI, a panel discussion on “Importance of Good Corporate Governance for Listed Companies: Thoughts from Regulators, Experts and Practitioners” was addressed by Farzana Chowdhury, managing director and CEO of Green Delta Insurance Company Ltd, Adeeb H Khan, senior partner of Rahman Rahman Huq, Syed Naser Bukhtear Ahmed, Chairman of Financial Excellence Limited (FinExcel), Dr Hassan Zaman, chief economist of the Bangladesh Bank.
Another panel discussion on “Need for Director Training: How to Build a Pool of Independent Directors”,
chaired by Wali-ul-Maroof Matin, managing director of PiFM, was addressed by Ms Gillian Ng, director, corporate governance, The Iclif Leadership and Governance Centre, Malaysia, and Mrs Shireen Scheik Mainuddin, managing director of ASAAN.
At the seminar, Ms Lopa Rahman, corporate governance specialist, South Asia Advisory Services, IFC, made a presentation on “IFC’s Work on Corporate Governance in Bangladesh” while Mr David Robinett, senior private sector development specialist, corporate governance, the World Bank Group, made another presentation on “Role of Corporate Governance in Investment Decision: Corporate Governance Development Framework”.
The speakers mentioned the role of directors as very important to ensure CG in their respective companies. In this connection, they emphasised on training the directors, enriching their knowledge about their role, business dynamics and other relevant information in their respective business.
The independent directors should speak up in the interest of the shareholders, and even have to have courage to say “no” to any decision or proposal, which don’t conform to the companies’ policy; otherwise, they also have to share the firms’ ‘bad’ reputation at the end of the day, they said.If necessary, the independent directors should resign in case of incapability to perform independently, they said, and criticised the politicization of appointment of independent directors at the state-owned commercial banks as the practice seriously hinders the proper function of the banks, let alone the CG.When the CG will be stressed at large in the country, the companies will appoint efficient manpower, which will facilitate to ensure CG, compliance of which at all levels will strengthen the firms and enhance their profit, ultimately benefitting all the stakeholders including the shareholders.On the other hand, non-compliance of the CG will cost the companies a lot such as they will fail to compete with their competitors both home and aboard, they warned.As part of the mechanisms to ensure the CG, the speakers further suggested introducing reward and penalty system in this connection, appointing rights persons and working hand-in-hand with the regulators.