ICSB Journal (July-SEptember-2019) by ICSB Bangladesh

Volume : XXI

Issue : 3

July - September 2019

Governance

ETHICS

PARTICIPATION

CONSENSUS

TRANSPARENCY

ACCOUNTABILITY

COMPLIANCE

Role of the Professionals

INSTITUTE OF CHARTERED SECRETARIES OF BANGLADESH (ICSB)

Institute of Chartered Secretaries of Bangladesh (ICSB) was established under an Act of Parliament i.e. Chartered Secretaries Act 2010 and is the only recognized professional body in Bangladesh to develop, promote and regulate the profession of Chartered / Company Secretaries in Bangladesh. The Institute was initially established under a license from the Ministry of Commerce in 1997 as the Institute of Chartered Secretaries and Managers of Bangladesh (ICSMB) and subsequently was converted to Institute of Chartered Secretaries of Bangladesh (ICSB). The affairs of the Institute of Chartered Secretaries of Bangladesh (ICSB) are managed by a Council consisting of thirteen elected members and five nominees of the Government. The President is the head of the Institute. The major contribution of a Chartered Secretary is crucial in the corporate sector. Chartered Secretary is the requisite qualification to become a Company Secretary. Company Secretary is an important professional, aiding the efficient management of the corporate sector. Company Secretary is a Statutory Officer under the Companies Act 1994. According to the Bangladesh Securities and Exchange Commission (BSEC), all the listed companies should have a Company Secretary. Company Secretary is the compliance officer of the company, who has to interact, coordinate, integrate and cooperate with various other functional heads in a company.

THE COUNCIL 2019-2022

EDITORIAL BOARD

SUBSCRIPTION RATE

Muzaffar Ahmed FCS Mohammad Bul Hassan FCS Md. Selim Reza FCS Salim Ahmed FCS Mohammad Sanaullah FCS Itrat Husain FCS Mohammad Asad Ullah FCS Akhter Matin Chaudhury FCS M. Naseemul Hye FCS Md. Azizur Rahman FCS Mohammad Nurul Alam FCS Md. Sharif Hasan FCS Md. Shafiqul Alam ACS Md. Shakhawat Hossain, Additional Secretary, GoB Mohammad Manzarul Mannan, Joint Secretary, GoB Dr. Mohammad Mohiuddin, Joint Secretary, GoB Khandaker Kamaluzzaman, Commissioner, BSEC Md. Zakir Hossain, Registrar, Additional Secretary, RJSC, GoB

: : : : : : : : : : : : : : : : : :

Editor Mohammad Shahajahan, FCS Members Itrat Husain FCS Kazi Ashiqur Rahman FCS Subash Chandra Moulick FCS Md. Monowar Hossain FCS Md. Shiful Islam FCS Mir Shariful Bashar ACS Md. Noor-Ul-Alam ACS Mohammad Abir Islam ACS For Students Others

: per copy Tk. 100; per year Tk. 350 : per copy Tk. 150; per year Tk. 560

President Senior Vice President Vice President Treasurer Immediate Past President Past President Past President Council Member Council Member Council Member Council Member Council Member Council Member Council Member Council Member Council Member Council Member Council Member

IN THIS ISSUE Editorial The Council 2016-2019 The Council 2019-2022 Message from the President

Proﬁle of the Members of the Council 2019-2022 Institute News

3 4 5 7 8 17

ARTICLES

PUBLISHED BY Institute of Chartered Secretaries of Bangladesh (ICSB)

(Established under Chartered Secretaries Act 2010 (Act No. 25 of 2010)

The views and opinions expressed in the articles published in this Journal are those of the writers only. ADMINISTRATIVE MINISTRY Ministry of Commerce Government of the People’s Republic of Bangladesh INSTITUTE OFFICE Padma Life Tower (8th Floor) 115 Kazi Nazrul Islam Avenue Bangla Motor, GPO Box No. 3100 Dhaka-1000, Bangladesh Phone : +88 02 933 9957, 933 4878, 933 6972, 4831 5338 +88 02 4934 9578, 933 6901 (Extn.-101-108) Fax : +88 02 933 9957 Mobile : 01708 030804 E-mail : secretary@icsb.edu.bd, icsb@icsb.edu.bd Web : www.icsb.edu.bd CAMPUS Padma Life Tower (7th Floor) 115 Kazi Nazrul Islam Avenue Bangla Motor, Dhaka-1000 Bangladesh Design & Print Dominant Printing & Packaging M 01794550916 E alamgir.dominant@gmail.com

Corporate Governance and Role of CS Professionals -Bipul Kumar Bhowmik FCS

The Chartered Secretary as the Governance Professional and the Role of ICSB -Mohammad Shahajahan FCS

Governance, Tax Compliance and Tax Professionals’ Role -Dr. Sams Uddin Ahmed

The Evolving Role of Company Secretary in Corporate Governance: Bangladesh Perspective -Nayamul Hoque ACS

Steps of Savvy Professionals towards Good Governance -Md. Saiful Islam ACS

Role of Chartered Secretaries as Governance Professionals -Md. Noor-Ul-Alam ACS

Role of a Chartered Secretary -Md. Mijanur Rahman ACS

Professionals’ Role to Promote Corporate Governance -Mohammed Quamruzzaman Khan ACS

Role of Company Sceretary for Implementing IT Governance in Organization -A.B.M. Kalim Ullah QCS

Role of the Governance Professionals -Md. Anower Hossin

NOTIFICATIONS

EDITORIAL

GOVERNANCE, CORPORATE GOVERNANCE AND GOVERNANCE PROFESSIONALS

this issue... mber July - Septe

Volume

: XXI

Issue : 3

2019

anceals Goofvethern Profession

ETHICS

TION PARTICIPA

S CONSENSU

ENCY TRANSPAR

ACCOUNTA

BILITY

COMPLIAN

Role

overnance is not only just complying with laws, regulations, standards, and codes but also about creating cultures of good practice or an ethical culture which leads to the success of the organization. Every organization lays its structures, policies, and procedures that need to comply with best practice. For ensuring good governance, it is essential to practice these structures, policies, and procedures by the respective organization’s people to create a culture within the organization that enables them to perform effectively. In this regard, a governance professional leads and advises on best practice in governance, risk management and compliance within the organization. Corporate Governance (CG) is the corporate best practice culture to comply with structures, policies and procedures of the corporate body for ensuring the best interest of its stakeholders like shareholders, customers, employees, regulators and above all the environment. Corporate governance best practices were first introduced following corporate scandals in the UK in the early 1990’s. UK’s Cadbury Report highlighted the importance of CG by mentioning that CG is important not only to earn profits in a company but also to reform the corporate sector through environmental awareness and ethical behavior. CG started to gain momentum in early 2002 through the Sarbanes Oxley Act of US and it became obvious within the company after the global giant corporate financial scandals like Enron and WorldCom.

arch 2019

January-M

Volume

:1 : XXI Issue

vernance rporate Go ble ICSB's Co Sustaina e Award-A I) Excellenc tiative (SG Ini e nc Governa

R CE R CE FO EN FO EN ED LL al PIR CEIRED LL CE INS EX 19 on T ING SP EX 20 ati GE RN T IN G D IN er, Intern AN VE E GOD GE RN mb u ICC) a PIR ING VE veandhr (B ak Dh No INS OT E ANGO 30 ab nte r, OM IR G y, ng CeNaga PR SP IN

IN OT ursdall, Ba ce gla OM Th y Hanferen an rit Co er-e-B leb Sh Ce

Therefore, it was crucially felt to introduce Corporate Governance practitioners to leads and advises on best practices to reinforce governance norms/ codes in the listed companies. Corporate Governance professionals may title as Company Secretary, General Counsel, Chief Financial Officer, Chief Governance Officer, Chief Risk Officer or another title depending on the organization. Now-a-days due to the outstanding role of Company Secretary in the organization, the position may be transformed into Corporate Governance professional. Many Asian countries including Bangladesh have also adopted the Company Secretary model to improve Corporate Governance within the company.

Throughout the world, many professional institutions are employing their endeavors to produce governance professionals who are being deployed in the companies to create the appropriate culture to enable the corporate governance structures, policies, and procedures to work effectively. In Bangladesh, Institute of Chartered Secretaries of Bangladesh (ICSB) is aiming to promote corporate governance excellence within the companies through producing skilled and learned Company Secretaries as well as Chartered Secretaries in practice. Both Company Secretaries and Chartered Secretaries in practice are specialists on the best practice in governance, risk management and compliance issues to ensure the safeguard of organizational integrity, to promote board dynamism and its soundness, to comply with code of ethics and corporate behavior, to balance the interests of the board/ governing body, management and other stakeholders. The new council of ICSB is determined to banquet its role to promote professional governance within the institute as well as corporate governance within the companies by ensuring the best governance practices, improving and updating its members’ skills and knowledge through continuous professional development, launching workshop and seminars for business leaders and corporate management team, undertaking governance awareness programs and arranging training programs for board of directors or members of the governing body. All these initiatives would be incentive to promote corporate governance excellence in Bangladesh. Beside these, ICSB has scope to update curriculum and programs to update its members with the proﬁciency of the required competencies and ability to use of artiﬁcial intelligence, emotional intelligence, Blockchain, Internet of Things (IoT), BigData Analysis, Business informatics and transformations, etc. which, in modern era, are most emerging issues in corporate arena. Wishing the best success of ICSB and its professionals to accelerate the corporate governance excellence in Bangladesh.

Mohammad Shahajahan, FCS Editor

July-September 2019 | 3

The Council 2016-2019

Council Member

Council Member Md. Zakir Hossain Registrar (Additional Secretary), RJSC&F, GoB

4 | July-September 2019

THE COUNCIL 2019-2022

The Council 2019-2022

President Muzaffar Ahmed FCS

Senior Vice President Mohammad Bul Hassan FCS

Immediate Past President Mohammad Sanaullah FCS

Vice President Md. Selim Reza FCS

Past President Itrat Husain FCS

Treasurer Salim Ahmed FCS

Past President Mohammad Asad Ullah FCS

Council Member M. Naseemul Hye FCS

Council Member Md. Azizur Rahman FCS

Council Member Mohammad Nurul Alam FCS

Council Member Md. Shakhawat Hossain Additional Secretary, GoB

Mohammad Manzarul Mannan Joint Secretary, GoB

Council Member

Council Member Dr. Mohammad Mohiuddin Joint Secretary, GoB

Council Member Akhter Matin Chaudhury FCS

Council Member Md. Sharif Hasan FCS

Council Member

Council Member Md. Shafiqul Alam ACS

Council Member Md. Zakir Hossain Registrar (Additional Secretary), RJSC&F, GoB

Secretary in Charge to the Council

Md. Shamibur Rahman ACS

July-September 2019 | 5

C.S.

ADMISSION NOTICE JANUARY-JUNE

IF 2020 SESSION YOU ARE WILLING TO PREPARE YOURSELF FOR A CHALLENGING AND REWARDING PROFESSION ‘CHARTERED SECRETARY’ (CS) IS THE RIGHT CHOICE FOR YOU. THE CHARTERED SECRETARY IS THE GLOBAL REQUISITE QUALIFICATION TO BECOME A COMPANY SECRETARY.

ADMISSION IN FOUNDATION LEVEL Application in prescribed forms are invited from Graduates other than business background and business graduates with less than 6 points for undertaking a Foundation Course for (Six) months for January-June, 2020 Session. After passing they will be automatically eligible for enrollment in Executive Level-I course in the subsequent semester. ADMISSION IN CS EXECUTIVE LEVEL-I Application in prescribed forms are invited from the business graduates or MBA/MBM/MBS or CA/ACCA/CMA qualified with graduation, who are interested to pursue the CS Course for enrollment in its Executive Level-I of January-June, 2020 Session.

DATE OF APPLICATION & ADMISSION TEST

MINIMUM ELIGIBILITY

Application form is available from - Dec. 07, 2019 to Jan. 06, 2020 Last date of submission of application - January 07, 2020 (Original Certificates must be shown at the time of form submission) Admission Test (Saturday) - January 11, 2020 at 3.30 PM University Graduate with 6 points (1st Div.=3, 2nd Div.=2, 3rd Div.=1) or equivalent CGPA. A-Level qualified with business graduate may also apply.

Tk. 20,650 Tk. 1,000 FEES FOR FOUNDATION LEVEL Tuition fees for Foundation Level Tk. 15,000 Application Form and Students’ Handbook Tk. 1,000 CLASS TIMINGS Day Shift: 8.30am to 5.00pm (Friday & Saturday) FOR EXECUTIVE LEVEL-I Evening: 6.30pm to 9.30pm (4 Days in a week) COURSE DURATION Total 5 Semesters (excluding Foundation Course) of 6 months each. FEES FOR EXECUTIVE LEVEL-I

Tuition fees for Executive Level - I

Application Form and Students’ Handbook

For further information, please contact

INSTITUTE OF CHARTERED SECRETARIES OF BANGLADESH Padma Life Tower (8th Floor), 115, Kazi Nazrul Islam Avenue, Bangla Motor, Dhaka-1000 Tel: 880-2-933 6901, 4934 9578 /101 & 105 Mobile: 01708 030804, E-mail: secretary@icsb.edu.bd, education@icsb.edu.bd Please note that Admission Forms are also available at ICSB Website www. icsb.edu.bd

Assalamu Alaikum.

At the outset, my warm regards and greetings to the esteemed members of the Institute of Chartered Secretaries of Bangladesh. It is a great privilege and honor for me to take over as President of this esteemed institution. ICSB is an Institute with a proud past and an exciting future, being the only recognized professional body to develop, promote and regulate the profession of Chartered Secretary in Bangladesh. And as I refer to its proud past, I wish to acknowledge the endeavors and achievements of the past Presidents, Ofﬁce Bearers and Council Members. Their persistent, passionate and pragmatic leadership towards the Institute combined with a clear vision of the path has brought the ICSB to its current position of eminence amongst global Chartered Secretaries institutes. We have a lot to offer to the Government, the corporate sector and to the broader society, as they wrestle with the issues of the progressing economy and, if we do it right now, I know our contributions will be welcomed and appreciated like before. Bangladesh is actively engaged in realizing the challenging Sustainable Development Goals (SDGs). In the last ﬁscal year, we witnessed an 8.13% GPD growth. To retain the optimum economic growth, excellence in Corporate Governance is a must. Good governance ensures accountability and transparency and is an important factor in attracting Foreign Direct Investment (FDI). Let’s focus and work on our forthcoming Secretarial Standards. Membership has increased over the years, however, the component of active members has declined which needs utmost attention. Introspective and perceptive reasoning advises that the Institute needs to evolve through new modes of membership acquisition and continuing engagement with members through multiple channels of communications. Parallelly, strengthening our professionalism through education, training, publications and providing more platforms. During our present tenure, we will continue to build on our strengths, but also take on new directions. We will retain our commitment

to solidarity, ensuring that our members that are less resourced can have more opportunities and assistance to develop the skills. In December, the ﬂag-ship event of ICSB, the 6th ICSB National Award 2018 for corporate governance excellence is being organized. I look forward to your active participation and contributions which will lead to an enriching experience for all of us. It is my proud privilege to kick-start our preparations for a year-long series of events including ICSB Annual Picnic, CPD Programs, 8th National Convention 2020, 8th Convocation, 7th CGEA, ICSB Members’ Night, 10th AGM and many other events. Among many challenges I would like to point out perusing NBR to allow CS Professionals to work as ITP and to incorporate our suggestions on many important issues to make the Companies Act 1994 more pertinent and pragmatic, which will ultimately help for boosting up trade, commerce and overall economy of Bangladesh. In the coming year, the new council of ICSB has planned to be involved in a number of events and activities/actions designed to take the Institute to a greater heights and thus impact to the society and nation. In all these endeavors, I look forward to the whole hearted support of all members making ICSB a truly global association in the ﬁeld of Corporate Governance. I would like to express my profound gratitude to different ministries, regulators, CSIA, patrons and different corporate partners for their guidelines, suggestions, cordial cooperation and heartiest support. May Allah help us to do all good things for our beloved Institute.

Muzaffar Ahmed, FCS

PRESIDENT

July-September 2019 | 7

MESSAGE FROM THE PRESIDENT

ear Professional Colleague,

Profile of the Members of the Council 2019-2022 Muzaffar Ahmed, FCS Muzaffar Ahmed FCS, FCMA, is a known personality in the corporate arena of the country and a successful professional. Ahmed is the founder president of the Institute of Chartered Secretaries and Managers of Bangladesh (ICSMB). From 1997 as President and Council Member he pioneered Chartered Secretary profession.. Ahmed also served the Institute of Cost Management Accountants of Bangladesh (ICMAB) for 18 years as Director, Council Member, Treasurer, Secretary and Vice President, and lastly he was elected as the President of that institute for the year 1999. He represented ICMAB in many national and international seminars and conferences. Starting his career as lecturer in the Department of Accounting in University of Chittagong in 1974. Ahmed served many national and international organizations in senior positions. ln his professional career Ahmed is the Founder of the Credit Rating Information and Services Limited (CRISL) and presently serving as its President and Chief Executive Officer. CRISL is the first ever multinational rating agency established in Bangladesh with the sponsorship and technical assistance of Rating Agency Malaysia Berhad (RAM) the premier rating agency of Malaysia and JCR-VIS Credit Rating Agency of Pakistan. As the President & CEO of CRISL, Ahmed has the privilege of looking at various sectors of national economy closely. The financial Mirror rewarded Ahmed for his outstanding contribution towards Institutional Development in the Financial Sector of the country for the year 2004. Ahmed has many of, publications and has attended many conferences and seminars both at home and abroad and presented a number of technical paper as Resource Person.

Mohammad Bul Hassan FCS Mohammad Bul Hassan is a Fellow Member of institute and Senior Vice President of the present council. Earlier he also was Senior Vice President of the Institute for the term 2016-2018 andthe Treasurer of the Institute for the term 2013-2016. Hassan is currently working as Chief Financial Officer & Company Secretary of Siemens Bangladesh Limited. He started his career as Trainee Executive with Siemens Bangladesh Ltd. in 1996 after completing his post-graduation in Accounting & Information Systems from University of Dhaka. He also worked in a local bank for a brief period of time. In his twenty three years with Siemens he has worked in a gamut of functional and management areas like Business Administration, Corporate Management and Governance, Organization & Information Technology, TQM, Internal Audit, etc. While working in the capacity as Head of Business Administration for Healthcare sector and subsequently for Power Generation and Energy Management he acquired valuable acumen in line with the global and Bangladesh specific opportunities and business dynamics of these sectors. Working in Siemens has also given him multiple opportunities to work in a multi-cultural environment cutting across geographies. Mohammad Bul Hassan is a Life Member Accounting Alumni, University of Dhaka. He has attended many management programs and workshops both at home and abroad. He is also a ROTARIAN.

8 | July-September 2019

PROFILE Md. Selim Reza FCS Md. Selim Reza obtained M. Com (Accounting) from Jagannath University, Dhaka in the year 1991. He completed C.A. Course from Zahir Ahmed and Co., Chartered Accountants. He started his career as Audit Officer in BRAC in 1994 and continued up to 1998. He had promoted to the position as Senior Audit Officer in BRAC and later joined to Concern Bangladesh and wored there till December 2000. He worked as Company Secretary and EVP in Baira Life Insurance, Chief Financial Officer in IRIS Group and Senior General Manager in Homeland Life Insurance Company till 2009. From 2009 to 2012 he worked as Deputy Managing Director (Finance and Accounts) and Company Secretary in Baira Life Insurance Company. He is a Fellow Member of the Institute of Chartered Accountants of Bangladesh (ICAB) and the Institute of Chartered Secretaries of Bangladesh (ICSB). He is a partner of ARTISAN-Chartered Accountants. He is also an Associate of the Institute of Personal Management (AIPM). Salim Reza is the Independent Director of Progressive Life Insurance Company Limited. He is a ROTARIAN and a Philanthropist.

Salim Ahmed FCS Salim Ahmed a Fellow member of the Institute. He had been elected as the Treasurer of the Institute in 2019 and in addition he was the Chairman of Membersâ&#x20AC;&#x2122; Welfare and Recreation Sub Committee during the period 2016-2019. Salim Ahmed is currently working in Eastern Housing Limited as Company Secretary. Salim Ahmed has more than 25 years' experience in Corporate Affairs. Prior to joining Eastern Housing he worked in Surovi Group as Group Company Secretary. He worked in Dhaka Insurance Ltd. as Company Secretary and Head of Administration & Establishment from 2000 to 2011. He started his career with Janata Insurance Company Ltd. in 1990 and worked there up to 2000. Salim Ahmed is also involved in social service activities. He is a Life Member of Bangladesh Lions Foundation and Past President of Lions Club of Dhaka Oriental. He is also life member and General Secretary of Bangladesh Work Camps Association (BWCA), a voluntary organization established in 1958. He attended many national and international seminars and conferences. He visited India, Pakistan, Nepal, Indonesia, Vietnam, Singapore, Uganda and Morocco. A Masters in Science from University of Dhaka Salim Ahmed obtained the Chartered Secretary professional degree from ICSB in 2005.

July-September 2019 | 9

Mohammad Sanaullah FCS Mohammad Sanaullah is the Immediate Past President and Council Member (2019-2022) of the Institute of Chartered Secretaries of Bangladesh (ICSB). He is the first elected President (2010-2013) of the Institute after the enactment of the Chartered Secretaries Act 2010. He has been honored with a gold medal from the Institute as one of the founder members. He is a Fellow, Founder Member and Founder Treasurer of the Institute of Chartered Secretaries of Bangladesh (ICSB). He was elected in the ICSB Council since inception to 2019 and played an instrumental role for the enactment of Chartered Secretaries Act 2010. Moreover, he was the President of the International Federation of Company Secretaries (IFCS) and Past President of the Institute of Chartered Secretaries and Managers of Bangladesh (ICSMB). Sanaullah is the Corporate Affairs Director, Company Secretary and Head of Human Resources of Singer Bangladesh Limited, a leading Multinational Company, with over 34 years of rich and varied exposure in Business, Corporate Management and Governance. Sanaullah served as Board Member of Singer Bangladesh Limited for 5 years and Bangladesh Institute of Capital Market (BICM) for 6 years respectively. He is also a certified Trainer on Corporate Governance - Board Leadership of the Global Corporate Governance Forum (GCGF) of International Finance Corporation (IFC). He is a fellow Member of the Institute of Personnel Management, Bangladesh and a Former Council Member (2005-2007) of Bangladesh Society for Human Resource Management (BSHRM). He is also a Member of the Institute of Internal Auditors, USA. In addition to that, he has developed and contributed significantly to various professional development programmes and workshops organized by the Institute and various forums both at home and abroad. His contributions towards the development of the profession of Chartered Secretaries in Bangladesh is remarkable. Sanaullah is a visiting Faculty of MBA programme of leading private Universities in Bangladesh. Mohammad Sanaullah did his Graduation with Hon's and Masters in Accounting from University of Dhaka in 1980 and 1981 respectively. He is an MBA in Marketing and Post Graduate Diploma in Personnel Management. So far he visited many countries like USA, France, Italy, Switzerland, Turkey, China, South Africa, Kenya, Malaysia, UAE, Singapore, Thailand, India etc.

Itrat Husain FCS Itrat Husain is a Past President (2007-2008), Fellow and a Founder Member of the Institute. He was the Editor of “The Chartered Secretary”, a Corporate Professional Journal of the Institute. He is the Chief Executive of Itrat Husain & Associates, a practicing Chartered Secretaries firm in Bangladesh, providing Corporate Advisory, Governance and Secretarial Services to private, public and listed companies. He is also involved in management consultancy work. He has over 41 years of experience in Corporate Management both in public and private reputed companies in senior positions in the manufacturing, trading, and service sectors in Asia, Europe and Africa and over eleven years’ experience in two Multinational Companies. Currently he is an the Independent Director on the boards of Envoy Textiles Limited and NCC Bank Limited. He has worked as Director in two listed Companies and also served as Company Secretary in Singer Bangladesh Limited, Ekushey Television Limited and Argon Denims Limited. He is associated with training and also lectures in other organisations. He is a qualified Chartered Management Accountant (CIMA) from UK and is also a Fellow Member of the Institute of Cost and Management Accountants of Bangladesh (ICMAB). He has attended many training programmes and workshops both at home and abroad and is a widely travelled person. He attended a 4 day “Pilot Corporate Secretaries Toolkit Workshop” at Johannesburg in South Africa in 2013. He is a ROTARIAN and is also associated with various philanthropic and cultural activities.

10 | July-September 2019

PROFILE Mohammad Asad Ullah FCS Mohammad Asad Ullah has been serving as Executive Director-Corporate Affairs and Group Company Secretary of all the Companies of Beximco Group since 1998. Since his joining in 1991 in the Corporate Headquarters of Beximco Group, Asad Ullah had worked as Deputy Group Company Secretary. Before joining in Corporate Headquarters, he worked in Beximco Pharmaceuticals Limited in various responsible positions since July 1985. He did his Graduation and professional degree in Law (LL.B.) from the University of Dhaka. He obtained LL.M. and also MBA major in Human Resource Management. As President of the Institute for 4 Terms: 2006-2007, 2008-2009, 2009-2010 & 2013-2016 he had performed the responsibilities with the best satisfaction and successfully representing the Institute in national and international level. Under his dynamic leadership, relentless efforts and constant persuasion with the highest level of Government for long 11 years the “Chartered Secretaries Act, 2010” was passed in the Jatio Sangshad of Bangladeshwhich brought the Institute as Statutory Body under an Act of Parliament. For such contributions he was awarded a Gold Medal by the ICSB in 2010. He had served the Institute from 1998 as Treasurer, Vice-President and Senior Vice-President. He performed the responsibilities of different important Committees of ICSB as well as Council Member for the period 2016-2019. He further elected as Council Member of ICSB for the term 2019-2021. ICSB National Award for Corporate Governance Excellence was introduced under his dynamic leadership in 2014 as the President of the Institute. He served as Member of the Board of Directors of Bangladesh Institute of Capital Market (BICM) for the terms 2008-2009, 2009-2010 and 2013-2016 and played a pioneering role for its establishment. He took lots of programs for providing education to the backward and ultra-poor peoples of his village home like establishment of a model college in Cumilla which is awarded MPO by the Ministry of Education in 2019 being top most in merit list in the District. He participated in various professional seminars, workshops and training courses in Bangladesh , United Kingdom, USA, Pakistan, India, Singapore, Hong Kong, Malaysia, Japan, Australia, UAE, France and Switzerland.

Akhter Matin Chaudhury FCS Akhter Matin Chaudhury is a Fellow and Life Member of the Institute of Chartered Accountants in England and Wales, a Fellow of the Institute of Chartered Accountants of Bangladesh and a Fellow of the Institute of Chartered Secretaries of Bangladesh. Chaudhury qualified as a Chartered Accountant in 1976 in the United Kingdom. He returned to Bangladesh in 1987 to join BOC Bangladesh Ltd. serving there in various capacities, including General Manager (Finance) & Company Secretary and finally as Board Director responsible for the Gases business. He left BOC in 1998 to co-found Eshna Consulting Team Ltd., a management consulting company, of which he was Managing Director till 2000. Akhter Chaudhury was Chairman & Managing Director of Nuvista Pharma Ltd., formerly, Organon (Bangladesh) Ltd., from 2001 to 2018. At present, Chaudhury is the Principal Consultant of Black Swan Consultancy. Other credentials:

• • • •

Chairman, Bangladesh Youth Leadership Centre Member, Board of Advisers, BRAC Business School Independent Director, United Commercial Bank Ltd. Nominated Director, Ispahani Tea Ltd.

July-September 2019 | 11

M. Naseemul Hye FCS M. Naseemul Hye is a Fellow Member of the Institute. He was the Senior Vice President of the Institute for the term in 2013-2016. Prior to that, he was the Vice President of the Institute for the last term in 2010-2013 and he was also the Treasure for three terms in 2007-2008, 2008-2009 and 2009-2010. He did his graduation and post-graduation in Accounting from the University of Dhaka in 1981 and 1982 respectively. He also completed his Post Graduate Diploma in Financial Management (PGDFM) from Bangladesh Institute of Management (BIM). He is serving as Senior Executive Director and Company Secretary of Bashundhara Group. He is also the Trustee and Chief Executive Officer (CEO) of Bashundhara Foundation. He is also a member of the Trusty Board of Basundhara University. He is also an Adjunct Faculty of the Institute of Chartered Secretaries of Bangladesh (ICSB) and Bangladesh Insurance Academy (BIA). He is also a ROTARIAN.

Md. Azizur Rahman FCS Azizur Rahman is a Fellow Member of the institute and is working as the Head of Public Affairs & Company Secretary of British American Tobacco Bangladesh (BATB). He joined in the company secretarial function of BATB in 2002. In his 27-year career span, Mr. Rahman successfully took the challenges of engaging in cross-functional assignments, which refined his expertise in various areas like corporate affairs, finance, audit, legal, corporate governance, stakeholder management, intellectual property rights, land management, corporate banking, records management and public affairs. Apart from his diverse role as Head of Public Affairs & Company Secretary, he is also Secretary of the Audit Committee, Board CSR Committee, Nomination and Remuneration Committee (NRC) and different Trust Funds of BATB. Rahman obtained his Masterâ&#x20AC;&#x2122;s degree in Accounting from the University of Dhaka. He then completed Chartered Accountancy course at ICAB. Rahman is an elected Council Member of ICSB. He was the Chairman of Audit Committee and Seminar & Conference Committee and also member of different sub-committees of the of ICSB. As a resource person of corporate affairs, he conducts various professional management courses for professionals as well as delivers lecture on corporate affairs and companyâ&#x20AC;&#x2122;s good governance in professional seminars & symposiums in different educational and professional institutes. He is Vice-Chairman of IP Committee of FBCCI and the Director General of Intellectual Property Association of Bangladesh (IPAB). Rahman is also a director of recently established Prerona Foundationa non-profitable welfare organization.

12 | July-September 2019

PROFILE Mohammad Nurul Alam FCS Mohammad Nurul Alam FCS is the Deputy Managing Director & Company Secretary in Prime Islami Life Insurance Ltd since 2nd October 2019. Prior to joining Prime Islami Life Insurance he worked as the Country Ethics & Compliance Officer of VEON Ltd (an International Telecommunications service providers headquartered in the Netherlands) and was responsible for VEONâ&#x20AC;&#x2122;s Bangladesh subsidiary Banglalink Digital Communications Ltd as Chief Ethics & Compliance Officer. He served in Banglalink for twelve years in the Management level as Chief Compliance Officer, Head of Internal Audit and Company Secretary. Before that he worked in GlaxoSmithKline Bangladesh Limited a multinational Pharmaceutical manufacturing and marketing company for more than 26 years. Alam did his Masters in Accounting in 1994 from the University of Chittagong. He is a Fellow Member of ICSB, elected Council Member of Institute of Chartered Secretaries of Bangladesh (ICSB) in 2019 and appointed Chairman of Secretarial Practice Assurance Committee. He obtained the global certification Certified Compliance & Ethics Professional- International (CCEP-I) from the Society of Corporate Compliance & Ethics, SCCE, USA in 2017. Alam elected as the Secretary General and member in the Board of Governors of the Institute of Internal Auditors Bangladesh on 24.8.2019 for the term till 31 July 2022. He has been elected as Global Assembly Member of the Institute of Internal Auditors Global for two years from January 2020 till 31 December 2021. Alam appointed as Director in the board of directors of Prime Islami Securities Ltd on 14.11.2019.

Md. Sharif Hasan FCS Md. Sharif Hasan earned his BBA and MBA degrees specializing in Human Resources Management from the University of Dhaka. Later, he obtained Bachelor of Law degree from the National University. He is both Chartered Secretary and HR professional by profession. He is a Fellow Member of the Institute. He was the member secretary of the Chartered Secretary Regulations Sub Committee for the term of 2016-2019. He worked in different sub committees of the Institute. Md. Sharif Hasan is the Company Secretary and Chief Compliance Officer of Unique Hotel & Resorts Limited (Owner of the Westin Dhaka) and Unique Group since February 2015. Md. Sharif Hasan also served at Pubali Bank Limited as Assistant Company Secretary and Pubali Bank Securities Limited on deputation. He attended various training programs , seminars and workshops on different aspect of Banking and Capital Market, Company Law, Corporate Governance, Secretarial Audit, Corporate Management & Leadership, Labor Law, IFRS, Career Management etc. both at home and abroad. He was also the adjunct faculty of the Institute of Chartered Secretaries of Bangladesh (ICSB) and part time faculty member of the UPDATE College of Hospitality Management. Md. SharifHasan is a life time member of the Dhaka University Alumni Association and Dhaka University registered graduate. Md. SharifHasan is also a standing committee member of Dhaka Chamber of Commerce and Industry (DCCI) and member of the Bangladesh Association of Publicly Listed Companies (BAPLC) representing Unique Hotel & Resorts Limited.

July-September 2019 | 13

Md. Shafiqul Alam ACS Md. Shafiqul Alam is an accomplished finance professional with over 16 yearsâ&#x20AC;&#x2122; experiences in different industries in senior position. He is currently Principal & CEO, Shafiqul Alam & Co., Chartered Accountants Firm, Sponsor Director, Bizz Solutions Ltd., Finance Advisor, Super Star Group (SSG). Previously he was Group Director Finance and Company Secretary of Super Star Group (SSG). His previous executive position was Group Chief Financial Officer (GCFO) at Kallol Group of Companies. He also worked with Rahim Afrooz Bangladesh Ltd., Shanta Holding Limited, A. Qasem & Co. in various management positions. He is also the Founder and President of The CFO Foundation of Bangladesh, a non-profit organization. Shafiq has proven track record as a leader of the transformation, change management and business development with integrity as well. For his excellent performance and contribution toward the growth of company and the industry for last 16 years, Shafiq is the winner of the Chief Financial Officer Award 2017 by the World HRD Congress. Being a public speaker and a media personality, he attended several TV talk shows. Shafiq is a frequent writer in the national English and Bengali dailies, and deliver lecturer on Finance to ICMAB, ICAB, IBA, DU and some other private universities. Shafiq earned his Master degree in International Business from the University of Dhaka and a Bachelor in Accounting from National University. He is a fellow member of the Institute of Chartered Accountant of Bangladesh (ICAB), Institute of Cost & Management Accountants of Bangladesh (ICMAB), and an associate member of the Institute of Chartered Secretaries of Bangladesh (ICSB), among others. Shafiqul is an LL.B graduate as well, and serving actively with Junior Chamber Bangladesh and past President of JCI Dhaka Achievers, Bangladesh.

Md. Shakhawat Hossain, Additional Secretary, MoC, GoB Md. Shakhawat Hossain, a career civil servant obtained his B.Sc (Hon's) and M.Sc in Geography. Later he did his Post Graduate Diploma in Governance Studies. At present he works for the Ministry of Commerce as Additional Secretary. Hossain started his service career as Assistant Commissioner in 1991. During this period, being a member of Bangladesh Administrative Service, he worked both Secretariat and Field Administration in various capacities such as Joint Secretary, Ministry of Health and Family Welfare; Director (Administration), Bangladesh Television; Deputy Commissioner, Jhalokathi; Deputy Secretary, Ministry of Environment and Forests; Additional Deputy Commissioner, Noakhali; Senior Assistant Secretary, Ministry of Education etc. He visited nearly 25 countries including USA, UK, France, SA, Italy, Fiji, Turkmenistan, Switzerland, Germany, Turkey, Netherlands, South Korea, Belgium etc. to attend different seminars, workshops and training programs.

14 | July-September 2019

PROFILE Mohammad Manzarul Mannan, Joint Secretary, GoB Mohammad Manzarul Mannan is a civil servant holding the post of Joint Secretary in Finance Division, Ministry of Finance, Government of the Peopleâ&#x20AC;&#x2122;s Republic of Bangladesh. Mannan obtained his BSS (Honors) in 1988 and MSS in 1989 in Economics from the University of Chittagong. Mohammad Manzarul Mannan joined 15th batch of Bangladesh Civil Service in Administration cadre as Assistant Commissioner on December 2, 1995. Afterward, he was promoted to Senior Assistant Commissioner, NDC, Upazila Nirbahi Officer and Additional Deputy Commissioner. He also obtained Masters in Financial Economics from the University of Bradford, West Yorkshire, England. During his service career he received various national and international training and attended seminars and conferences at home and abroad.

Dr. Mohammad Mohiuddin, Joint Secretary, MoL, GoB Dr. Mohammad Mohiuddin is a civil servant holding the post of Joint Secretary in Legislative and Parliamentary Affairs Division, Ministry of Law, Justice and Parliamentary Affairs. He is also serving as Project Director to the Legislative Research and Reform for Promoting and Enforcing Non-discriminatory Laws and Policies Project. Dr. Mohiuddin obtained LL.B (Honours) degree in 1995 and LL.M degree with 1st Class 2nd Position in 1996 from Islamic University, Kushtia, Bangladesh. He awarded Ph.D. degree in 2013 from the same University. He also completed another Masters in International Maritime Law from International Maritime Law Institute (IMO), Malta and Internship from International Tribunal for the Law of the Sea, Hamburg, Germany. He is a Member of National Consumer Rights Protection Council, Directorate of National Consumer Rights Protection. He is also a Council Member of Institute of Cost and Management Accountants of Bangladesh. He is a Focal Person of (i) Implementation of Blue Economy Initiative, (ii) Istanbul Plan of Action-IPoA, (iii) Sustainable Development Goal and (iv)Clean Village â&#x20AC;&#x201C;Clean Town Initiative of the Legislative and Parliamentary Affairs Division. Dr. Mohiuddin is an Adjunct Faculty of the Department of Law and Justice of the Southeast University and other Private Universities of the country. He has published three books, five international research papers, more than nineteen articles. He has wide training exposure both at home and in abroad. He has participated and successfully completed the United Nations-Nippon Foundation Fellowship Programme (2010-2011) at the Division for Ocean Affairs and the Law of the Sea, Office of the Legal Affairs of the United Nations, New York, USA.

July-September 2019 | 15

Khandaker Kamaluzzaman, Commissioner, BSEC Khondoker Kamaluzzaman joined in Bangladesh Securities and Exchange Commission (BSEC) as Commissioner on October 12, 2017. He obtained his BA Honors in Law in 1979 and Masters (MLM) in 1980 from the University of Dhaka. After that he obtained the Membership of Bangladesh Bar Council in 1981 and became a legal practitioner. Khondoker Kamaluzzaman joined Bangladesh Civil Service (BCS) Cadre as Judge (Munsef) on July 17, 1983. Afterwards he was promoted to Senior Assistant Judge, Joint District and Sessions Judge, Additional District and Sessions Judge. While he was working as Deputy Solicitor/ Deputy Secretary in Law, Justice and Parliament Affairs Ministry in 2002, he was promoted as District Judge and joined Tribunal for crimes affecting public safety in Dhaka. After that he worked as Divisional Special Judge, Special Judge and District and Sessions Judge in Gopalgonj, Naoga and Sylhet respectively. After retiring from Judicial Service he enlisted as the lawyer of High Court Division of Supreme Court of Bangladesh. In the meantime, he became a Senior Teacher in the Department of Law, Bangabandhu Sheikh Mujibur Rahman Science and Technology University. During his service career he received training on judicial administration, foundation and others. He also participated in national and international seminars and conferences in home and abroad.

Md. Zakir Hossain, Registrar, Additional Secretary, RJSC, GoB Md. Zakir Hossain, Registrar (Additional Secretary) belong to Bangladesh Civil Service BCS (Audit and Accounts) 1984 Batch. He did MBA with the specialization of Finance and Banking. He did Diploma of Information Technology and Post Gradate Diploma on Financial Management from Masstricht School of Management (MSM), Netherlands. He has also participated various training including Super MAAT from Wolverhampton University, Improving Health System from Harvard University, Road Sector Development from Birmingham University, etc. Before Registrar of RJSC he rendered various important services in different ministries including ERD, Health and Family Welfare, Youth and Sports, Power, Energy and Mineral Resources Division.

16 | July-September 2019

INSTITUTE NEWS

INSTITUTE NEWS July-September 2019

INTERNAL MEETINGS Meetings of the Council and Standing Committees

Following meetings of the Council and Standing Committees were held during the (July-September 2019) quarter: •

The Council meetings were held on August 4 and September 17, 2019;

•

The Audit Committee meeting was held on July 8, 2019;

•

The Examination Committee meetings were held on July 21 and September 17, 2019; and

•

The Education Committee meeting was held on August 22, 2019.

Meetings of Sub Committees

Mohammad Sanaullah FCS, President of the Institute was the keynote speaker of the programme. He welcomed the bright students of American International University Bangladesh for participating in the session and discussed the necessity of professional degrees in addition to academic degrees for accelerating career success. He brieﬂy discussed CS course curriculum, classes, and examination system and membership process.

Following meetings of the Sub Committees were also held during the quarter: •

Professional Development Sub Committee meeting was held on July 3, 2019;

•

Journal and Publication Sub Committee meetings were held on July 17, August 7 and September 7, 2019; and

•

Company Law Review Sub Committee meeting was held on September 21, 2019.

Demonstration Programme to Promote Chartered Secretary Profession at American International University Bangladesh ICSB organized a demonstration programme on ‘Chartered Secretary as a Challenging Profession in the Corporate World’ for the students of Department of Accounting and Finance, American International University Bangladesh (AIUB) on July 13, 2019 in collaboration with the Department of Accounting and Finance, Faculty of Business Administration of AIUB.

Honorable Prof. Dr. Charles C Villanueva, Vice President (Academics) & Dean - FBA, AIUB graced the occasion as Session Chair. He thanked the President of ICSB for taking initiative to orient a challenging and rewarding profession to the students. He emphasized the importance of the Chartered Secretary profession. A good number of students and Faculty members were present in the program and participated spontaneously during the question and answer session.

July-September 2019 | 17

Demonstration Programme to Promote Chartered Secretary Profession at Jahangirnagar University

To promote Chartered Secretary profession, the Institute has organized a demonstration programme on ‘Chartered Secretary as a Challenging and Rewarding Profession in the Corporate World’ for the students of

necessity of professional degrees in addition to academic degrees for accelerating career success. He highlighted the prospects of Chartered Secretary profession in our country and abroad. He brieﬂy discussed CS course curriculum, classes and examination system and membership process. The programme was presided over by Nilanjan Kumar Saha, Dean, Faculty of Business Studies, Jahangirnagar University. He thanked President of ICSB for taking the initiative to orient a challenging and rewarding profession to the students. He also discussed the necessity of Good Corporate Governance in Bangladesh. Among others, Laizu Nasrin, Chairman, Dept. of English, Jahangirnagar University gave speech as special guest showed her interest on Chartered Secretary profession. Md. Awal Al Kabir, Associate Professor, Dept. of Management Studies, Jahangirnagar University was present as discussant in the programme. A good number of students and Faculty members were present in the program and participated spontaneously during the question and answer session. 9th Annual General Meeting

Jahangirnagar University on July 20, 2019 in collaboration with the Faculty of Business Studies, Jahangirnagar University. President of the Institute was the main speaker of the programme. He welcomed the bright students for participating in the session and discussed the

The 9th Annual General Meeting (AGM) of the Institute of Chartered Secretaries of Bangladesh (ICSB) was held on September 28, 2019, at the Grand Ball Room, Radisson Blu Dhaka Water Garden, Dhaka. Mohammad Sanaullah FCS, President of the Institute presided over the Meeting and presented the Council Report of the Institute. The Audited Financial Statements of the Institute for the year ended December 31, 2018 were

From Left: Secretary in Charge to the Council Md. Shamibur Rahman ACS, Council Members Gopal Chandra Debnath FCS, A. K. M. Mushfiqur Rahman FCS, Md. Azizur Rahman FCS, IPP Md. Asad Ullah FCS, Md. Shahid Farooqui FCS, Vice President Md. Selim Reza FCS, Senior Vice President Safiar Rahman FCS, President Mohammad Sanaullah FCS, Treasurer Nazmul Karim FCS, Past President Itrat Husain FCS, Mohammad Bul Hassan FCS, Md. Anwar Hossain Chowdhury FCS, Salim Ahmed FCS, Commissioner of BSEC Khondoker Kamaluzzaman, Joint Secretary of Finance Ministry Mohammad Manzarul Mannan, Registrar (Additional Secretary) of RJSC&F Md. Zakir Hossain was seen in the dais of 9th AGM

18 | July-September 2019

INSTITUTE NEWS Participants of the 9th Aunnal General Meeting of ICSB placed before the Members. The Members approved the Council Report and Financial Statements of the Institute. The meeting also appointed M/s. A. Qasem & Co. Chartered Accountants (EY Bangladesh) as the external auditor of the Institute for the year 2019. At the end of AGM, the fourth council election was held in a festive mode. The President in his speech highlighted the major activities and achievements of the Institute. Among them successfully holding of 5th ICSB National Award for Corporate Governance Excellence 2017, 7th National Convention of ICSB, 7th Convocation of ICSB, workshops, CPD seminars on Corporate Governance Code, Finance Act, 2018, National Budget and other relevant issues. He also thanked the Members for their valuable suggestions towards the development of the Institute. A large number of members were present in the meeting and appreciated the performance of the Institute and congratulated the 3rd Council for working successfully.

Senior Vice President, Safiar Rahman FCS and Vice President, Md. Selim Reza FCS, Council Members and Secretary in Charge of the Institute, Md. Shamibur Rahman ACS were also present at the meeting. 4th Council Election of ICSB Held Immediately after the 9th Annual General Meeting, the 4th Election to the Council of ICSB was held under the provision of the Chartered Secretaries Act 2010. Earlier to this, an Election Commission was constituted with Md. Mohashin FCS as Chairman, Md. Abdus Salam Khan FCS and Imrul Ahmed FCS as Members and Md. Hasan Kabir FCS as Returning Officer and Rulia Akhter as Assistant Returning Officer to conduct the election. A large number of Members of ICSB participated, exercised their voting rights and elected 13 Members of the Council of ICSB for the term 2019-2022.

Number of Members:

523 (Five hundred twenty three)

Number of Voters:

510 (Five hundred ten)

Number of Casted Ballot Papers:

425 (Four hundred twenty ﬁve)

Number of Rejected Ballot Papers:

3 (Three)

Reason for Rejection:

Excess or less votes casting or overwriting

Number of Valid Ballot Papers:

422 (Four hundred twenty two)

Number of accepted Casted Votes:

422 x 13 = 5,486

July-September 2019 | 19

Position First 13 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th Last 16 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th 28th 29th

Name of the Candidates

Membership No

Mohammad Bul Hassan FCS Muzaffar Ahmed FCS Md. Shaﬁqul Alam ACS Akhter Matin Chaudhury FCS Salim Ahmed FCS Mohammad Sanaullah FCS Itrat Husain FCS Md. Sharif Hasan FCS M. Naseemul Hye FCS Mohammad Asad Ullah FCS Md. Selim Reza FCS Mohammad Nurul Alam FCS Md. Azizur Rahman FCS

F-0113 F-0001 A-0419 F-0020 F-0119 F-0004 F-0009 F-0220 F-0056 F-0025 F-0067 F-0095 F-0063

302 300 263 261 255 253 244 240 232 223 219 210 205

Md. Anwar Hossain Chowdhury FCS Oli Kamal FCS Md. Shahid Farooqui FCS Nazmul Karim FCS A.K.M. Mushﬁqur Rahman FCS Md. Zahangir Alam Manik FCS Feroz Iqbal Faruque FCS Gopal Chandra Debnath FCS Md. Monirul Alam FCS Mohammad Shahajahan FCS Saﬁar Rahman FCS Md. Mokaddess Ali ACS S. Abdur Rashid FCS Mohammad Nurul Alam ACS Nasir Uddin ACS Badal Chandra Rajbangshi FCS

F-0117 F-0128 F-0037 F-0085 F-0097 F-0148 F-0030 F-0114 F-0069 F-0149 F-0038 A-0446 F-0104 A-0490 A-0372 F-0140

202 201 191 181 172 166 165 159 147 143 131 110 105 80 78 48 Total 5,486

44th Batch Inaugurated

Chartered

Secretary

Course

Institute of Chartered Secretaries of Bangladesh (ICSB) has organized an orientation program for the students of 44th Batch of Chartered Secretary Course at ICSB Campus, Dhaka on August 31, 2019. The programme was inaugurated by Mohammad Sanaullah FCS the President of the Institute.

Votes Obtained

history of ICSB and highlighted the prospects of the Chartered Secretary profession in Bangladesh. He also discussed the role of Chartered Secretaries in the corporate management and stakeholders’ expectations from the Chartered Secretary professionals. Gopal Chandra Debnath FCS, Council Member of the Institute advised the students to attend classes regularly and follow the rules and regulations of the Institute. Mohammad Sanuallah FCS, President of the Institute while inaugurating the programme by greeting students with his blessings and urged the students to strive for academic excellence, personal values and professionalism. He also emphasized the need for value addition, creativity and innovation in order to show excellence in the professional ﬁeld and to set a golden platform for the future generation.

Md. Selim Reza FCS, Vice President of ICSB welcomed the newly admitted students. He discussed the 21 years’

20 | July-September 2019

A good number of students were present in the program.

INSTITUTE NEWS

SUCCESS GREETINGS F-0095 Mohammad Nurul Alam FCS Mohammad Nurul Alam FCS a Fellow Member of the Institute joined Prime Islami Life Insurance Limited on October 10, 2019 as Deputy Managing Director and Company Secretary. Prior to this, he was Chief Ethics and Compliance OfďŹ cer of VEON Limited Bangladesh subsidiary of Banglalink Digital Communications Limited.

F-0120 Md. Samsul Alam Mallick FCS Md. Samsul Alam Mallick FCS elected as the President of Intellectual Property Association of Bangladesh (IPAB) for the tenure of 2019-21. Currently, he is working as the Managing Director of New Zealand Dairy Products Bangladesh Limited.

A-0386 Mohammed Mustafa Kamal ACS Mohammed Mustafa Kamal ACS an Associate Member of the Institute got an additional responsibility of Head of Corporate Affairs and Legal of Paradise Group on September 1, 2019. He is the Company Secretary of the same organization.

A-0413 Ripon Chandra Mazumder ACS Ripon Chandra Mazumder ACS an Associate Member of the Institute promoted to the position of Company Secretary on October 20, 2019 in MTB Securities Limited (A Mutual Trust Bank Company). Prior to this, he was Accounts in Charge of the same organization.

A-0495 Benoy Paul ACS Benoy Paul ACS an Associate Member of the Institute promoted to the position of Company Secretary on August 20, 2019 in Monno Jute StaďŹ&#x201A;lers Limited. Prior to this, he was Deputy General Manager (Share) of Monno Ceramic Industries Limited.

A-0496 Mohammad Salah Uddin ACS Mohammad Salah Uddin ACS an Associate Member of the Institute promoted to Assistant Vice President and Head of Risk Management Division (RMD) on July 1, 2019 in Union Bank Limited. Prior to this, he was First Assistant Vice President and Head of Risk Management Division (RMD) of the same organization.

July-September 2019 | 21

ICSB is pleased to inform you that the following four members of the Institute has been selected as VAT Agent by the National Board of Revenue (NBR) for the first time in Bangladesh.

F-0183

Jayanta Kumar Podder FCS

A-0392

Hadisul Alam ACS

RESULT OF THE CHARTERED SECRETARY (CS) EXAMINATION, JULY 2019 The Council of the Institute of Chartered Secretaries of Bangladesh (ICSB) in its meeting held on September 17, 2019 has announced the results of the Chartered Secretary examination, July 2019.

A-0420

Md. Salahuddin ACS

A-0540

Sheikh Azizul Haque ACS

C.S. Professional Level- II Roll Numbers and Name

01 P-052 Md. Hasan Imam Siddiki

Roll numbers of the successful candidates are as follows: CS Executive Level-I:

02 P-054 Md. Anower Hossin

001, 007, 008, 011, 012, 017, 018, 022, 024, 026, 027, 028, 032, 034, 038, 039, 040, 042, 046, 050, 056, 061, 066, 068, 071 and 075.

03 P-055 Nijam Kazi

Total – 26 (Twenty Six) CS Executive Level-II:

04 P-067 Md. Ashiqur Rahman

075, 077, 080, 081, 086, 089, 090, 093, 094, 095, 097, 098, 108, 113, 116, 121, 122, 126, 127, 129, 130, 131 and 134.

05 P-074 Bireswar Debnath

Total – 23 (Twenty Three) CS Executive Level-III:

06 P-075 Sheikh Sazzadur Rahman

138, 139, 143, 144, 145, 148, 150, 151, 152, 153, 159, 160, 162, 164, 165, 172, 175, 185, 187, 193, 194, 196, 199 and 203. Total – 24 (Twenty Four) CS Professional Level-I:

07 P-078 Md. Abdur Rahim

08 P-080 Dipongkor Dutta

003, 004, 006, 011, 022, 027, 032, 033, 035, 041, 044, 048 and 050. Total – 13 (Thirteen)

22 | July-September 2019

09 P-085 Md. Taukir Ahmed Bhuiyan

CS-2517 Md. Ashiqur Rahman

CS-2642 Md. Taukir Ahmed Bhuiyan

CS-3256 Dipongkor Dutta

CS-3666 Bireswar Debnath

CS-3960 Md. Anower Hossin

CS-3981 Md. Abdur Rahim

CS-4039 Md. Hasan Imam Siddiki

CS-4098 Nijam Kazi

CS-4151 Sheikh Sazzadur Rahman

July-September 2019 | 23

INSTITUTE NEWS

During the 3rd Quarter of 2019 the Following Students were Passed the C.S. Professional Level- II Examination

ICSB has Agreement with following Hospitals

Labaid Limited

CARe Medical College & Hospital Ltd.

Obaidullah Al Masud M Abdullah Khan (In Charge & Sr. Mannager) 01766 662778 (Genaral Manager) 01678 444333 Labaid Specialized Hospital: 1/5, Block-B, Mohammadpur Housing Estate, House-6, Road-4, Dhanmondi, College Gate, Mirpur Road, Dhaka-1207 Dhaka-1205

Central Hospital Ltd.

Didarul Islam Perves (Company Secretary) 01778 490207 House: 2, Road: 5, Green Road, Dhanmondi, Dhaka-1205

Bangladesh Specialized Hospital (BSH) Md Jahidur Rahman (Sr. Asst. Manager) 01313 777888 21, Shyamoli, Mirpur Road, Dhaka-1207

BRB Hospital

Mohammad Nizamul Islam (Manager, Bussiness Development) 01713 150466 77/A, East Rajabazar, West Panthapath, Dhaka-1215

24 | July-September 2019

INSTITUTE NEWS

Members, students, employees will show ID card of ICSB & the dependents will take and show a recommandation letter of ICSB. Benefits applicable to members, students, employees of ICSB and their dependets ( Spouse, Children & Parents).

Benefits

CARe Medical College & Hospital Ltd. (M Abdullah Khan 01678 444333) *25% Discount on all pathological & biochemistry investigations. *25% Discount on X-ray, Ultra-Sonogram, ECG, Echo and ETT Investigation. *25% Discount on CT Scan, MRI *10% Discount on Bed Charges while the patients are admitted.

Labaid Limited (Obaidullah Al Masud 01766 662778) *20% Discount on all pathological & biochemistry investigations. 10% Discount on X-ray, CT Scan & MRI, Ultra-Sonogram, ECG, Echo and ETT Investigations. (Not applicable for the patient who will be admitted at Cardiac Hospital or Specialized Hospital) 05% Discount on bed charges while patients are admitted in Cardiac Hospital or Labaid Hospital.

Central Hospital Ltd. (Didarul Islam Parvez 01778 490207) *25% Discount on all kinds of pathological investigation (Blood, Urine etc.) *10% Discount on Radiology & Imaging (X-Ray, CT Scan, Endoscopy, ECG etc.) *20% Discount on Histopathology. *10% Discount on Hospital Bed Rent.

Bangladesh Specialized Hospital (BSH) (Zahid 01313 777888) OPD Services:*25% Discount on all pathological and biochemistry investigations. *15% Discount on X-Ray, CT Scan, MRI, ECG, Ultra-Sonogram, Echo and ETT. IPD Services*10% Discount on all pathological and biochemistry investigations. *15% Discount on X-Ray, CT Scan, MRI, ECG, Ultra-Sonogram, Echo and ETT. *10% Discount on bed charges while patients are admitted in BSHL.

BRB Hospital (Mohammad Nizamul Islam 01713 150 466) *20%Discount om all kinds of pathological investigation. *15% Discount on all kinds of Radiology & Imaging Investigation (excluding Doctorâ&#x20AC;&#x2122;s fee). *10% Discount on room rent in case of admitted patients

July-September 2019 | 25

ICSB has Agreement with following Hospitals

The Ibn Sina Trust

Hadiul Karim (In Charge Corporate Marketing) 01313 095895 House: 48, Road: 9/A, Dhanmondi, Dhaka-1209

United Hospital Limited

Syed Asraful Momen (In- Charge Marketing) 01914 001403 Plot 15, Road 71,Gulshan, Dhaka-1212 Bangladesh

Insaf Barakah Kidney & General Hospital Ltd.

Md Altaf Hossian (Deputy Managing Direector) 01711 675551 11 Shahid Tajuddin Ahmed Sharoni, Mogbazar, Dhaka-1217

Square Hospital

Mark 01756 805519 18/F, Bir Uttam Qazi Nuruzzaman Sarak, West Panthapath, Dhaka 1205

Anwar Khan Modern Hospital Ltd. Dhiraj Chakma (Genaral Manager corporate) 01719 066167 House # 17,Road # 8,Dhanmondi R/A. Dhaka-1205

26 | July-September 2019

INSTITUTE NEWS

Benefits

The Ibn Sina Trust (Hadiul Karim 01313 095895) *35% Discount on all kinds of pathological tests. *30% Discount on PCR tests. *30% Discount all kinds of Radiological and Imaging tests. *10% Discount on dental services

Insaf Barakah Kidney & General Hospital Ltd. (Altaf Hossian 01711 675551) *40% Discount on all kinds of Pathological Examination for outdoor patients. *35% Discount on all kinds of Imaging Examination (CT Scan, X-ray, Ultra Sonogram) for outdoor patients. *10% Discount on Hospital Bed rent and service charge. *10% Discount on ICU bed charge. *10% Discount on Emergency fees (Outdoor patients) *10% Discount on Dental and Physiotherapy charges. *06% Discount on all kinds of Bangladeshi Medicine in general.

United Hospital Limited (Md. Asraful Momen 01914 001403) *20% Discount on Pathological Tests. *10% Discount on Diagnostic Test carried out in UHL Radiology & Imaging Center. *05% Discount on UHL Cabin rate.

Square Hospital ( Mark 01756 805519)

*07% Discount on hospital standard tariff.

Anwar Khan Modern Hospital Ltd. (Dhiraj Barua 01719 066167)

*25% Discount on Pathological Tests. *10% Discount on MRT, CT Scan *Tk. 100/- (One Hundred) only Discount for X-Ray & Ultra Sonogram each. *10% Discount on Angiogram, Color Doppler ETT, EEG, Endoscopy, Bronchoscope. *10% Discount on Hospital Bed. .

July-September 2019 | 27

Articles July-September 2019

ARTICLE

CORPORATE GOVERNANCE AND ROLE OF CS PROFESSIONALS Bipul Kumar Bhowmik FCS

he purpose of corporate governance is to facilitate effective, entrepreneurial and prudent management that can deliver the long-term success of the company. Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. Corporate governance is therefore about what the board of a company does and how it sets the values of the company, and it is to be distinguished from the day to day operational management of the company by full-time executives. In Bangladesh for listed companies’ corporate governance it is part of the legal system as the BSEC Corporate Governance Code applies to since February 2006 and, as a result of the new listing regime introduced applies to all companies with a listing of equity shares regardless of whether they are incorporated in Bangladesh or elsewhere. But good governance can have wider impacts to the non-listed sector because it is fundamentally about improving transparency and accountability within existing systems. One of the interesting developments in the last few years has been the way in which the ‘corporate’ governance label has been used to describe governance and accountability issues beyond the corporate sector. This can be confusing and misleading as Corporate Governance in Bangladesh has been built and developed to deal with the governance of listed company entities and not designed to cover all organizational types that may have different accountability structures. Many studies conclude that well governed companies perform better in commercial terms.

We know that a distinguish mark of a profession is depicted by way of acceptance of its responsibility to the public whereas public acceptance is reflected by way of recognition of the profession in the regulatory framework. So, a professional corporate secretary should act in a manner consistent with the good reputation of the profession and refrain from any conduct which might bring discredit to the profession. The goal of chartered secretary education and practical experiences is to produce competent professional corporate secretaries capable of making a positive contribution over their lifetimes to the profession and society in which they work. In the context of Corporate Governance system, ministerial and administrative roles and strategic functions of corporate secretaries will protect the interests of all the stakeholders. At present, it is visible and crystal clear in general that recognition as well as proper application of the professional services of chartered/company secretaries under the umbrella of legislative framework will enhance corporate as well as national economic development. Proper governance of the affairs of any organization is of paramount importance. Such organizations, both in the private sector or public sector, be it a statutory body under any specific legislation or under the Companies Act, 1994, are to be managed properly by the Board of Directors by adhering to the prescribed rules, regulations, prudent systems & procedures and carrying out business dealings in a transparent manner. It is indeed an arduous task for the Board of Directors to see that not only the shareholders, but also the other stakeholders, viz. the customers, suppliers, investors, employees and the society at large, are benefited by the result of excellent management practices, so as to justify the survival and sustenance of the organization. The functions of a company secretary, being a principal compliance officer and/or chief governance professional of the organization as well, in the corporate sector, is crucial, since he acts as a facilitator in the entire corporate management process, to ensure that

July-September 2019 | 29

the corporate entity is run on sound management principles and practices. Company secretary occupy a pivotal position in ensuring that his/her company function in certain critical areas and such functions are value based. While accounting could be properly described as a mirror reflecting the entire face of the company and auditing could be considered as the function that adds credibility to what are stated in the financial statements. Company secretaries should function as conscience keepers. It is this role that would earn them an enviable position. In this respect, presence of legislative provisions in detail within the regulatory framework is essentially needed so that company secretaries can become more effective in their versatile roles under the statue. This need has become even more acute in the light of the demand for the better corporate governance and increasing expectations of shareholders, directors, regulators as well as other stakeholders. In all corporate laws, a company secretary has been recognized to be a very responsible position. In today’s corporate world, normal business activities in both private and public companies are subject to a web of various laws and regulations. This is more important for publicly listed companies whose continued listing on an exchange is subject to on-going compliance with the listing regulations, disclosure of relevant and fundamental information to the auditor, regulatory bodies and others like Securities and Exchange Commission (SEC), Registrar of Joint Stock Companies, National Board of Revenue, Bangladesh Bank, Stock Exchange, Bangladesh Investment Development Authority, Director of Labor, Inspector of Factories so on and so forth. The secretary acts as a facilitator and conscience keeper of the Board rather than an amanuensis of the Directors who are primarily responsible for the acts of the company. The person other than the directors who is statutorily authorized to enter into the board room and to take part in the meeting is none other than the company secretary. The Companies Act-1994 has authorized the company secretary to sign various forms, statements, returns and documents along with the directors. In Initial Public Offering (IPO) process as well as in getting the securities listed, the company secretary has to play very vital role. Furthermore, Securities and Exchange Commission’s (SEC) notification dated 20th February 2006 identifies top three management position of a company other than the Directors included the Company secretary.

30 | July-September 2019

It is stated that “company secretary is a watchdog of the national economy, a custodian of public interest in large scale enterprises, a prime-mover of the organizations’ activities, a representative of employees and a crucial link between those who finally decide and those who actually perform”. It is also stated that “companies which do not give full scope to the company secretary to function effectively are surely denying themselves the contribution which a company secretary can make.” The company secretary’s responsibility is mostly constituted by the Companies Act. That is why this position is also called the constitutional position. Globally the Company Law of most of the Commonwealth countries makes it mandatory to appoint company secretaries for limited companies with an objective to ensure that the Board of Directors fulfill their statutory requirements and meet the demanding standards of corporate governance in their respective companies. London Stock Exchange has recognized the company secretary as an officer with a central role in the governance and administration of company affairs. The Principles of Good Governance and Code of Best Practices (the Combined Code) U.K. mentioned that: “all directors should have access to the advice and services of the company secretary, who is responsible to the Board for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. Any question of the removal of the company secretary should be a matter for the Board as a whole”. A stated in the above Code Provision, all directors, whether executive or non-executive, should have equal access to the advice and services of the company secretary. It is important that the company secretary should always be mindful of his/her responsibility towards the board as a whole and his/her duty to give fair and impartial advice to all directors under all circumstances. In addition to the role as an advisor to the board of directors regarding the compliance with the board procedures, relevant laws and regulations, the company secretary also plays a pivotal role in ensuring that good corporate governance practices are put in place within the company. The UK Combined Code (June 2006) provides as a supporting principle that:-

ARTICLE “The company secretary should be responsible for advising the board through the chairman on all governance maters.” Apart from the advisory role in compliance with board procedures, laws and regulations and the promotion of good corporate governance, the UK Combined Code further provides as a supporting principle that:“Under the direction of the Chairman, the company secretary’s responsibilities include ensuring good information flows within the board and its committees and between senior management and non-executive directors, as well as facilitating induction and assisting with professional development as required.” If we review the above, it is also clear that the company secretary plays an important role in corporate management. As a result, better corporate governance will ensure better as well as sustainable economic development. So not only incorporation of regulatory provisions into the statue but also its effective implementation will enable the company secretary who has wide-ranging responsibilities under the statue as a senior corporate executive to serve as the focal point for communications with the Board, the company and the stakeholders in a harmonized and more convenient manner. By way of this process, corporate world will contribute to a great extent to the development of the national economy. Considering the contribution of company secretaries having strong legislative support, in India, Reserve Bank of India (RBI), recognize the role of company secretaries in the following manner (RBI circular No.: DBOD.No.BC.116/08.139.001/2001-02 dated June 20, 2002): “……..company secretary has important fiduciary and company law responsibilities. The Company secretary is the nodal point for the Board to get feedback on the status of compliance by the organization in regard to provisions of the company law, listing agreement, Security and Exchange Board of India (SEBI) regulations, shareholder grievances, etc. in view of the important role performed by the company secretary vis-à-vis the functioning of the Boards of the Banks as also in the context of some of the public sector having made public issue it may be necessary to have company secretary for these banks also. Bank should therefore consider appointing qualified company secretary as the

secretary to the Board and have a Compliance Officer (reporting to the Secretary) for ensuring compliance with various regulatory/accounting requirements”. The role of company secretary continues to undergo major changes. Company secretary is not only involved with compliance management functions but also have more strategic functions. He has become value adding member of management teams, creating information vital for enhancing operational excellence and for formulating and implementing of new strategies. Every company secretary is expected to adhere not only to the letter of the law as enunciated in statutory tones, but also ensure that the spirit of the law is upheld; this is particularly true in the case of practicing company secretaries. It is not merely a question of maintaining a basic standard of services rendered by a practicing company secretary, but also keeping track of the changing needs of the profession, enhancement in the standards of services with the growing expectations from the users, etc. On the other hand, Government is benefited by way of contribution by the corporate Citizens as result of better professional practices. So, we strongly realize that regulatory framework for this profession will obviously facilitate to bring better understanding of the end results among the recipients of the services and it will stimulate the achievement of sustainable growth of the profession through ensuring value for money and best values to the stakeholders. Today’s company secretaries are no longer mere company law officers, their role has metamorphosed over the years with changing requirements of various corporate laws and they occupy a more independent and significant in the corporate enterprises. Company secretaries are destined to reach stratosphere of achievements and success. Keep one cardinal principle in mind all the time, “Be a creative secretary, never just be a compliance secretary.” Company secretary’s functions encompass a wide spectrum of duties and responsibilities, which, if laid down, would be a never ending list. The Companies Act is not expected to cover all the minute details of the functions of company secretary. On the other hand the importance of secretarial functions in true line and spirit need to be considered with most priority. Company secretaries by virtue of their in depth knowledge in multifarious corporate and related laws, as well as finance and management disciplines and their

July-September 2019 | 31

professional training, are entrusted with several key functions in the companies and the functions of company secretary are gradually being standardized by the Institute from national perspective.

strategic corporate professional. He/she should look forward to occupy the driverâ&#x20AC;&#x2122;s seat instead of being contended with playing the role of co-passenger in a motor rally.

The economic and industrial liberalization measures are providing challenging and promising opportunities to the profession of company secretaries. To expedite the essentiality of this profession to the next level in light of recognition from the Government authorities, updating themselves, competing with other professions, globalizations are few challenges which company secretaries are facing today. A company secretary provides all inputs, support and assistance to a company in its growth. And company growth in another way provides inputs to the growth of the national economy. With the growth of the Bangladesh economy, and the setting up of new ventures and business enterprises, the opportunities for company secretary have increased manifold. Thus what is required is to reposition the profession of the company secretary, from traditional company secretary to

Finally, I would like to conclude by addressing the Instituteâ&#x20AC;&#x2122;s mission to develop, equip and promote chartered secretary profession by maintaining the highest professional standards of its members in order to enable them to provide better services to the society. The Institute is entrusted with the formulation and implementation of national secretarial standards and thus to help Bangladesh Corporatism become an arena of Better Corporate Governance by promoting and regulating the corporate/company secretary profession to enhance economic competitiveness and quality of corporate life.

32 | July-September 2019

Âť About the Author Fellow Member of the Institute

ARTICLE

THE CHARTERED SECRETARY AS THE GOVERNANCE PROFESSIONAL AND THE ROLE OF ICSB Mohammad Shahajahan FCS

ntroduction

As the world becomes more complex in the modern era, professional discipline, organizational transparency and strong codes of conduct or ethical behaviors becomes indispensable for ensuring corporate governance within the organizations. Global financial crisis and corporate scandals suggested the highest importance on the good governance within the companies to avoid havoc with the economy and to relieve from the pains, sufferings and insecurity of the society. The Chartered Secretary is a profession which enables to promote corporate governance excellence in the corporate world by employing their academic knowledge, skills and practices on professional standards for technical and ethical competence. This article aims to show how the Chartered Secretary profession (both corporate/ company secretary and chartered secretary in practice) is playing an important role as governance practitioner in corporate arena, both in international and Bangladesh perspective, to ensure good corporate governance. The article also aims to evaluate the role of the Institute of Chartered Secretaries of Bangladesh (ICSB) to promote corporate governance excellence in Bangladesh and finally, propose recommendations to make ICSB vibrant. Evolution of the Governance Professional Corporate Governance (CG) is not only mere comply of the rules, regulations and laws but it also encompasses the corporate best practice culture to comply with structures, policies and procedures of the organization for ensuring the interest of its stakeholders like shareholders, customers, employees, regulators and above all the environment. In early 1990’s following the corporate scandals, like Polly Peck International, corporate governance best practices were first introduced in UK. Cadbury Report 1992 highlighted the importance of CG by mentioning that CG is important not only to earn profits in a company but also to reform the corporate sector through environmental awareness and ethical behavior. CG started to gain momentum in early 2002 through the Sarbanes Oxley Act and the Corporate Responsibility Act of US; and CG became

obvious within the company after the occurrence of the global giant corporate ﬁnancial scandals like Enron and WorldCom. The Dodd-Frank Wall Street Reform and Consumer Protection Act, 2010 strengthened the role of whistleblowers protected under Sarbanes-Oxley Act. The increased and new regulations following the global ﬁnancial crisis and/or giant corporate scandals and emphasis on governance across all sectors and organizations throughout the world demanded for skilled governance professionals who can balance regulatory compliance with their organization’s commercial interests, corporate values and corporate social responsibilities; and it is anticipated that this demand would remain high for decades. The Chartered Professional

Secretary

the

Governance

Many countries are introducing the position of the Corporate/ Company Secretary, by law or through regulations, standards, or codes of corporate governance. Over the last decade, Corporate/ Company Secretary’s role has become strategic enabler rather than just a technical expert. An effective company secretary and/or governance professional need to enable the board to set and achieve the strategic objectives of the organization. Therefore, company secretary have to possess required mastery of specialist knowledge with strong ethical values, emotional intelligence and understanding of the organization and its wider environment. According to the Competency Framework for Governance Professionals designed by the Institute of Chartered Secretaries and Administrators (ICSA), UK the following twelve (12) competencies in three categories is required to become an effective Corporate/ Company Secretary: Understanding (What I know): a) Governance, b) Strategy and Culture, c) Regulation and Compliance, d) Finance and Risk Practice (What I do): a) Planning and Organizing, b) Advising and Recording, c) Inﬂuencing and Enabling, d) Anticipating and Solving

July-September 2019 | 33

Values (What I believe): a) Doing the right things, b) Maintaining the independence, c) Being open-minded, d) Being purposeful. The Competency Framework for Governance Professionals of ICSA also recognizes four levels of proficiency in competencies: 1. Entry level: work on process and research-led activities, i.e. administrative and organizational tasks supporting the team work of the team which are largely supervised by others. 2. Emerging level: trusted to work independently on a portfolio of activities i.e. leading on specific initiatives and take responsibility for the activities of others. 3. Established level: have mastery in their work, trusted advisers and leaders, i.e. exercise good judgment across planned and unplanned situations. 4. Excelling level: play a valued part in strategic leadership, influence the governance agenda, frequently consulted and actively support the development of other governance professionals. These levels of proficiency help the practitioners to define which levels they have achieved in different areas of competency, and work to fill gaps in their development or to plan their move from one level of proficiency to the next level(s). It also offers a benchmark for: 1) HR recruiter for assessing the competency level of potential governance professionals and 2) the governance firm and the governance professional institute for assessing the governance capability of their organization as well as their students. The person who reached at the excelling level with activities and achievements are likely to be recognized and rewarded as an ideal company secretary or governance professional. ICSA’s new designation of Chartered Governance Professional and/or Chartered Secretary designation recognizes this. It is also noted that some additional activities like responsibility for data protection, the Human Resources, facilities functions, health and safety and the oversight of strategic projects are included in the responsibilities of the can-do nature of company secretaries. Requirement of the networks and other external supporting resources may be depended on the nature of company secretary i.e. 1) company secretary work in in-house or professional service teams and 2) company secretary as sole governance professional in their workplace.

34 | July-September 2019

The Chartered Secretary as the Governance Professional: Bangladesh Perspective The Bangladesh capital market crash in 1996, repeated capital market crash in 2010 and pilfering in banking sector in Bangladesh (i.e. Hallmark-Sonali Bank Loan Scam, 2010-12; BASIC Bank Scam, 2009-12, Bangladesh Bank Reserve stolen, 2016; etc.) were taken place due to lack of due diligence in administrative and financial processes and non-compliance of corporate ethical behavior within the companies in Bangladesh. To elevate corporate governance scenario in Bangladesh, the then Securities and Exchange Commission (SEC) first issued the Corporate Governance Guidelines (CGG) as the ‘comply or explain’ basis through a notification dated 20 February 2006. This is the beginning of the separate regulation on corporate governance in Bangladesh for listed companies. The CGG of 2006 was replaced by a new notification of Bangladesh Securities and Exchange Commission (BSEC) dated 07 August 2012 to be complied with by 31 December 2012 as mandatory ‘comply’ basis. The CGG of 2012 was amended by notification dated 21 July 2013 to impose one restriction on engaging external/ statutory compliance of corporate governance and the compliance of CGG was made compulsory in case of rights issue from 18 August 2013 and for initial public offering (IPO) from 28 December 2015. BSEC issued Corporate Governance Code, 2018 as the ‘comply’ basis in order to enhance the corporate governance in the greater interest of investors and capital market. There are nine conditions in Corporate Governance Code, 2018: 1) Board of Directors, 2) Governance of Board of Directors of Subsidiary Company; 3) Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal Audit and Compliance (HIAC) and Company Secretary (CS); 4) Board of Directors’ Committee; 5) Audit Committee; 6) Nomination and Remuneration Committee (NRC); 7) External or Statutory Auditors; 8) Maintaining a website by the Company; and 9) Reporting and Compliance of Corporate Governance. These nine conditions or codes are being imposed to comply by the listed companies in accordance with the condition no. 9 where Chartered Secretary in practice, as governance professional, is empowered to certify yearly the performance of the company in complying the conditions of the Corporate Governance Code and such certification should mandatorily be disclosed in the Annual Report. As mentioned in the Corporate Governance Code, the qualified chartered secretary in Bangladesh is working as company secretary in the

ARTICLE listed companies to enable the board to set and achieve the strategic goals of the organization as well as to safeguard the interest of the stakeholders by complying the conditions of the corporate governance code. ICSB as Governance Professional Body and its Forward Looking Professional body is a society, committee, task force or centre formed by a group of learned and expert people whose are termed as professionals. A professional body represents a profession when it is a body formally constituted for this purpose, and comprises significant numbers of practitioners in a defined field. Professional body remains dedicated to the advancement of the academic knowledge and practice of the profession through developing, representing, supporting, regulating and promoting professional standards for technical and ethical competence. Role of a professional body are: firstly, to safeguard the public interest which gives them their legitimacy; secondly, to represent the interest of the professional practitioners and act as a professional association or trade union (including legitimating restrictive practices), or as a learned society contributing to continuous professional development; and thirdly, act to maintain their own privileged and powerful position as a controlling body (Harvey. L and Mason. S, 1995). Therefore, a professional body is a group of people in a learned profession who are Sector/Companies

entrusted with maintaining control or oversight of the legitimate practice of the profession. Institute of Chartered Secretaries of Bangladesh (ICSB) is a governance professional body representing the Chartered Secretary profession in Bangladesh. ICSB established in 2010 under the Chartered Secretaries Act 2010, is a public institute for training of the Chartered Secretaries/ Company Secretaries in Bangladesh. It plays vital role through its learned and skilled members, both Corporate/ Company Secretary and Chartered Secretary in practice, to safeguard the interest of different stakeholders of the companies which is legitimized by the law of the country. It also plays role to safeguard the interest of the Chartered Secretary practitioners with providing licenses, oversight their professional practices, up-skilling them through CPD programs, workshop, seminars, etc. and controlling the Chartered Secretary profession as sole regulatory body in Bangladesh. Till to date 4747 students are being enrolled in different level of chartered secretary course of ICSB. As of now ICSB has 569 qualiﬁed chartered secretaries out of them 523 (212 Fellow and 311 Associate) learned and valued members who are deployed in different industries and charged with ensuring corporate governance excellence within the organizations. The remaining 46 qualiﬁed chartered secretaries are waiting to be members of the institute by complying the competency requirements of ICSB. The following table shows the distribution of the members of ICSB in different sector/companies: Fellow

Associate

Total

Banking and Non-Banking Financial Institutions

113

160

Professional Service & Consultancy

Pharmaceuticals, Food & Chemicals

Electronics & Engineering

Media, Telecommunication & IT

Service Sector

Insurance

Real Estate & Construction

Germents & Textiles

Power & Energy

Cement & Ceramics

Government Service

Development & Donor Agency

Leather & Tannery

Overseas

Miscellaneous

Grand Total

212

311

523

July-September 2019 | 35

ICSB is also continuing its endeavors to promote corporate governance excellence through introducing the National Award for Corporate Governance Excellence every year for the best performance of the corporate bodies in complying corporate governance code/ guidelines since 2014. As the market become competitive, where strong rivals are existed and trying to snatch the share of bread, the Institute of Chartered Secretaries of Bangladesh has scope to address the following emerging issues for improving and sustaining the CS profession in Bangladesh: a. The synchronization of the Chartered Secretaries Act, 2010 with other relevant corporate laws, securities laws and regulations and regulatory rules needs to be established; b. Up-skilling its members with the proﬁciency of the required competences as well as recent corporate inventions and updates like artiﬁcial intelligence, emotional intelligence, Blockchain, Internet of Things (IoT), BigData Analysis, Business informatics and transformations, etc.; c. Ensure Professional Governance;

Governance

d. More awareness programs governance in corporate bodies;

and

corporate

e. Promote Chartered Secretary in practice for wide coverage of the secretarial audit; f.

Promote research and publications on corporate governance and corporate inventions;

g. Afﬁliation with national and international educational and professional bodies; h. Multiple professional relationships with business leaders and liaise with public administrations. Conclusion Globally the Chartered Secretary is a recognized profession to play the role as company/ corporate secretary. They have relevant competencies to work as governance professional to enhance the corporate governance in the companies for achieving the business’s commercial interest, safeguarding the interest of stakeholders, creating corporate values and ensuring corporate social responsibilities. Following the global ﬁnancial crisis and giant corporate scandals, the increased and new regulations and emphasis on governance across all sectors and organizations throughout the world demanded for skilled governance professionals like chartered secretaries; and it is anticipated that this demand will be remained high for decades. Therefore, professional bodies like Institute of Chartered Secretaries of

36 | July-September 2019

Bangladesh is producing learned governance professionals. But the time bound requirement is that ICSB have to continue its endeavors to up-skill its members with the proficiency of the required competences as well as recent corporate inventions and updates like artificial intelligence, emotional intelligence, Blockchain, Internet of Things (IoT), BigData Analysis, Business informatics and transformations, etc. Synchronization of legal framework with other relevant laws, rules and regulations, professional governance and IT governance, awareness programs on CG, wide coverage of secretarial audit, negotiations and affiliation, relationships with business leaders and liaise with public sector leaders should positively be considered by the newly elected council of ICSB to avoid the professional rivalry and sustain the CS profession in Bangladesh. References 1. BSEC, 2006, Guidelines

2012:Corporate

Governance

2. BSEC, 2018: Corporate Governance Code 3. ICSA, 2018: The Competency Framework for Governance Professionals 4. ICSB Website, Members Directory 5. IFC, 2016: The Corporate Governance Professional

Secretary:

The

6. Lee, J, 2017: The corporate governance officer as a transformed role of the company secretary: An international comparison, South Carolina Journal of International Law and Business. 7. Harvey.L and Mason. S, 1995: The Role of Professional Bodies in Higher Education Quality Monitoring 8. S. Chandrasekaran, 2016: Corporate governance and the role of professionals under the Companies Act, 2013 9. S.K. Bala, 2018: Corporate Governance Code 2018 in Bangladesh: Reforms and Revisions 10. The Society of Corporate Secretaries and Governance Professionals, 2013: The Corporate Secretary: An Overview of Duties and Responsibilities

» About the Author Fellow Member of the Institute

ARTICLE

GOVERNANCE, TAX COMPLIANCE AND TAX PROFESSIONALS’ ROLE Dr. Sams Uddin Ahmed

bstract

The paper argues that inter alia, fiscal capacity of the state is imperative for good governance. Fiscal capacity, on the other hand, depends on the efficient collection of tax revenue. Collection of tax revenue depends on many factors. One of the important factors of tax compliance is the tax professional’s role. Tax professionals are being hired by the taxpayers to fill up income tax returns and calculate exact amount of tax to be deposited to the government treasury. More particularly, tax professionals can play an important role to reduce the incidents of tax evasion. Under the circumstances, tax professionals’ ethics, sincerity and tax knowledge remain vital to generate more tax revenue in the country. This is truer of a developing country like Bangladesh. The article is a theoretical analysis based on the existing literature available in the field. Key Words: Governance, Tax Compliance, Tax Revenue, Tax Professionals, Developing Countries, Bangladesh. Introduction The power of a state is being measured in terms of its fiscal capacity that refers to the amount and classes of resources it owns to dispose of in a given period of time (Baskaran and Bigsten, 2012). It has long been argued that fiscal capacity is essential for high quality governments (Moore, 2007; Tilly, 1992, cited by Baskaran and Bigsten, 2012). Investopedia defines fiscal capacity as, ‘Fiscal capacity in economics, is the ability of government, groups, institutions, etc. to generate revenue. The fiscal capacity of governments depends on a variety of factors including industrial capacity, natural resource wealth and personal incomes.’ Taxation remains one of the vital factors for fiscal capacity. Long and Swingen (1991) note, ‘From the earliest days of organized government in ancient Mesopotamia, Egypt and China, tax laws have served as the essential ligaments of nations… It is this factthat taxes are profoundly essential to the existence of all successful states- that makes the age-old question of why people pay or fail to pay their taxes of central

interest.’ In fact taxation provides the lifeblood for development and governance. International Monetary Fund president Lagarde (2016) said, ‘Higher government revenues would create much-needed fiscal room for maneuver and allow for more spending on all the things that drive potential growth over the medium term, including infrastructure, healthcare, and education. In addition, more reliable sources of revenue would help avoid volatility in public expenditure and pro-cyclical fiscal policy.’ OECD states, “Beyond being the lifeblood for delivering public services, taxation has broader governance implications, which may be of particular importance in developing countries. In particular, bargaining with citizens over tax has the potential to increase the effectiveness and accountability of governments.” Against this backdrop, the present paper argues that inter alia, fiscal capacity of the state is imperative for good governance. Fiscal capacity, on the other hand, depends on the efficient collection of tax revenue. Collection of tax revenue depends on many factors. One of the important factors of tax compliance is the tax professional’s role. Tax professionals are being hired by the taxpayers to fill up income tax returns and calculate exact amount of tax to be deposited to the government treasury. More particularly, tax professionals can play an important role to reduce the incidents of tax evasion. Under the circumstances, tax professionals’ ethics, sincerity and tax knowledge remain vital to generate more tax revenue in the country. This is more relevant for a developing country like Bangladesh. The article is arranged as follows: While part I makes some introductory remarks, Part II gives a brief literature review on the topic. Part III discuss the role of tax professional in ensuring tax compliance by encouraging the taxpayers to comply and reduce tax compliance in the country. Part IV makes some observations regarding the quality and qualifications of the tax professionals of Bangladesh. Part V makes some concluding remarks. Literature Review Murshed et al (2017) state, “There is convincing empirical evidence in favour of a positive effect of fiscal capacity on long-term economic performance,

July-September 2019 | 37

as well as a complementarity between fiscal capacity, state development, and institutional quality… In general, fiscal capacity is an indication of the level of development of a country’s fiscal system; in other words a more general indicator of state capacity. It could be seen as a proxy for the government’s ability to implement complex policies.” Fiscal capacity is necessary for a state to ensure good governance by providing public goods and services to the people and establishing an effective and efficient bureaucracy to materialize government policies (Murshed et al, 2017). Murshed et al (2017) found through research that greater fiscal capacity ensures social protection spending and high per capita income as opposed to external borrowing. Fiscal capacity is strengthened if an effective tax policy is crafted. Tax policy has close relationship with development as well as governance (Addison et al, 2018, Alesina, Campante, & Tabellini, 2008; Baldacci, Hillman, & Kojo, 2004; Marjit, Mukherjee, & Kolmar, 2006; Moore, 2007). Citing Besley and Persson, 2014 and Moore, 200, Ricciuti et al (2016) state, “The strengthening of state fiscal capacity is strategically important to economic development for two reasons. Firstly, greater fiscal capacity implies in most cases, greater state access to resources that are needed for public goods provision. Developing countries are only able to raise a small share of taxes over GDP relative to advanced market economies whereas they would need higher revenues in order to invest in a number of economic and social areas that are crucial for their growth. Secondly, greater fiscal capacity is usually associated with the creation of a large, civilian bureaucracy that can itself become a distinct and powerful societal force, and provide an enabling environment for more capable states, with greater territorial reach .” Tax compliance is now a much talked about topic for the tax administrations around the world. So should be the role of tax professionals. Given the complex nature of tax legislations and uncertainty caused by lack of knowledge and information, tax payers very often find it difficult to comply. So they hire tax professionals to help them in filling up returns and comply accordingly. Tax professional can also help them evade or avoid tax through aggressive tax planning. Kang (2017) notes, “In the real world, professional tax practices are highly relevant to determine taxpayer compliance. Tax practitioner can exert considerable influence on taxpayers in the tax compliance process by either helping them to enforce or exploit the tax law.” Research in the field of tax professional’s influence over taxpayer compliance is not remarkable like the topic of tax compliance itself. Devos (2012) notes, ‘The tax compliance literature indicates that limited research attention has been given to gauging the

38 | July-September 2019

influence of tax professionals upon individual taxpayer compliance behaviour. This potential gap in the literature needs to be addressed given that tax professionals not only act as intermediaries between the Australian Taxation Office (ATO) and the majority of individual taxpayers but they can directly influence taxpayers' ethical behaviour and the level of compliance.’ Through empirical study Devos (2012) found that, ‘…there was a statistically significant relationship between the need for engaging tax professionals and compliance behaviour generally. There was also evidence of a statistically significant relationship between tax professionals' aggressive advice and the compliance behaviour of non-evaders.’ Braithwait (2005) concluded after going through social and anthropological studies that taxpayers expectations of probable enforcement action by the revenue authority is remarkably influenced by the tax professionals. Battaglini et al (2019) conducted a research on the influence of tax professionals and they concluded, ‘The existence of an intermediary between the tax authority and the taxpayer changes the process of tax collection in a fundamental way. On the one hand, the spreading of information through the tax accountant boosts the compliance effects of tax audits and the effects are too large to be ignored. On the other, the tax evasion facilitator role of the accountants – as suggested by the evidence on sorting – allows the tax authority to act strategically by targeting compliant accountants.’ Atabey e al. (2017) found through empirical study in Turkey that tax professional’s tax morale substantially influences taxpayers tax morale and tax compliance ethics. Role of Tax Professionals in Augmenting Tax Compliance Tax compliance is not an easy issue. Tax compliance involves acts filing return to responding and dealing with tax audit by the tax department. Tax laws are ambiguous, complicated, uncertain and full of intricate jargons. Complying tax law is so cumbersome that it causes anxiety. Particularly when taxpayers fail to receive necessary service from the tax office they become anxious about it (Olsen, 2018). This is psychological cost of tax compliance and it affects tax compliance negatively. The issue of tax complexity and uncertainty revolving tax compliance is applicable for all types of taxpayers, rich and poor. As Long and Swingen (1991) state, ‘Uncertainty in tax requirements or in their application to a particular situation is not limited to the wealthy or to those with especially involves financial affairs.’ Because of all these reasons gradually more and more taxpayers seek advice and help from the tax professionals. For example, in Australia, as noted by Devos (2009), ‘Regardless of the reason or reasons, tax practitioners currently represent

ARTICLE 75 per cent of Australian individual taxpayers and potentially have a large influence upon the compliance landscape.’ In the USA alone 65% individual taxpayers hire tax professionals for return preparation and in Italy for 515 taxpayers there is one registered tax professional (Battaglini, et al 2019). Tax professionals or tax accountants can motivate their taxpayers to comply with tax laws. Atabay (2017) notes, ‘The effect of accounting professional on their clients regarding taxpaying may be either positive or negative. CPA’s who has a deeper knowledge and experience about tax legislation and taxation may steer their clients to pay fewer taxes; consequently, they help their clients to be more profitable. This kind of a relationship can be seen as mutually beneficial and long lasting (even though such an action may be unethical, immoral, or even illegal).’ AS Organ and Yegen, 2013, noted tax professionals can influence their clients to comply with the tax obligations or they can mislead them not to comply. Regarding the role of tax professionals Battaglini et al (2019) note, “…understanding the role of tax professionals is key to minimizing the cost of compliance and making auditing more efficient. What do tax professionals do beyond helping their clients understand and apply the laws? Recent informal accounts suggest that tax professionals play a key role in the formation of their clients’ expectations regarding enforcement probabilities and the risk of certain practices. They also help shape tax norms and ethical standards.” Tax professionals can help improving tax compliance ethics of the taxpayers, reduce compliance costs and disseminate important information. This was observed by tax researchers though in somewhat informal manner (Klepper et al., 1991; Erard, 1993, cotchmer, 1989; Beck and Jung, 1989; Reinganum and Wilde, 1991, Smith and Kinsey, 1987; Braithwaite, 2005; Raskolnikov, 2007). But the same time they can also facilitate tax evasion by encouraging evasion-prone taxpayers. Battaglini et al (2019) state, “We argue that, depending on the role played, tax intermediaries can have pro-found effects on the nature of the relationship between tax authorities and taxpayers. Tax accountants can facilitate tax evasion by helping evasion-prone taxpayers take advantage of the complexity of tax rules and game tax authorities by offering bilateral, taxpayer-specific counseling on how to minimize income reporting within (or even outside) the boundaries of the tax code.” Raskolnikov (2007) states, ‘Developing and selling highly aggressive tax reduction strategies (tax shelters) is a lucrative business." It is also very secretive." Flagrant tax cheating is easy. Sophisticated tax avoidance techniques that have a reasonable chance to be sustained in court are much more difficult to invent.’

For example, in 2005 the multinational accounting firm KPMG helped its clients to dodge $2.5 billion in taxes through fraudulent tax shelters. When the plan was revealed by the tax authority, it paid $456 million in penalties (Sherman, 2005). All the big accounting firms are involved in tax sheltering aggressive tax planning through which they help their clients to shift profit to no or low tax jurisdictions (Hudson et al, 2014). The US Senator Carl Levin once said, ‘Many abusive tax shelters are not dreamed up by the taxpayers who use them. Instead, most are devised by tax professionals, such as accountants … who then sell the tax shelter to clients for a fee … we found a large number of tax advisors cooking up one complex scheme after another, packaging them up as generic tax products with boiler-plate legal and tax opinion letters, and then undertaking elaborate marketing schemes to peddle these products to literally thousands of persons across the country. In return, these tax shelter promoters were getting hundreds of millions of dollars in fees, while diverting billions of dollars in tax revenues from the U.S. Treasury each year.’ (Cited by Sikka and Willmott, 2013). Tax Practitioners in Bangladesh Though statistics is not available it can be presumed that in Bangladesh a lot of individual taxpayers go to income tax advisers at least once a year during the time of return submission. Individual taxpayers mostly hire tax professionals known as income tax advisers registered with the NBR and the respective taxes bar. Legal practitioners having law degrees seldom come to practice income tax law. A few can be seen in income tax practice. As per Section 174 of Income-Tax Ordinance 1984, five classes of persons are authorized to represent the assessees. (1) A relative of the assesse who is parent, spouse, son, daughter, brother or sister (2) Legal Practitioners practicing in the civil court (3) A whole time regular employee of the assessee (4) Any officer of a scheduled bank (5) Chartered Accountants (6) Cost and Management Accountants (7) Income-Tax Practitioners registered with any taxes bar association The above mentioned persons are meant to represent the assessee before the tax authority on her behalf. It should not be out of place to mention that currently in Bangladesh there are professional chartered

July-September 2019 | 39

secretaries who work in different companies in their capacity as secretaries. In our neighboring country India, company secretaries can work as income tax professional. The NBR can consider to make an amendment in section 174 to include the name of chartered secretaries in the list of persons authorized to represent the taxpayers before the tax officers. There is, however no concrete law in Bangladesh to regulate the behavior of tax professionals. Like the United Kingdom and Ireland, tax practice is mostly unregulated profession. Chartered accountants are regulated by the professional body Institute of chartered accountants of Bangladesh (ICAB). Likewise cost and management accountants have their own regulatory body called the Institute of Cost and Management Accountants of Bangladesh (ICMAB). On the other hand legal practitioners are governed by the Bangladesh Bar Council. There are taxes bar associations all over Bangladesh. Graduate having commerce degree can apply to the NBR to get enlisted as income tax adviser. Besides retired income tax officials can practice income tax law with prior approval of the NBR and having a certificate to that effect. Advocates, chartered accountants, cost and management accountants can work as income tax advisers without being member of the taxes bar association. But retired income tax officials must take membership of the taxes bar association before they start practicing as advisers. It is necessary to involve all knowledgeable persons in the field to improve compliance and revenue collection. Therefore, Tax Practitioners legislation is necessary in Bangladesh to enable well diversified group of tax professionals to practice tax law. Govt. should come out with substantial legislation covering all five class of tax law professionals of Bangladesh. US Treasury Circular No.230 for regulations governing practice before the Internal Revenue Service of USA and Tax Agent Service Act of Australia are very good examples for consideration of National Board of Revenue, to have similar Tax Practitioners Law in Bangladesh. NBR should seriously think of regulating the behavior of tax professionals following best practices of tax administrations around the world. Battaglini et al (2019) state, “A smart tax authority should then invest resources to learn the accountants’ types, diverting attention from the taxpayers to their intermediaries and auditing with higher probability clients of more evasion-prone accountants.”

much needed tax revenue in a given society. To generate sufficient amount of tax revenue, tax compliance is imperative. Again tax professionals play a vital role in helping the taxpayers to comply with their tax obligations. The role of tax professional is more crucial in developing country like Bangladesh. It is observed that different types of professional can deal with taxpayer’s representation before the tax authority. Tax professionals’ role in enhancing tax compliance cannot be undermined. Tax professionals are qualified and are thought to possess enough knowledge of tax law and accountancy. They render professional services to taxpayers by helping them preparing income tax returns, calculating the exact amount of taxes to be paid, represent them before the tax authority. They can also play a vital role in improving tax culture in the country. So given the nature and importance, it is imperative that there should be some sort of legal mechanism to control their behavior. But there is no separate law in Bangladesh to improve tax professionals’ morale and remove knowledge gap. There should be concrete policy to regulate the act and behavior of the tax professional in Bangladesh. For an effective taxation system the role of tax professionals cannot be undermined under any circumstances. As Guthrie (2014) terms tax professionals as, ‘…a force for consistency and stability in their economies, and have an important role to play in the functioning of sound and effective taxation systems. They help employers and clients understand their fiscal and regulatory obligations in relation to taxation and advise them on how to comply…’ In fact tax professionals can play a crucial role in state governance by buttressing a positive relationship between the taxpayers and the state. Tax reform should be governance focused and in that reform initiative, tax professional can make a remarkable contribution with their professional expertise. CMI (2013) argues, “Tax systems can potentially contribute to shape accountability relationships between the state and citizens. For taxation to have a positive effect on accountability and to secure that tax issues are part of the public political agenda, taxes must be ‘felt’ by a majority of the population.’ However, in Bangladesh there is no study, empirical or theoretical, on the role of tax professionals in income tax administration. Further empirical research is imperative and can help in gauging the role of tax professionals against the ban ground of Bangladesh income tax administration.

Conclusion There is no gainsay that for good governance, government should achieve the expected level of fiscal capacity. As is observed, fiscal capacity on the other hand depends largely on efficient collection of

40 | July-September 2019

» About the Author

Commissioner of Taxes National Board of Revenue

ARTICLE

THE EVOLVING ROLE OF COMPANY SECRETARY IN CORPORATE GOVERNANCE: BANGLADESH PERSPECTIVE Nayamul Hoque ACS

utline

Bangladesh is one of the fastest growing economies in the world flourishing with local and multinational companies progressively. Good corporate governance can boost its economic, social and political condition and provide the atmosphere for the growth of the private sector as well as the creation of employments. The Company Secretary (also known as Chartered Secretary), being the Governance Professional, plays a significant role in fostering corporate governance by conceptualization, formation of legal framework, complying with the statutory requirements of the affairs of the company s/he works for. The dynamic leadership of the professional may contribute significantly to the noble cause of serving society as a whole by introducing good governance in the business. “In today’s world, the role of the Corporate Secretary

has no one meaning and covers a multitude of tasks and responsibilities. That said, the role lies at the heart of the governance systems of companies and is receiving ever great focus.” —David Jackson, Corporate Secretary, BP plc. The Concept of Corporate Governance Corporate governance is a system of rules, regulations, procedures and processes that guides, operates, tracks, regulates and audits a corporation with a focus on the interests of shareholders. The Organization for Economic Co-operation and Development (OECD) describes corporate governance as involving a “set of relationship between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set and the means of attaining those objectives and monitoring performance are determined. Good

corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and shareholders and should facilitate effective monitoring, thereby encouraging ﬁrms to use resources more efﬁciently.” The six OECD Principles of corporate governance are: •

Ensuring the basis of an effective corporate governance framework;

•

The rights of shareholders and key ownership functions;

•

The equitable treatment of shareholders;

•

The role of stakeholders in corporate governance;

•

Disclosure and transparency;

•

The responsibilities of the board.

Cadbury Report, 1992, defines the same as the system by which companies are directed and controlled. According to the World Bank, Corporate governance is: Blend of law, regulation and appropriate voluntary private sector practices Which enable the corporation to attract financial and human capital, perform efficiently, and Perpetuate itself by generating long term economic value for its shareholders, While respecting the interests of stakeholders and society as a whole Intrinsically, corporate governance's very aim is to build and enhance accountability, reputation, openness, credibility and, of course, confidence. Defining the term Company Secretary The word connected with the function of a board of directors performed by the secretary varies from entity

July-September 2019 | 41

to entity, from legislative framework to legislative framework and from jurisdiction to jurisdiction. There is some popular misapprehension about the concept of a “secretary”. The word derives from the Latin “secretaries” meaning a confidential officer, connected in turn with “secretum”, which means secret. The primary meaning of the word is given as “a person entrusted with private or secret matters”. The secondary meaning is “a person whose duty or occupation it is to conduct the correspondence or organize the affairs of another”. Then three instances are given, of a person employed to assist with correspondence, record-keeping and making appointments etc.; an official appointed by an organization to conduct correspondence, keep records and organize the affairs of the body. Per the Companies Act 1994, Section 2(u) – “Secretary means any individual possessing the prescribed qualifications appointed to perform the duties which may be performed by the secretary under this act and any other ministerial or administrative duties”. Under this Act, Company Secretary is a statutory officer. As a senior corporate officer, Company Secretary has a wide range of duties, acting as the focal point of interaction with the board of directors, senior management and shareholders of the company. Corporate Governance Practice in Bangladesh Bangladesh's experience in corporate governance includes key internal and external considerations, such as the legal framework, the financial sector scenario, accounting standards and compliance with regulatory requirements, the position of regulators and the judiciary, and the role of interested group. The Corporate Bangladesh is:

Governance

External regulations

Internal regulations

Acts (mainly Companies

Framework

Best practices

MoA & AoA

International Codes

Resolutions

Industries Standards

Act 1994) & Regulations Corporate Governance Code, 2018 Listing Regulations 2015 Judiciary Others

Policies Procedures Others

42 | July-September 2019

Others

Companies of Bangladesh are incorporated and governed by the Companies Act 1994, the Bank Company Act 1991, the Financial Institution Act 1993, the Bangladesh Securities and Exchange Commission Act 1993 (2012 amended), the Insurance Act 2010 and the Bankruptcy Act 1997 that define the rights and responsibilities of majority and minority shareholders. The Corporate Governance Code (CGC), the key tool for Corporate Governance, emphasizes on the five elements of Corporate Governance-good board practices, appropriate control environment and processes, strong regime of disclosure and transparency and protection of (minority) shareowner rights. The CGC as well ensures the four pillars of Corporate Governance: transparency, accountability, fairness and responsibility within the companies accordingly. The Role of Company Secretary The Chartered Secretary or Company Secretary usually performs as "bridge" between the board and management and the organization and its stakeholders, including its investors, for information, interaction, advice, and arbitration. Among other activities, the corporate secretary can help management to understand the board's requirements, help the board to understand the management's difficulties. Chartered Secretary is a requisite qualification for becoming a Company Secretary. The input of Chartered Secretary includes managing people to create the correct environments to allow the processes, policies and procedures of corporate governance to work effectively. Institute of Chartered Secretaries of Bangladesh (ICSB) has been formed pursuant to an act of Parliament, i.e. The Chartered Secretaries Act 2010 is the only recognized professional body in Bangladesh to establish, promote and govern the profession of Chartered Secretary. All listed companies should have a company secretary, according to the Bangladesh Securities and Exchange Commission (BSEC). Essentially publicly listed companies in Bangladesh are to maintain legal bindings in compliance with the Corporate Governance Code, the Listing Regulations and other laws related to securities as they are regulated and

ARTICLE monitored by regulators such as BSEC, Dhaka Stock Exchange Limited (DSE), Chittagong Stock Exchange Limited (CSE), Central Depository Bangladesh Limited (CDBL). Being the gatekeeper of corporate governance, company secretary’s key roles are: •

Ensuring the corporate governance framework for the company comprising internal and external policy and procedures, ethics and best practices;

•

Supporting the chairman and the board by legal and ﬁnancial advices;

•

Board and accordance regulations;

•

Communicating with stakeholders and ensuring the minority interest as compliance professional;

•

Furnishing disclosure and reporting though prudent knowledge and skill set with transparency;

•

Bridging between the board and management with the multidimensional capacities;

•

Maintaining shareholder relations & arranging shareholders meetings as focal point of the entity;

•

committee with the

affairs managing in required rules and

Ensuring conscience of the company as whistle blower.

Conclusion In fact, in the modern era the role of company secretary is considered as the chief compliance ofﬁcer of an organization and it is a position increasingly relied on by the board to provide guidance and enforce good governance practices. Sustainable development requires an economy that operates in an ethical, transparent and properly regulated environment. Company Secretaries through their professional leadership are contributing signiﬁcantly to construct that culture. References 1. Word Economic Outlook Database: IMF 2. The Corporate Secretary: The Governance Professional by IFC 3. G20/OECD Principles of Corporate Governance (2015) 4. The Role of the Company Secretary : A Tale of Two Worlds by Walubita Luwabelwa and Justice Dr. Mumba Malila, SC 5. An article on Corporate governance practices in Bangladesh by Sheikh Anwar 6. Website of ICSB 7. Internet

» About the Author Associate Member of the Institute

July-September 2019 | 43

STEPS OF SAVVY PROFESSIONALS TOWARDS GOOD GOVERNANCE Md. Saiful Islam ACS

bstract

In the development literature of recent times, the terms ‘Governance’ and ‘Good Governance’ are increasingly being used as demanded. In the era of transforming with changes, accelerating of globalization, and increasing uncertainty and business scandals, countries are badly looking for a form of governance that is better adapted to economic competitiveness and sustainable development considering holistic approach. This article describes the conceptual thoughts of Governance and Savvy Professionals in different understandings and relationship in between them where objectives run for sustainability. The article tries to bring out the importance of Good Governance in Corporate world which is lack behind because of having effective steps of savvy professionals from different industries. Keywords: Governance, savvy professionals, codes of Good Governance, etc.

and indirectly affect the complexity of governance. It may be defines as the manner in which power is exercised in the management of a country's economic and social resources for development. Governance is how society or groups within it, organize to make decisions. Governance describes the process of decision-making and the process by which decisions are implemented. Shortly, it drives to do the things rightly with controlled, effective, and efficient manner. Good Governance Can governance be negative? No, the term governance itself a positive word where Good governance is associated with efficient and effective administration in Rule of Law Transparency Responsiveness

Introduction

Consensus Oriented

The concept of Governance is not newly explored rather very ancient idea which came in discussion in every era with different dimensions. The understanding of Good Governance in line with the existing challenges is not only important but also acceleration towards moving ahead. Individuals, who brought changes in the world positively through the times; had good knowledge and proper understanding on good governancesometimes called Leaders who can oversee the future. The discussion is about to know the basic theme of Governance and role of persons who can implement the good governance with effective and efﬁcient manner.

Equity and Inclusiveness

Understanding the melody of Governance Governance: Governance is an abstract idea which is difﬁcult to be deﬁned in simple view. A numbers of areas are directly

44 | July-September 2019

Effectiveness and Efficiency Accountability a democratic framework. It refers to adoption of new values of governance to establish greater efficiency, legitimacy and credibility of the system. Good governance is, thus, a function of installation of positive virtues of administration and elimination of vices of dysfunctionalities. It derives a number of elements that affects the system in all-inclusive manner. Corporate Governance Corporate governance is the structure of rules, practices, and processes used to direct and manage a company. Business is a field of nurturing assets i.e. Informational, Financial, Human. In the business

ARTICLE context, the process of utilizing the assets through right directions maintaining some external and internal obligations called Corporate Governance. Let’s have a look of its frame at a glance.

•

Understands the regulations with if & buts

•

Sync among Stakeholders

Board,

Management,

and

Good Governance Practice Language, beliefs, cultures, tastes, attitudes and politics have developed over centuries and make each of our nations unique. Surprisingly, our business practices have evolved in an equally as diverse pattern and governance practices are there in business in different dimensional implementations. Very often questions come forward…. a) How we treat the term ‘governance’? b) How, when, important?

where

feel

governance

c) How we set Governance in our business?

The primary influence of Corporate Governance comes from the intensions of Board of Directors. Governance stumbles when BoD moves negatively on the other hand and it cast doubt through reliability, integrity, and transparency. Understanding the Savvy Professionals The most unique asset of Business is human asset in every aspect. People can be treated as professionals through profession but the author was trying to bring out those professionals who have achieved professionalism through the direct influence and guidance of professional bodies i.e. ICSB, ICAB, ICMAB, ACCA etc. Further, the author specified those professionals through naming Savvy who own real sense of knowledge, influence towards performance and regulations. The term ‘Savvy’ means knowledgeable, having smart or good common senses, and sound judgments. Traits of Savvy professionals: •

Having expertise in speciﬁc business area

•

Know how, when, where to communicate

•

Know the difference between the good and great

•

Stands one step ahead than others

d) How possibly we match the theory and reality of Good Governance? e) Who will implement the governance? f)

Who can understand and make other understood about the governance?

Organizations starving for good governance but questions arise that what extent the owners are practicing. Like other nations, the regulatory bodies are imposing different rules and regulations to ensure governance in the corporate industries but still numbers of issues pinches the core of governance. There are several controversial issues on which seminars, training, programs are going on to resolve. So what should we do for implementing good governance? Yes, collectively the institutions, owners, stakeholders and as well as the government demands for code of Corporate Governance. Codes of good governance are a set of best practice recommendations. The explosion in the issuance of codes of good governance has been accompanied by an increase in the number of articles in academic publications. Studies show many recommendations as codes of good governance but positive changes are not coming rapidly. Why so? Although codes of good governance have been developed around the world for more than a decade, the

July-September 2019 | 45

degree to which ﬁrms adopt codes varies across countries, and the decision to adopt a given code does not automatically guarantees effective corporate governance. The implementation of the codes has increased over time, with country-level studies showing that ﬁrms tend to increasingly adopt a higher percentage of code recommendations despite their voluntary nature. As a result, the ultimate objectives of Good Governance become not achievable. But why this is so? These questions directly indicate the involvement of right professionals, who can play pivotal role in every business sector of the country, rules formation to implementations, understand the regulations, and make the Governance visible. Role of Savvy Professionals to Governance As savvy professionals, individuals have to have some traits like ethical, altruistic, responsible, responsive, committed, and intellectual. Besides these, many professionals have multi-dimensional skills. Together with different expertise professionals have more acceptance than others which enables them to ensure governance practice in the institutions as well as industries. Let’s discuss role of savvy professionals on different aspects:

•

To be responsive towards contingency planning

changes

•

To oversee the risk factors and guide the stake holders to mitigate the associated risk

Governance has numbers of wings to be covered. It is quite impossible to maintain all the issues as recommended but some areas are very important which needs to be controlled in effective and efﬁcient manner. Professionals from different professional bodies are continuously working on Governance aiming to provide the nation with sustainability. Among others, Chartered Secretaries are very inﬂuential towards Governance Practice in any industry. They work with not only

numbers but also belief, compliance, and ethics. They directly works with the Board of Directors, responses with the stakeholders and governments, complies the regulatory requirements, guides and implements compliances within the organizational environments. Holding statutory position, Chartered Secretaries ensure the harmony between the BoD and Manage-

ment, Management and Employees, Institutions and Regulatory Bodies. So, the nation needs Savvy Professionals in broader aspect to ensure good governance rather just Professionals. Conclusion

•

To Inﬂuence and guide the regulators for time and business oriented regulations

•

To ensure proper compliance of mandatory or voluntary regulations

•

To empowering Independent Directors

•

To encourage diversity in Board

•

To adapt ethical practice in every corner

•

To train the BoD towards codes of Corporate Governance

•

To create business with holistic approach rather self-centric approach

•

To turn the BoD from proﬁt oriented to stakeholders’ oriented

•

To disclose the sensitive issues with transparency

» About the Author

•

To ensure the accountability and responsibility

Associate Member of the Institute

46 | July-September 2019

having

Governance isn't a separate activity however an inherent a part of any organization. It refers to the processes by that organizations are operated, guided and command to account. Governance involves authority, responsibility, leadership, direction and management in an organization. Governance keeps our organizations and communities functioning soundly and democratically. Understanding the importance of Governance drives to know the role of professionals who, on behalf of the institutions, stakeholders, and government, lead the governance in track. This article shows how importantly the savvy professionals act in line with the Governance elements. Adequate number of Professionals are now badly required to the steady development good governance of the Country as well as the whole world because it matters.

ARTICLE

ROLE OF CHARTERED SECRETARIES AS GOVERNANCE PROFESSIONALS Md. Noor-Ul-Alam ACS

ntroduction

Bangladesh is a fast growing economy and booming with national and multinational firms. Bangladeshi companies are now likely to release their stakeholder responsibilities and societal obligations, along with their shareholder-wealth maximization objective. Business depends, for its survival and long term prosperity, on society providing the resources; people, raw materials, services and infrastructure. On top of all, neither the business can survive without society nor the society without business. Therefore, the growth of Bangladesh in businesses, new regulatory prescriptions, intense antagonism and emergence of multifaceted business models expect the Chartered Secretaries, the Governance Professionals as developed countries recognize, can play a very important role in the rising economy like Bangladesh as they play a variety of different roles . Importance of good governance The concept of "governance" is not new. It is as old as human civilization. Simply put "governance" means: the process of decision-making and the process by which decisions are implemented (or not implemented). The fundamental reasons why organizations should adopt good governance practices are: 1) To preserve and strengthen stakeholder confidence – nothing distracts an organization more than having to deal with a disgruntled stakeholder group caused by a lack of confidence in the governing body. 2) To provide the foundation for a high-performing organization – the achievement of goals and sustainable success requires input and support from all levels of an organization. 3) To ensure the organization is well placed to respond

to a changing external environment –business today operates in an environment of constant change. Process of understanding our changing world does not happen by chance, it requires leadership, commitment and resources from the governing body to establish and maintain such a system within the organization. History of Company Secretary and Corporate Governance, evolution of Chartered Secretary-ship: The term “company secretary” is commonly used in the United Kingdom and other commonwealth countries. In the United States, Canada, Eastern Europe, and post-Soviet states, the term “corporate secretary” is more common. Now, the modern company secretary or corporate secretary is no longer a “mere servant,” but is expected to provide professional guidance to shareholders, boards, individual directors, management, and other stakeholders on the governance aspects of strategic decisions. The role of the company secretary has evolved over time in the developed counties. The role of the

company secretary has evolved in the United Kingdom from the 19th century, when a secretary was needed by directors to assist in organizing meetings and keeping records required by law. In the early 20th century, for instance, in 1929 the UK Companies Act gave additional responsibilities to company secretaries including signing annual reports and certifying private companies for meeting certain criteria. The corporate collapses of the late 1990s and early 2000s in many developed counties resulted in an increased shareholder focus on corporate governance and transparency. This focus had emphasized the company secretary's role in assisting with and supporting the governing and monitoring role of the board within their organizations. Thus, comes the buzz word “corporate governance” and the company

July-September 2019 | 47

secretary became the high sounding professional on good governance after then. Corporate governance best practices as we know them today were ﬁrst introduced following corporate scandals in the United Kingdom in the early1990’s. This award was developed with listed companies in mind. All organizations, however, practice governance and can learn from the best practices. Institute of Chartered Secretaries and Administrators (ICSA),UK-qualiﬁed company secretaries (Chartered Secretaries) deliver a more rounded governance and board member service than those who have come to the role via other professional routes. This is because the qualifying scheme for Chartered Secretaries equips them with cross-functional business knowledge to coordinate cross-divisional activities. ICSA has nine divisions globally and operates in over 80 countries with 36,000 members worldwide. History of the company secretary (Sources: Barton, 1841; Cadbury, 1992; Armour, 2012) Year

Company Secretary

1841

Early appearance of company secretary in English law case reports from 1841 onwards. Duties were to advise the directors and attend meetings.

1856

The origins of the company secretary begin in the UK with the Joint Stock Act of 1856. Position held no responsibilities or duties.

1891

Institute of Chartered Secretaries and Administrators (ICSA) was founded in 1891 .

1948

Companies Act of 1948 recognized the company secretary as an ofﬁcer of the company alongside the directors. There were no speciﬁc duties; however, the company secretary was authorized to sign prescribed forms on behalf of the company and make statutory declarations on fact matters.

1968, Company secretary recognized as a 1970, responsible ofﬁcer under a succession of 1971 Acts including the Trade Descriptions Act 1968, Taxes Management Act 1970 and Unsolicited Goods Act. 1971. The company secretary was formally noted as the chief administrative ofﬁcer. 1980

Companies Act 1980, required company secretaries of public companies to be

48 | July-September 2019

Year

Company Secretary qualiﬁed either by professional qualiﬁcation or by prior experience

1992

The key role of company secretaries in good Corporate Governance (CG) was recognized in the Cadbury report.

1995

Corporate Governance best practices award was given by ICSA for the ﬁrst time.

The Institute in Australia changed its name in 2013 to Governance Institute of Australia upon the realization that the role of its members in corporate governance related areas had greatly increased for them to continue with the “secretary” tag. Following that the Institute in Canada has changed its name Governance Institute of Canada as well. Now, Institute of Chartered Secretaries and Administrators (ICSA), UK and the institute in New Zealand were renamed as the Chartered Governance Institute (in September 2019) and give their members duel degree recognizing them as Chartered Secretaries and Chartered Governance Professional simultaneously. Global governance trends Since the role of the company secretary is changing, it is becoming increasingly outward focused and not just about internal administration , more and more countries are introducing the position of the corporate Secretary, whether in law or through regulations, standards, or codes of corporate governance. The Corporate Secretaries International Association (CSIA) is a Geneva-registered global organization. It’s structured as an international federation of professional bodies enables it to effectively represent those practitioners who work at the frontline of governance. CSIA’s Governance Principles for the Corporate Secretary are: 1. Integrity 2. Accountability 3. Stewardship 4. Transparency 5. Separation of board and management 6. Corporate environment

responsibility

society

and

the

ARTICLE Thus, key global governance trends are as follows: – Disclosure – Transparency – Accountability – Shareholder rights and engagement – Risk management and internal controls – Corporate social responsibility and ethics Importance of Chartered Secretary in Bangladesh as governance professional Now many countries have requirements in law, regulations, standards, or codes for the qualiﬁcations of those carrying out the role of corporate secretary. These include members of professional bodies such as Institute of Chartered Secretaries of Bangladesh (ICSB) for Bangladesh, Institute of Company Secretaries of India (ICSI) for India, Institute of Chartered Secretaries and Administrators in Zimbabwe for Zimbabwe, The Institute of Certiﬁed Public Secretaries of Kenya for Kenya, Chartered Secretary Southern Africa(CSSA) for South Africa ,The Malaysian Institute of Chartered Secretaries and Administrators (MAICSA) for Malaysia, The Institute of Corporate Secretaries of Pakistan for Pakistan , The Society of Corporate Secretaries and Governance Professionals, Inc for the USA, Chartered Secretaries Canada for Canada , Institute of Chartered Secretaries and Administrators (ICSA) for UK and many commonwealth countries. With a motto ‘Promoting governing excellence’ the Institute of Chartered Secretaries of Bangladesh (ICSB) serving the country as Governance Institute of the country. Nearly six hundred members of ICSB as Chartered secretaries have an important role to play as governance professionals in all types of organizations in the private or public sectors. It is known that governance is more than just complying with laws, regulations, standards, and codes; it is also about creating cultures of good practice. So, the work of a Chartered Secretary or governance professional is essential to the direction, governance, administration and management of any organization. Public and political concern about governance, ethics, probity, accountability and good

practice is higher than ever before as is the risk of getting it wrong. To succeed in this climate whether in the public or private it is essential to have people who can chart a course through the jungle of legislation, regulation and the best practices; people who are authoritative, identify the problems, understand the issues and have the expertise to provide the right solutions; people who will keep an organization on track and help it to prosper and develop. Chartered Secretaries, members of ICSB, are the only qualiﬁed professionals speciﬁcally trained to carry out the role of company secretary as well as governance professional in the country. The role of the company secretary in Bangladesh has increased over last couple of decades, citing the increases in regulatory demands, board and committee services, advisory works, and shareholder and other communications. The increasing sophistication of their work and increased reporting structure to management as there is a demand for better Governance as well as Corporate Governance

practices. It is also for increased expectations of institutional and other investors with calls for greater transparency in corporate affairs, and new complex corporate environment. The company secretary has evolved and the responsibilities and challenges have increased substantially as demands for better Corporate Governance have grown. New opportunities have also arisen as Governance Professionals. The reasons include more corporate legislation and regulation, growing demands for limpid corporate affairs, demands for better Corporate Governance practices, and ever-changing expectations of investors. The increase in the size and complexity of some companies, has also contributed to new expectations and demands on Governance activities. Though the roles of Chartered secretaries are very signiﬁcant to the economy, most of their true endeavors become in vain as they are not properly recognized and empowered by the law of land. Besides, inadequate Compliance Audit, weak Statutory Audit system, poor audit report, inconsistency among Companies Act, other relevant Acts, BAS and SEC Requirements and weak regulatory system hold back their effective role in the economy. In addition, governance constitutes a major challenge for

July-September 2019 | 49

Bangladesh now-a-days. It’s under performance is evident in many areas of national life. In fact, it is crystal clear from evidence as well as pronouncement of our policy makers and international donors that Bangladesh’s improvement in the governance realm is not keeping pace with the progress achieved in some areas of economic and social policies.

the government. On top of all, Bangladesh cannot go forward and be a developed country by 2041 unless administrative, ﬁnancial and political powers are exercised with good governance. Hence, reforming all the institutions with good governance is a must to start with for a new Bangladesh transiting towards a developed country as dreamt by our Prime Minister.

Therefore, Bangladesh government should come forward to nursing this profession with extra care for the better interest of the country ﬁnancing more in this ﬁeld as well as take steps to develop this profession with the help of the World Bank and other concern institutes of the world. Then, governance issues will properly be addressed, monitored and checked by the quality governance professionals keeping face with the developed world and will help the country to reach the highest level of governance indicators and achieve the goals for reform as a truly developed country by 2041.

References

Conclusion In conclusion, good governance is the launch pad for meeting the challenges to reform and longer term perspective development of Bangladesh .The Chartered secretaries, as the catalysts, will play a leading role in this regard if they are properly used by

50 | July-September 2019

Websites: 1. Institute of Chartered Secretaries and Administrators (ICSA), UK 2. The Corporate Secretaries International Association (CSIA), Hong Kong. 3. Governance Institute of Australia. 4. Institute of Chartered Secretaries and Administrators in Zimbabwe. 5. The Institute of Certiﬁed Public Secretaries of Kenya. 6. Institute of Chartered Secretaries of Bangladesh (ICSB)

» About the Author Associate Member of the Institute

ARTICLE

ROLE OF A CHARTERED SECRETARY Md. Mijanur Rahman ACS

ntroduction

The principles of corporate governance

A governance professional is deployed to leads and advise on best practice in governance, risk management and compliance, to safeguard organizational integrity by complying the governance framework, to make board sound on standards of ethical and corporate behavior and to balance the interests of the board (or governing body), management and other stakeholders. Governance professionals can have a wide range of position titles, depending on the organization. They may be called, for example, Company Secretary, General Counsel, Chief Financial Officer, Chief Governance Officer, Chief Risk Officer or another title. The title will vary depending on the individual circumstances and needs of each organization. Governance practitioners have a significant impact on the level and quality of corporate governance and governance culture within an organization, including a pivotal role in assisting the board achieve the organization’s vision and strategy.

The principle ideas behind the Corporate Governance Code are fairly straight forward – principles have to be intuitive, relevant and easy to remember. The ﬁve principles of corporate governance:

What is Corporate governance?

Principles are not really a matter of regulation but they enable companies to be better run. Chartered secretary should be familiar with applying high level principles to practical realities.

Corporate governance is the system by which companies are directed and controlled. Corporate governance involves balancing the interests of a company’s many stakeholders, such as shareholders, employees, management, customers, suppliers, ﬁnanciers and the community. Getting governance right is essential to build public trust in the companies. The purpose of corporate governance is to facilitate effective, entrepreneurial and prudent management that can deliver the long-term success of the company. In the Bangladesh for listed companies corporate governance it is part of the legal system as the Bangladesh Securities and Exchange Commission (BSEC) introduced 'Codes of Corporate Governance' in June 2018, which shall be complied within 31 December 2018 and the new 'Codes of Corporate Governance, applies to all companies with Listing of equity shares.

Leadership

–

to steer the company to achieve its business purpose

Capability

–

having a capable discharge their duties

board

Accountability –

to communicate to its stakeholders how the company is achieving its business purpose and other responsibilities

Sustainability –

to create value and allocate it fairly and sustainably

to withstand scrutiny by internal and external stakeholders.

Integrity

Chartered Secretary Profession Chartered Secretary as governance professional has role to the direction, governance, administration and management of any organization. They are expert to chart a course through the jungle of legislation, regulation and best practice; they are authoritative to identify the problems, understand the issues and have the expertise to provide the right solutions; and they are able to keep an organization on track and help it to prosper and develop. The responsibilities and duties of Secretary as Governance Professional:

Chartered

1. Ensuring Governance, risk management compliance policy and practice;

and

July-September 2019 | 51

2. Formulating and carrying out Corporate strategy and board management-administration; 3. Enhancing Board performance, remuneration and evaluation; 4. Expert utilization of human resources, legal and finance; 5. Work as external adviser communication-liaison; 6. Managing the general administration. Career Prospect and Opportunity of Chartered Secretary as governance professional in Bangladesh As Bangladesh is entering in the middle-income country status there should have lots of compliances to be maintained by all economic and business entities. Government is establishing 100 economic zone across the country. Its GDP growth rate is expecting 7.90% which is deemed to grow continuously. Therefore, it is high time to realize the contribution of the Chartered Secretary or governance professional by the entrepreneurs of the business entities. Now a days entrepreneurs are hiring a good number of CS in the secretariat department. There are a big number of audit firms providing their service in the field of company secretary and compliance. Recently entrepreneurs are taking this service through outsourcing system. So, there are lots of job opportunity in this area. Observing the different job portals of Bangladesh now it is clear that huge job demand is creating in this field. Entrepreneurs and management of the corporates now acknowledge the contribution and importance of this department. At present, there are almost 600 professional Chartered Secretary, CA, ICMA have been working in this field as the Company Secretary or equivalent position in different corporates or entities. More than 1000 partly qualified professional have been serving in this department of different companies. Now employers are highly eager to appoint professionals in this field. Since by nature it’s reporting to the entrepreneurs or BoD, employees of this department get prestigious feelings and respect among other employees of the organizations. So, it can be summed up as this, there are huge opportunities coming up in near future to boost up career in this exciting and challenging area in any corporate house in Bangladesh.

52 | July-September 2019

Conclusion The modern corporate secretary is no longer a “mere servant,” as often implied in earlier job descriptions and early legal text, but is now expected to provide professional guidance to shareholders, boards, individual directors, management, and other stakeholders on the governance aspects of strategic decisions. The corporate secretary typically would act as a bridge for information, communication, advice, and arbitration between the board and management and between the organization and its shareholders and stakeholders. To fulﬁll this role, the corporate secretary needs to be fully aware of the powers, rights, duties, and obligations of all of these groups. In addition to providing advice and communication, the corporate secretary often called on to create and manage relationships between these different players in the corporate governance system. References i.

https://www.icsb.edu.bd

ii. https://www.governancenz.org iii. https://www.governanceinstitute.com.au iv. ICSA. 2013. “Reporting lines for secretaries.” Guidance Note www.icsaglobal.com.

company (July).

v. Kuper, Lawrence. 2006. Ethics—The Leadership Edge. Cape Town: Zebra Press vi. IFC. 2005. “Corporate secretary: Recommendations for Ukrainian companies”. Handbook. Washington, D.C.: International Finance Corporation vii. The Bangladesh accountant viii. https://www.bb.org.bd ix. Guidance on internal control & compliance in banks-Bangladesh Bank x. https://www.investopedia.com xi. https://mof.gov.bd : Bangladesh Economic Review

» About the Author Associate Member of the Institute

ARTICLE

PROFESSIONALS’ ROLE TO PROMOTE CORPORATE GOVERNANCE Mohammed Quamruzzaman Khan ACS

ntroduction

The purpose of Corporate Governance is to facilitate effective, entrepreneurial and prudent management that can deliver the long term success to the company. "Corporate Governance" (CG) has not been defined but given different meaning by different persons. CG is the system of rules, practices and processes by which a company is controlled and directed. It has to take into consideration the interest of all stakeholders including shareholders, customers, employees, regulators and above all the environment. So different individuals have different roles to play to ensure governance within the company. The shareholders role in governance is to appoint the directors and auditors and to satisfy themselves that appropriate governance structure is in place. Responsibilities of the Board and the professionals lie with setting the company’s strategic plans, providing leadership to put them into effect, supervising the management of the business, reporting to the shareholders on their stewardship and complying with applicable statutes, laws and regulations i.e. ensuring corporate governance as a whole. Over the last couple of decades the focus of governance has evolved. It started to gain momentum in early 2002 through the Sarbanes Oxley Act of USA. It got higher pace after major scams in financial sector and in some highly renowned companies including Enron, an American energy company. Cadbury Report of the UK further highlighted that it is important not only to earn profits in a company but also to reform the corporate sector through environmental awareness and ethical behavior. The basic need for good CG is adequate disclosure in a transparent manner of all transactions, taking responsibility for each and every action initiated, and overall accountability. Corporate Governance is nothing but run by individual mind sets and unless the individuals, who are at the helm of the affairs of the management behave with utmost ethics and fairness in their approach and decisions, the interest of all stakeholders would be in shambles. So

the governance practitioners are placed in more responsible positions under the present complex scenario for the interest of all the stakeholders. Governance practitioners can have a wide range of position titles, depending on the organization. For example, they may be called, Company Secretary, Chief Financial Officer, Chief Governance Officer, Chief Compliance Officer or by any other name. The title will vary depending on the individual circumstances and needs of each organization. However, in essence, a governance professional: •

leads and advises on best practice in governance, risk management and compliance

•

champions the compliance framework to safeguard organizational integrity

•

promotes and acts as a ‘sounding board’ on standards of ethical and corporate behavior

•

balances the interests of the board (or governing body), management and other stakeholders.

Governance practitioners have a signiﬁcant impact on the level and quality of corporate governance and governance culture within an organization, including a pivotal role in assisting the board achieve the organization’s vision and strategy. Team of Governance Professionals The relevant act and global best practices have considered the following team of professionals in different ways to strengthen Corporate Governance. a. Board Members (Directors): Boards have numerous responsibilities: they oversee management, ﬁnances, and quality; set strategic direction; build community relationships; establish ethical standards, values, and compliance; and select a CEO and monitor his or her progress. The board considers elements in the environment—such as

July-September 2019 | 53

growing competition and changing patterns of economy and develops a vision, a mission, strategic thrusts, goals, and tactics that respond to the environment, all the while showing the organization's values. Financial oversight is a familiar job that boards usually do well. Boards ensure the use of financial controls; ensure that funds are prudently invested, considering cash management, banking, and contracting parameters; and establish policies related to budgets. Their goal is to protect the community's assets. Oversight of the quality area often involves utilization and risk management in addition to continuous quality improvement. In recent years, compliance issues have risen to board-level responsibility as well, particularly as the media have reported people being sent to jail and organizations and individuals being fined for breaches in government regulations. Compliance is probably the only new issue that has been added to board responsibilities over the past decades. b. Independent Directors: All companies shall have effective representation of Independent Directors on their Board so that the Board, as a group, includes core competencies considered relevant in the context of each company. c. Board Committees : For ensuring good governance CG Code suggests that the Board shall have at least the following sub committees 1. Audit Committee 2. Nomination & Remuneration Committee. These committees have different roles and responsibilities towards achieving organizational success and compliance to relevant laws. Committees are important players in governance process. It is useful to periodically review the structure and functions of the committee and to ensure that everyone knows what to expect from them. d. Chief Financial Officer: Corporate governance and accounting walk hand in hand; one cannot function without the other. Good corporate governance has become the deciding factor which enables companies to maintain a strong financial position in their respective markets. Most corporate governance failures in events across the globe have usually found the accounting department at

54 | July-September 2019

fault. Good corporate governance builds the faith of customers in companies, thereby leading to lower capital costs in investments. Accounting is the key enabler of good corporate governance and is considered an effective means of improving the corporate governance in organizations. Accounting professionals periodically compile data to report companies’ internal activities to stakeholders. However, all accounting processes in organizations are rigorously controlled and monitored by certain global standards and regulations. The industry-wide regulations make it mandatory for companies to disclose certain information to the general public. In corporate governance, the role of accountants is two-fold. The ﬁrst is to report the ﬂow of capital in and out of various departments and monitor the undertakings carried out with the capital and where the capital is being invested. The second is to ensure a proper framework of accountability and transparency to address the interests of stakeholders. The role of accountants in corporate governance has been explained in details in the section below: I.

Disclosure and Transparency Management: The OECD principles of corporate governance mandate organizations to honestly disclose all information, including their ﬁnancial status, performance and ownership, to stakeholders for maintaining transparency. Disclosures help improve the public understanding about a company’s structure and activities, its corporate policies and its performance.

II. Planning: Accountants come very handy while planning strategies for governance compliance. Companies can plan effective business strategies based on the information made available by accountants. They can decide how to function, where to invest, when to invest and how much to invest so that returns are good and stakeholders are also happy. III. Public Accountability Management: Companies are accountable to the public in several ways. Organizations should meet their obligations, such as paying taxes, to the public. Based on the ﬁnancial status of organizations, stakeholders consider making investments. Accountants play a major role in ensuring the data reaching stakeholders is accurate and not misrepresented. IV. Cash Flow Management: Accountants help companies not just plan long-term strategies, but they also help addresses short-term and the

ARTICLE everyday necessities in organizations. Maintaining a healthy cash flow is one of the major responsibilities of accountants. They draw a clear picture of how much cash a company has in-hand, which helps prioritize and take crucial financials decisions. V. Financial Reporting and Management Reporting: Though organizations have several departments that may or may not be interdependent, all of them are bound by a common thread called accounting. Financial reporting entails the reporting of company financials to stakeholders, whereas management reporting involves the internal management. Accountants have to manage both these processes and consolidate the company’s financial data to report accurate figures. Financial reporting helps stakeholders by offering valuable insights into the company financials. e. Company Secretary: The secretarial department is the gatekeeper of all corporate governance activities in organizations. Company Secretary is an effective driver and key player as well as the controller of the functions of an organization. A Chartered Secretary professional can be an efficient person if he possesses multi-disciplinary understanding of every organizational process from information systems and data security to company law, accountancy, finance, human resources, corporate governance, taxation, personnel work and the behavioral sciences. A Company Secretary’s responsibilities and duties can cover a broad spectrum of activity. These can include: Governance, risk management and compliance policy and practice •

•

Advising directors and ofﬁcers on director duties, the Corporations Act, the organization’s constitution, stock exchange and other regulatory and statutory requirements. Advising the board (or governing body) on corporate governance principles and the implementation of governance programs and risk management frameworks. Developing, implementing, communicating and maintaining governance, risk and compliance policies, processes and procedures. Maintaining the corporate structure, including subsidiaries and associated administration.

Corporate strategy administration

and

board

management-

•

Carrying out the board’s or governing body’s instructions.

•

Implementing the corporate strategy (especially giving effect to board decisions).

•

Monitoring management’s compliance with standing delegations from the board (or governing body) and reporting any breaches.

•

Ensuring corporate accountability by communicating with the organization's stakeholders and broader community.

•

Ensuring information ﬂows effectively within the board (or governing body) and with and between board committees, and between non-executive directors and management.

•

Acting as a conduit between members (especially major and institutional investors in listed companies) and non-executive directors.

•

Managing board and committee administration.

•

Preparing minutes and meetings (for example AGMs, other general meetings, director and committee meetings).

Board performance, remuneration and evaluation •

Assisting with the recruitment and induction of directors.

•

Facilitating professional development programs for the board.

•

Assisting with evaluations.

•

Overseeing director fees and entitlements.

•

Managing the director handbook/manual.

•

Managing directors’ and ofﬁcers’ insurance.

board

(or

governing

body)

Human resources, legal and ﬁnance •

Advising, where appropriate, on employee beneﬁts and employee incentive plans.

•

Advising on intellectual property asset management (for example patents, trademarks, copy rights, business and domain names) and trade practices legislation.

•

Providing broader legal advice and guidance, for example powers of attorney, work health and safety, employment law, anti-money laundering requirements.

July-September 2019 | 55

•

Advising on relevant ﬁnancial issues - accounting, ﬁnance, taxation, dividend reinvestment plans, superannuation.

safeguarded and utilized with utmost honesty and integrity. This will open the avenues for good governance in corporate arena of the country.

•

Monitoring organizational investments.

•

Advising, where required, on environmental issues.

Conclusion

•

Advising on privacy legislation.

Financial Auditor: One of the primary roles of external auditors in corporate governance is protecting the interests of shareholders. This is possible because external audit reports are conducted independently without the company’s influence. External auditors report the state of a company's finance and attest the validity of financial reports. They ensure that the board receives accurate and reliable information. The board may also question the auditors' views and assessment on the appropriateness of the accounting principles used by a company.

g. Compliance Auditor: Compliance auditors examine the compliance status to the Corporate Governance Code which is an independent scrutiny, examination and audit with regards to compliance of CG code, provisions of Bangladesh Secretarial Standards BSS) as adopted by the Institute of Chartered Secretaries of Bangladesh, standard secretarial practices, maintenance of proper books and records under Companies Act 1994, the securities laws and other relevant laws. The auditors issue compliance certiﬁcate mentioning compliance or non-compliance on various criteria/conditions as imposed by the Securities & Exchange Commission. Yet there is enough scope for the auditors to exercise their legal and discretionary judgments and professional skepticism to the governance of the reporting entity. It requires that regulators empower them to act as real auditors instead of current practice of ticking on compliance conditions so that stakeholders’ interest are protected,

56 | July-September 2019

Now the world is more concerned regarding Corporate Governance and Bangladesh is also trying to be on the same track. Corporate Governance is mandatory requirement for all listed companies of the country. It is true the application of proper corporate governance is a daunting task which moves the companies in the right direction. Most of the companies are not well equipped for this practice. The wheel of effective governance have many spokes, such as behavior, structure, competencies, ethics, integrity, expectations etc. If one of these spokes breaks down, the board will have a ﬂat tire, and the faulty governance process can compromise the organization's ability to move forward. But companies have the signiﬁcant shortage of these spokes and lots of deviation from global best practice is seen which is needed to be checked out for the betterment of the organization and also for this profession. References 1. The Companies Act 1994 2. BSEC Corporate Governance Code 3. Securities Laws & Regulations 4. Bangladesh Secretarial Standards(BSS) 5. Bangladesh Accounting Standards (BAS) 6. The Bangladesh Auditing Standards (BSA) 7. ICSB Publications 8. Different Websites

» About the Author Associate Member of the Institute

ARTICLE

ROLE OF COMPANY SCERETARY FOR IMPLEMENTING IT GOVERNANCE IN ORGANIZATION A.B.M. Kalim Ullah QCS

ntroduction

Corporate Governance generally has taken on even greater significance. Information and technology (IT) governance is a subset discipline of corporate governance, focused on information and technology (IT) and its performance and risk management. The interest in IT governance is due to the ongoing need within the organizations to focus value creation efforts on an organization's strategic objectives and to better manage the performance of those responsible for creating this value in the best interest of all stakeholders. It is being recognized that IT has a pivotal role to play in improving corporate governance practices, because critical business processes are usually automated and directors rely on information provided by IT systems for their decision making. Due to effective application of IT and Internet, organizations are now able to provide online products and services 24 x 365 hours to any customer in the globe. In the context of developed global economies, use of IT and IT based services are part of their day to day operation and one of the main determinants of their efficiency. Nearly 90 percent of the organizations in our country do not have full-fledged information technology (IT) governance despite growing number of activities being carried out through the IT system. This is a matter of concern for Bangladesh as IT governance is extremely necessary for organizations operating locally and across the world, as the global economy leans increasingly toward internet banking, online transactions, cashless methods of payment and more. IT Governance supports businesses to effectively manage IT resources by different frameworks. IT Governance support companies to manage and control IT-related projects, starting with prioritization and justification of IT investments, controlling, budgeting authorization levels. IT Governance is the process of aligning IT investments with the business processes and governmental laws and rules including professional standards, and it manages and controls IT services. Although, IT Governance is part of a wider Corporate Governance activity but with its own specific

focus. The benefits of good IT risk management, oversight and clear communication not only reduce the cost and damage caused by IT failures but also engenders greater trust, teamwork and confidence in the use of IT itself and the people trusted with IT services. What is IT Governance? IT governance can be defined as a formal framework to ensure IT investments support business needs. Essentially, the IT governance infrastructure is what allows certain users to do certain things while prohibiting other users. As often happens with new management models and principles, many different definitions have been developed for IT governance in recent years. Some important definitions that describe IT governance are: IT governance is the responsibility of executives and the board of directors, and consists of the leadership, organizational structures and processes that ensure the enterprise’s IT sustains and extends the organization’s strategies and objectives. IT governance is the organizational capacity exercised by the board, executive management and IT management to control the formulation and implementation of IT strategy and in this way ensure the fusion of business and IT. Enterprise Governance of IT (EGIT) is an integral part of corporate governance and addresses the definition and implementation of processes, structures and relational mechanisms in the organization that enable both business and IT professionals to execute their responsibilities in support of business-IT alignment and the creation of business value from IT-enabled business investments. The recent change to speaking about ‘enterprise governance of IT’ instead of ‘IT governance’ ensures that the primary responsibility of the business is stressed, thereby ensuring that IT governance does not

July-September 2019 | 57

remain a debate within IT. IT governance is integral to overall corporate governance. IT governance allows organizations to encourage desirable behavior when using IT. There are three key aspects: What are the essential decisions that must be made for effective management and IT usage (IT domains)? By whom should they be made (governance styles)? How will they be monitored to ensure control (mechanisms)? Well-designed, well-understood and transparent governance mechanisms are critical. Building and maintaining these mechanisms forms a continuum that requires desire for change, identiﬁcation and accountability for required changes, and ongoing monitoring to ensure that the desired results are achieved. Implementing IT Governance Effective implementation of IT governance in the business units of an enterprise involves the process of institutionalization (e.g., changes in culture and behaviors of people), effective use the processes, tools and metrics. Many times, IT governance implementation fails due to ineffective institutionalization. Quite often, the root cause can be traced to lack of business-unit executive buy-in. Therefore, a critical success factor is earning buy-in from business-unit executives. Implementation of IT governance in an enterprise’s business units is no easy task. Company Secretary (CS) can play a vital role to make bridge between IT team and business-unit. There is a potentially widening gap between what IT departments think about the business requires and what the business thinks about the IT department is able to deliver. CS can easily reduce these gap. There are many strategies and tactics necessary to change the culture and behaviors of people for the usage of processes, tools and metrics. Most of the time, IT prepares business cases using a standard company template and converts them to slides for presentation. It is no wonder that the end result is a failure of the business-unit executives to understand the scope of the effort and a negative response. Business case presentations need to clearly communicate the scope, be easily understood by business executives and be presented in an hour-long meeting. The following steps outline a process to determine the strategies, tactics, beneﬁts and metrics to formulate and implement effective IT Governance:

58 | July-September 2019

Initiate a program Company Secretary (CS) needs to understand the value proposition and narrate the proposition to key stakeholders. CS also determines the drivers. The impetus for IT governance is a desire for change that stems from the strategic plan of the business, from which the IT strategic plan is derived. This requires obtaining ownership at the board and executive level, establishing initial awareness and involvement of business and IT management, and establishing an IT governance project organization. CS should ensure that there is a transparent and understandable communication of these IT activities and management processes to satisfy the Board and other interested stakeholders. Define problems and opportunities Company Secretary (CS) will define the problems and opportunities. Where are we now? The next step is to assess existing IT governance processes (as-is situation assessment) and identify problems and opportunities. At this point, a team should be identified and charged with detecting problems and opportunities in later phases. Performance measurement Is the ship “on course”? Performance measurement is a key component of IT Governance. It verifies the achievement of strategic IT objectives and provides for a review of IT performance and the contribution of IT to the business. Performance measures are required to ensure that the outcomes of IT activities are aligned to the customer’s goals. Internal IT process measures are required to ensure that the processes are capable of delivering the intended outcomes in a cost effective manner. Advanced performance measurement enables the measurement of key aspects of IT capability such as creativity and agility (new ideas, speed of delivery and success of a change programme), development of new solutions, ability to operate reliable and secure services in an increasingly demanding IT technical environment, and the development of human resources and skills. Implementation roadmap The roadmap begins with establishing clear goals and objectives in order to align effort with the real needs of the enterprise, to manage expectations, and to ensure continual focus. The roadmap then consists of activities to get started, followed by the key implementation tasks with suggested roles and responsibilities. IT Governance is an ongoing task and therefore this roadmap is only the initial phase of what needs to become an iterative sustainable approach.

ARTICLE The roadmap is an iterative lifecycle that begins with an initial phase to deﬁne overall goals and to gain the support and commitment of top management which then leads to the ongoing effective governance of IT activities. Typical objectives of the initial implementation phase: •

Deﬁne the meaning of governance in your organisation and where/if IT Governance ﬁts.

•

Identify any organisational/environmental/cultural constraints and enablers.

•

Achieve a broad understanding of IT Governance issues and beneﬁts across all stakeholders.

•

Agree, publish and gain acceptance of an initial IT Governance framework, tools and processes.

•

Completion of an initial gap analysis against best practice – to demonstrate where IT Governance is already in place and to highlight areas of focus for the roadmap.

•

Creation of a Project Initiation Document (PID) and/or Terms of Reference (ToR) that has the support of stakeholders.

•

Creation of a Project Plan with deﬁnition and prioritization of the initial IT Governance (ITG) project deliverables

•

Identiﬁcation and commitment of the resources required to deliver this initial project.

•

Identiﬁcation and sign-off of Key Performance Indicators and Critical Success Factors for this project.

•

Documented estimated timescales and resource implications as well as expected ROI.

•

Alignment of the IT Governance (ITG) Initiative with business objectives/strategy.

As mentioned earlier, if it is difficult for those literate in technology and relatively close to the IT function, then it is even worse for the end customer who finds technical jargon a smokescreen and lack of information relevant to his business a major headache. Communication and cultural behaviour, based on appropriate influencing strategies are therefore key ingredients of any IT Governance improvement programme. In order to best influence stakeholders, and communicate the major objectives and benefits of IT Governance throughout the organisation, the right language must be used. Given the significance of IT both in terms of investment and potential impact on the business – the risks of IT and of failing to exploit IT for strategic advantage must be stressed in any communication about IT Governance. Wake-up calls are sometimes required at the highest levels. Stakeholders must understand and feel responsible for safeguarding against IT risks. Effective communications will ensure that “everyone is on the same page” – that key issues have been grasped, objectives have been positively accepted by management and staff, and everyone understands their role. Plan program Company Secretary (CS) should chalk out, what needs to be done. The IT project work commences in this phase by establishing effective governance. This includes identifying people and groups to be involved (and their level of involvement), such as the IT steering committee, the IT project steering committee and the chief information officer (CIO). In addition, an IT project governance methodology, IT portfolio management, budget control and reporting standards are established.

Communications Strategy and Culture

Execute plan

IT Governance and risk management is about improving the management and control of IT activities and enabling top management to exercise proper oversight. To achieve this, better processes, controls, best practices and management techniques are required. However, all of these improvements will only have a chance of succeeding in a sustainable way if the culture of the organization is changed to drive and support the desired new management approach.

Obtaining the participation of the business is paramount, and can often be greeted with resistance. Accordingly, it is critical to focus on relational and change management mechanisms. Parties can be brought on board through alignment processes (e.g., IT investment approval process, architecture exception process, service level agreements, formal tracking of business-IT value) and effective communication (e.g., executive announcements; formal/ad hoc committee work; IT governance education delivered by the CIO; working with managers who stray from desirable behaviours; increasing transparency by housing policies, standards and performance on web-based portals).

Effective communications are a key enabler of these changes, just as poor communications can create a legacy of misunderstanding, lack of trust, and technical mystique and hype in many organizations.

July-September 2019 | 59

Realize benefits In this phase, the effectiveness of IT governance implementation is determined by considering a number of factors, including a comprehensive model for managing all IT resources, improved executive participation, strategies and business objectives for IT investment, alignment between the business and the IT department, decision making and communication, perception of IT value, IT risk management, return on assets, lower IT costs, transparency of IT, IT performance tracking, and IT innovation.

prioritization of IT resources and projects in line with business needs and should be composed of executive management, business and IT representatives. This committee structure will provide the oversight and direction of IT investments, ensuring accountability at senior level and proper involvement of all stakeholders. 1. Set Objectives •

Align IT goals with business goals.

•

Meet stakeholders’ needs by creating a balance between the beneﬁt realization, risk optimization and resources optimization.

•

Provide sufﬁcient information and reports to support the decision making process for the governance and management of enterprise IT.

•

Establish effective and prudent IT project management and IT resources management processes.

•

Establish technology infrastructure and information systems that enables the banks’ business strategies

•

Optimize IT risk management to ensure the necessary protection of the Bank’s assets and operations.

•

Comply with external and internal regulations and requirements.

•

Maximize end user’s satisfaction level of IT services.

•

Manage third parties/vendors relationships.

Capability assessment Finding out the true current state of IT governance. Monitoring and assessing the adequacy of IT Resources (people, applications, technology, facilities, data) to ensure that they are capable of supporting the current and proposed IT strategy is a key aspect of IT Governance. In many organisations board level management have a very unclear view of their IT capability, and find it very difficult to understand the technical and organisational IT environment upon which they increasingly depend. Often inadequacies only manifest themselves when projects fail, costs spiral, operational systems crash, or service providers fail to deliver the value promised. Improving the maturity of IT capability both reduces risks and increases efficiency-cost saving is often a justification. Review effectiveness The final phase of the continuum entails monitoring and reviewing IT governance, planning for its sustainment, and assessing its effectiveness. This should include shifting focus from relational mechanisms to improving structures/processes once the governance framework is embedded. In addition, a performance management system (balanced scorecard) should be introduced to facilitate continuous monitoring of IT governance effectiveness and ongoing framework enhancement. Role of Company Secretary in IT Governance Company Secretary (CS) can play a significant role in practicing good IT governance. CS will ensure and help the organization to establish an IT Council (or Strategy Committee or IT Governance Committee or similar group) at board level to ensure that IT governance, as part of corporate governance, is adequately addressed. This committee reviews major investments on behalf of the full board and advises on strategic direction. Below this committee an IT steering committee (or equivalent) should be established to oversee the IT function and its activities and developing IT plans. The committee should determine

60 | July-September 2019

2. Establish IT Governance Committee IT governance committee is established to support the board of directors with regards to the Governance of Enterprise IT. Scope and purpose: The scope and purpose of the IT Governance Committee is to ensure IT objectives are in line with the organization’s strategic direction and to ensure that the stakeholders’ needs are met by creating a balance between beneﬁt realization, risk optimization and resources optimization. Members & Meetings: The IT Governance Committee is comprised of three board members. The Committee meets on a quarterly basis or as required. 3. Establish IT Steering Committee The IT Steering Committee is established to support the IT Governance Committee in relation to the Management of Enterprise IT implementation practices.

ARTICLE Scope and Purpose: The scope and purpose of the IT Steering Committee is to ensure business and IT alignment and create a balance between beneﬁt realization, resources optimization and IT risk optimization. Members & Meetings: The IT Steering Committee is comprised of the following members: •

Chairman of the committee

•

Chief of Business and Investment

•

Chief of Support and Operations

•

Chief of Risk Management

•

Head of Information Technology

•

Head of Operations

•

Information Security and Business Continuity Manager

•

Head of Enterprise Project Management Ofﬁce & Enterprise Architecture and,

•

Two observers, which include a Board member and Head of Internal Audit.

Reference 1. IT Governance Institute and Price water house Coopers, An Executive View of IT Governance, USA, 2009, www.isaca.org/bookstore 2. IT Governance Institute, Global Status Report on the Governance of Enterprise IT (GEIT)—2011, ISACA, USA, 2011, www.isaca.org/bookstore 3. Parent, Michael; Blaize Horner Reich; Building Better Boards: Governing IT Risk, Segal Graduate School of Business, 2007, p. 1, http://beedie.sfu.ca/ﬁles/PDF/cibccentre/ParentReich _Building_Better_Boards.pdf 4. Van Grembergen, Wim; Steven De Haes, Guidelines for the Implementation of Enterprise Governance of IT, Springer Science, USA, 2009 5. De Haes, S.; W. Van Grembergen; “Analysing the Relationship Between IT Governance and Business/ IT Alignment Maturity,” Proceedings of the 41st Hawaii International Conference on System Sciences (HICSS), 2008, www.uams.be/itag

The IT Steering Committee meets on a quarterly basis or as required.

6. Weill, P.; J. Ross; IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, Harvard Business School Press, USA, 2004

4. Set Enablers

7. Op cit, De Haes, 2008; Van Grembergen, 2009

Seven enablers/factors that individually and collectively inﬂuence IT Governance Process. These seven enablers include:

8. Henderson, J.; N. Venkatraman; “Strategic Alignment: Leveraging Information Technology for Transforming Organizations,” IBM Systems Journal, vol. 32, no. 1, 1993

•

Principles, policies, and frameworks.

•

Processes.

•

Organizational Structures.

•

Culture, ethics, and behaviour.

•

Information.

•

Services, infrastructure, and applications.

•

People, skills, and competencies.

Conclusion The outcomes of a successful implementation are worth the challenge, producing both short-term, tangible beneﬁts (such as reduced cost) and long-term beneﬁts (such as enhanced management of IT-related risk, improved relationships between business and IT, and increased business competitiveness). Leveraging the leading practices that have been outlined will assist the board and C-suite executives on their journey to IT governance effectiveness.

9. Sledgianowski D.; J. Luftman; R.R. Reilly; “Development and Validation of an Instrument to Measure Maturity of IT Business Strategic Alignment Mechanisms,” Information Resources Management Journal, vol. 19, no. 3, 2006, p. 18-33 10. Op cit, Luftman and Kempaiah 11. ISACA, Glossary, www.isaca.org/glossary 12. Op cit, Ridley. These authors argue, for example, that large enterprises will implement the COBIT framework more often and more rapidly than SMEs. 13. IT Governance Institute, COBIT Quickstart, 2nd Edition, 2007 14. BIBM Research Monograph

» About the Author Qualiﬁed Chartered Secretary of the Institute

July-September 2019 | 61

ROLE OF THE GOVERNANCE PROFESSIONALS Md. Anower Hossin

Introduction

In Bangladesh, Company Secretarial practices are carrying out by the governance professionals like chartered secretaries who are experienced and learned. They are deployed in listed companies by laws but they also found in non-listed companies and in the organizations of the public and not-for-proﬁt sectors. The reason is that organizations are recognizing the importance of corporate governance and of having someone responsible for it within the organizations. There is no doubt that Chartered Secretaries are indeed the preferred persons who are expert in corporate governance and they have to achieve qualities to perform their effective role to ensure governance within the organization. Governance Governance is more than just complying with laws, regulations, standards, and codes; it is also about creating cultures of good practice. This means that corporate secretaries need more than the technical skills and experience to know what corporate governance practices are needed in an organization and why organizations need to put in place structures, policies, and procedures that comply with best practice. For good governance to be present, the people who work in the organization need to apply/ practice these structures, policies, and procedures to create a culture within the organization that enables them to work effectively. Corporate secretary’s governance role A good Company/ Corporate secretary should be able assist the organization with the creation of the culture and the relationships required to ensure the infrastructure is implemented, managed, and maintained effectively for the success of the organization. The three main areas, a Company Secretary has the role to play viz. to the Board, to the Company and to the Shareholder. Within each, the Company Secretary’s role can be very assorted.

62 | July-September 2019

To the Board A Company Secretary must ensure that the procedure for the appointment of directors is properly carried out and assist in the proper induction of Directors, including assessing the specific training needs of directors/executive management. Secretary needs also to be available to provide comprehensive practical support and guidance to directors both as individuals and as a collective with particular emphasis on supporting the non-executive directors. To the Company Secretary ensures compliance with all relevant statutory and regulatory requirements and that due regard is paid to the specific business interests of the company. To the Shareholder The Company Secretary needs to communicate with the shareholders as appropriate and to ensure that due regard is paid to their interests. He/she also need to act as a primary point of contact for institutional and other shareholders, especially with regard to matters of Corporate Governance. Governance skills of Corporate Secretaries As chief governance specialist, the role of CS is a more proactive role than in previous times. The dynamics of the boardroom are changing and chairmen and directors are realizing that they need specialist skills and technical knowledge in this area and they are looking for company secretaries to provide this expertise. Some countries have requirements in law, regulations, standards, or codes for the qualifications for carrying out the role of corporate secretary. The technical skills i,e directorial skills, pro-governance expertness, converting long-term goals into action plans, good negotiation skills, sound judgment & decision skills, identifying opportunities and threats, applying strategic perspectives with keen eyes,

ARTICLE ensuring legal compliance effectively & efﬁciently etc. are the necessary for a governance professionals. Reporting lines of the corporate secretary Reporting of the corporate secretary will differ from organization to organization, depending on the duties assigned to the corporate secretary and the size of the organization. The corporate secretary should be responsible to the board and should be accountable through the chairman on all matters relating to his or her core duties in relation to the board. Conclusion As governance professional a company secretary need to apply his/her technical and professional skills to manage the board, management and shareholders/ stakeholders relations by complying with the codes of governance. Therefore, Chartered Secretary has the relevant professional skills and competencies to work as company secretary.

Source 1. “The Corporate Secretary: The Governance Professional” International Finance Corporation’s publication, World Bank Group. http://www.ifc.org/wps/wcm/connect/Topics_Ext_ Content/IFC_External_Corporate_Site/IFC+CG 2. “The Role of the Governance Professional” by Shery Cardwellon 17 Jan 2019 3. “Corporate Secretary Roles and Responsibilities “Written by Jeremy BarlowMarch 2, 2016 4.

Corporate Governance Codes by Bangladesh Securities and Exchange Commission on 03.06.2018

5. Bangladesh Secretarial Standard(s) 6. ISCB Journals 7. www.Company secretarybd.net

» About the Author Student of ICSB

July-September 2019 | 63

NOTIFICATIONS JULY-SEPTEMBER 2019

NOTIFICATION July-September 2019 | 65

66 | July-September 2019

NOTIFICATION July-September 2019 | 67

68 | July-September 2019

NOTIFICATION July-September 2019 | 69

70 | July-September 2019

Itrat Husain FCMA, FCS