Corporate governance
Corporate governance has become a buzzword in the corporate world, especially when the latest global financial crisis originated in the U.S.A. due to poor governance of financial institutions. Therefore, recently corporate governance which replicates a mechanism to mitigate the conflict of interests among the stakeholders of a corporation, has also received increased attention from our regulatory bodies.
In spite of some progress being made in the area of corporate governance, most of the companies' entrepreneurs and top management have misconceptions about corporate governance. Due to the poor implementation of corporate governance, Bangladesh is quite below the mark of the standard of corporate governance maintained by the neighbouring countries as well as global economy.
One of the reasons for slow progress in adopting corporate governance is that still now most of the companies are family oriented. Such concentration of ownership hinders effective implementation of corporate governance. Rights of the shareholders are of paramount importance in corporate governance. Shareholders' rights are reflected in the AGMs where shareholders can participate in decision making concerning fundamental corporate changes through their votes. The voting rights of the minority shareholders should be protected.
Board members and management should disclose material information and there should be a scope for disclosing the same. Non-executive or independent directors should be appointed by the companies so that the board and the management will have specialist experience as well as independent appraisal.
Corporate governance is gradually being implemented by the corporate houses and regulators should have a strong role in implementing the same.
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