Business Research Method
Challenges of corporate governance in Bangladesh
Published : Thursday, 13 December 2012
Dipok Kumar Roy
Sir Adrian Cadbury was chairman of Cadbury Ltd from 1965 and of Cadbury Schweppes during 1975-1989. A pioneer in raising awareness and stimulating the debate on corporate governance, he produced the Cadbury Report, a code of best practice, which has served as a basis for reform of corporate governance around the world.
On the challenges to implementing corporate governance, Sir Adrian Cadbury said, "The rich and complex governance system (of policy, laws, regulations, public institutions, self-regulated professional bodies, and managerial ethos) has evolved over centuries in developed market economies. In emerging markets, however, many elements of this mosaic are absent or countries are ill-equipped to address the corporate governance challenges they face."
In the context of Bangladesh, the "ill-equipped" structure has been unable to address the corporate governance challenges to make it effective and efficient. We should first identify the challenges before pointing out the ill-equipped structure.
Adoption of a standard framework: The first challenge is to adopt corporate governance in line with standard framework making the management accountable and responsible to the Board and the Board to the shareholders/stakeholders.
The Board's general approach is to act as a self-declared leader-with the 'my company' or 'my governance' attitude. As such the Board likes to stay beyond accountability and perform its duty in whatever way it likes. But under corporate governance, the Board is a corporate leader being accountable to the shareholders having fiduciary responsibilities to them. Sometimes, the Board emphasises keeping the management under their control with policy and procedures instead of making the Board members accountable with any written policy and reporting framework.
Thus the tiers of corporate responsibility and accountability do not work well,
Published : Thursday, 13 December 2012
Dipok Kumar Roy
Sir Adrian Cadbury was chairman of Cadbury Ltd from 1965 and of Cadbury Schweppes during 1975-1989. A pioneer in raising awareness and stimulating the debate on corporate governance, he produced the Cadbury Report, a code of best practice, which has served as a basis for reform of corporate governance around the world.
On the challenges to implementing corporate governance, Sir Adrian Cadbury said, "The rich and complex governance system (of policy, laws, regulations, public institutions, self-regulated professional bodies, and managerial ethos) has evolved over centuries in developed market economies. In emerging markets, however, many elements of this mosaic are absent or countries are ill-equipped to address the corporate governance challenges they face."
In the context of Bangladesh, the "ill-equipped" structure has been unable to address the corporate governance challenges to make it effective and efficient. We should first identify the challenges before pointing out the ill-equipped structure.
Adoption of a standard framework: The first challenge is to adopt corporate governance in line with standard framework making the management accountable and responsible to the Board and the Board to the shareholders/stakeholders.
The Board's general approach is to act as a self-declared leader-with the 'my company' or 'my governance' attitude. As such the Board likes to stay beyond accountability and perform its duty in whatever way it likes. But under corporate governance, the Board is a corporate leader being accountable to the shareholders having fiduciary responsibilities to them. Sometimes, the Board emphasises keeping the management under their control with policy and procedures instead of making the Board members accountable with any written policy and reporting framework.
Thus the tiers of corporate responsibility and accountability do not work well,