Volume : XXI
Issue : 1
January-March 2019
ICSB's Corporate Governance Excellence Award-A Sustainable Governance Initiative (SGI)
R E FO NC OR CE ED LLE F N PIR XCE ED LLE S R N E PI TI G CE al GE NIN INS EX 9 ion D 1 R 20 at AN OVE ET ING r, ntern IRE G G D G RN e P b I ) m INS OTIN AN VE ve hu ICC a M E GO No and r (B hak RO IR
G P SP 30 ab te , D IN OTIN day, Bang Cenagar e s OM Thur Hall, rencngla N R e a P rityConfr-e-B b e l e Ce Sh
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 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 in the corporate sector. Chartered Secretary is a 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 2016-2019
Mohammad Sanaullah FCS Safiar Rahman FCS Md. Selim Reza FCS Nazmul Karim FCS Mohammad Asad Ullah FCS Itrat Husain FCS Md. Shahid Farooqui FCS Md. Azizur Rahman FCS A. K. M. Mushfiqur Rahman FCS Mohammad Bul Hassan FCS Gopal Chandra Debnath FCS Md. Anwar Hossain Chowdhury FCS Salim Ahmed FCS Pranesh Ranjan Sutradhar, Additional Secretary, GoB Mohammad Manzarul Mannan, Joint Secretary, GoB Dr. Mohammad Mohiuddin, Joint Secretary, GoB Khandaker Kamaluzzaman, Commissioner, BSEC Md Zakir Hossain, Registrar, RJSC, GoB
EDITORIAL BOARD
Editor Prof. Dr. Feroz I. Faruque FCS Members Itrat Husain FCS Md. Bazlur Rahman Sikder FCS Kazi Ashiqur Rahman FCS Subash Chandra Moulick FCS Mohammad Shahajahan FCS Md. Shiful Islam ACS
SUBSCRIPTION RATE
For Students Others
Design & Print
: : : : : : : : : : : : : : : : : :
: per copy Tk. 100; per year Tk. 350 : per copy Tk. 150; per year Tk. 560
President Senior Vice President Vice President Treasurer Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor
IN THIS ISSUE
Editorial
3
The Council 2016-2019
4
Message from the President
5
Institute News
8
ARTICLES ICSB Award for 'Excellence in Corporate Governance': A Sustainable Corporate Governance Initiative (SCGI) -Prof. Dr. Feroz Iqbal Faruque FCS Why The CEO-Chair Split Matters? -Bipul Kumar Bhowmik FCS
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
22 26
First ICSB Corporate Governance Excellence Award- How the Milestone was Created -Mohammad Nurul Alam FCS
29
ICSB National Corporate Governance Excellence (CGE) Award: An Incentive for Sustainable Corporate Governance in Bangladesh -Mohammad Shahajahan FCS
31
Corporate Governance Recognition: An encouraging tool for Sustainable Business Development -Md. Shiful Islam ACS Corporate Governance Excellence towards achieving a balanced & sustainable growth through implementation of SDGs: world’s best practice & learning for Bangladesh -Mir Shariful Bashar ACS
34 36
Recognition for Corporate Governance Excellence -Md. Mizanur Rahman QCS
39
Corporate World to Travel Extra Miles for Recognition and Rewards -Md. Sohel Mollick
42
NOTIFICATIONS
44
EDITORIAL
this issue...
ICSB’S INITIATIVE FOR SUSTAINABLE CORPORATE GOVERNANCE EXCELLENCE
arch 2019
January-M
Volume
: XXI
Issue : 1
vernance rporate Go inable ICSB's Co -A Susta ce Award tive (SGI) Excellen nce Initia rna ve Go
R E R CE FO NC FO EN ED LLE 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 Hanferen an rityCo er-e-B leb Sh Ce
PR
H
ad there been no proper legal covering (Act) in 2010 and CS Regulations 2011 to protect and flourish ICSB there would be minimum half a dozen of such institutes in the country by now. In one hand there were tremendous oppositions, resistance to mitigate on the other hand financial constraints to face. The ever first such kind of institute was established in 1902 in England and in Bangladesh it was established after 96 years in 1997 as ICSMB and later after lots of sweats and back and forth an Act was passed in the Bangladesh Parliament only in 2010 and CS Regulations in 2011 and the name was changed to ICSB. Global markets may have had a buoyant fiscal year(s), but this does not always result in high standards of corporate governance. When things are going well, it’s all too easy to let standards slip and regulations fall by the wayside. At times like this, strong leadership is needed more than ever if companies are to meet the highest standards. As such, some organizations remained committed to upholding a certain level of moral and ethical integrity, championing the values of transparency, sustainability and inclusivity. These are the
businesses that have been recognized by the World Finance Corporate Governance Award. With corporate governance benchmarks shifting all the time, businesses cannot afford to rest on their laurels – what may have been considered acceptable in the past, may fall well below the expected standards of the present. In this era of gender equality companies that continue to marginalize female members of staff and allow gender pay gaps to persist, for example, are now likely to face a backlash from employees, investors and regulatory bodies alike. In order to avoid such issues, companies must be proactive in their corporate governance policies. This is especially true when implementing technological innovations that may come with new privacy and security risks. The ongoing threat posed by cybercriminals and the forthcoming introduction of the General Data Protection Regulation (GDPR) should ensure that businesses keep up to date with the latest corporate governance challenges.
Prof. Dr. Feroz I. Faruque FCS Editor
January-March 2019 | 3
Mohammad Manzarul Mannan Joint Secretary, GoB
Councilor Dr. Mohammad Mohiuddin Joint Secretary, GoB
Secretary in Charge to the Council
Md. Shamibur Rahman ACS
4 | January-March 2019
D
ear Professional Colleagues,
It is with great pleasure that I wish you all a very happy and prosperous year 2019. We wish to be the most respectful professional Institute of the Country. We have the courage and preparation to be the most respectable professional as we have experienced and knowledgeable members. The year 2018 was eventful in many aspects. It is with an unconditional trust that the corporate sector of Bangladesh has given us their confidence. Institute of Chartered Secretaries of Bangladesh (ICSB) successfully organized the “7th National Convention 2018”, “7th Convocation” and “5th ICSB National Award for Corporate Governance Excellence, 2017” in 2018. As President of ICSB I was invited to many places and I participated in most of the events and tried my best to portray the Institute to a level. At the outset, I would like to thank all of you for your generous support and reposing your faith in me and the Council to serve our beloved Institute in this capacity. I thank the Council Members who stood beside me and helped me to carry out the works smoothly during my tenure. My decisions are always instantaneous but implementations are time bound and I am confident that the person who takes over the chair from me will fulfil the pending tasks of my tenure successfully. As you know, 2019 would be a very important year for ICSB. It is time to hold 4th council election in 2019. We hope you will be willing to participate in the next council election and that would be an opportunity for the deserving members who are ready to serve the profession and can develop
the profession. My humble request to all the members is to please elect the Council Members considering the personality and capability of leading the Institute to the highest standard. You all are aware that section 174 of the Income Tax Ordinance, 1984 and Rule 37 of the Income Tax Rules 1984 provides the eligibility of Chartered Secretaries as Income Tax Practitioner (ITP). It only requires inclusion of Chartered Secretary Profession in the respective section and rules. We had requested NBR for including Chartered Secretary profession in the Income Tax Ordinance 1984 but it is yet to be included. This year we have applied again and we request all the members to work on this from their own end to include our members and profession as ITP and Mushak Agent in the Income Tax Ordinance and VAT Act. I am thankful to the Bangladesh Securities and Exchange Commission (BSEC) for accepting a number of suggestions and Secretarial Standards in the Corporate Governance Code 2018 as a result of which much progress can be expected in the corporate sector of Bangladesh. Finally, I would like to thank the Journal and Publication Committee for their initiatives and passionate work in the preparation of the journal. May Allah help us to make the Institute a world class professional Institute in the Country. Kind Regards
Mohammad Sanaullah FCS
PRESIDENT
January-March 2019 | 5
MESSAGE FROM THE PRESIDENT
CHARTERED SECRETARY-A HUMBLE PROFESSION
THE FOUNDING MEMBERS OF ICSMB (NOW ICSB)
C.S.
ADMISSION NOTICE
JULY-DECEMBER
IF 2019 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 July-December, 2019 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 Applications in prescribed forms are invited from the business graduates or MBA/MBM/MBS/CA/ACCA/CMA who are interested to pursue the CS Course for enrollment in its Executive Level-I of July-December, 2019 Session.
DATE OF APPLICATION & ADMISSION TEST
MINIMUM ELIGIBILITY
Application form is available from - May. 12, 2019 to June 20, 2019 Last date of submission of application - June 24, 2019 (Original Certificates must be shown at the form submission time) Admission Test (Friday) - June 28, 2019 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
INSTITUTE NEWS January-March 2019
I
NTERNAL MEETINGS
ICSB Council Meets with Honorable Commerce Minister, Mr. Tipu Munshi, MP
Meetings of the Council and Standing Committees
The Council Members of the Institute of Chartered Secretaries of Bangladesh (ICSB) led by its President, Mohammad Sanaullah FCS called on Mr. Tipu Munshi, MP Hon’ble Minister, Ministry of Commerce, Government of the People’s Republic of Bangladesh on January 14, 2019. On behalf of the Council the President congratulated him on assuming the office of the Minister, Ministry of Commerce. The President introduced the Council Members to the Hon’ble Minister and apprised him about the various activities that ICSB undertook for professional development of its Members as well as its future plans.
Meetings of the following Council and Standing Committees were held during the quarter: •
The Council Meeting was held on March 04, 2019;
•
The Examination Committee meetings were held on January 27, 2019 and March 04, 2019;
•
The Education Committee meeting were held on February 03, 2019 and March 07, 2019;
•
The Research and Development Committee meeting was held on February 05, 2019; and
•
The Executive Committee meeting was held on March 04, 2019.
Meetings of Sub Committees Meetings of the following Sub Committees were also held during the quarter: •
Journal and Publication Sub Committee meetings were held on January 12, 2019, February 25, 2019 and March 24, 2019;
•
Professional Development Sub Committee meetings were held on February 06, February 24, February 26 and February 28, 2019;
•
Dhaka Regional Chapter Sub Committee meetings were held on February 09, 2019 and March 30, 2019;
•
International Relations Sub Committee meeting was held on February 16, 2019;
•
Seminar and Conference Sub Committee meeting was held on February 24, 2019;
•
Information Technology Sub Committee meeting was held on March 23, 2019; and
•
CS Regulations Sub Committee meetings were held on March 25, 2019 and March 30, 2019.
8 | January-March 2019
The President of the Institute requested the Hon’ble Commerce Minister to incorporate ICSB’s recommendations on the proposed Companies Act. The President also briefed the Hon’ble Minister about the introduction of Corporate Governance Award by ICSB. Hon’ble Minister appreciated the role of ICSB in promoting professionalism and development of the Company Secretaries profession in the country. He also appreciated that the ICSB has been providing international standard professional education in the country and appreciated the steps taken by the Institute for corporate governance and professionalism in corporate culture in line with UK, India and other developed countries of the world so that its Members can compete with other professionals and get employment at home and abroad. He also assured that, we will work together for the betterment of the Institute.
ICSB delegates with Commerce Minister
Md. Selim Reza FCS, Vice President, Nazmul Karim FCS Treasurer, Mohammad Asad Ullah LL. M, FCS, Council Member, Itrat Husain FCMA, FCS, Council Member, A.K.M. Mushfiqur Rahman FCS, Council Member, Gopal Chandra Debnath FCS, Council Member, Dr. Mohammad Mohiuddin, Council Member, Md. Abdus Salam Khan FCS, Fellow Member, Kazi Md. Shamsul Alam, Secretary and Md. Shamibur Rahman ACS, Director (A&F) of the Institute were present during the meeting. ICSB Council Meets with Commerce Secretary, Mr. Md. Mofizul Islam The Council Members of the Institute of Chartered Secretaries of Bangladesh (ICSB) led by its President, Mohammad Sanaullah FCS called on Mr. Md. Mofizul Islam, Secretary, Ministry of Commerce, Government of the People’s Republic of Bangladesh at his office at Bangladesh Secretariat on January 16, 2019. On behalf of the Council the President congratulated him on assuming the office of the Secretary, Ministry of Commerce then the President introduced the Council Members to the Secretary and apprised him about the various activities that ICSB undertook for professional development of its Members as well as its future plans. The President requested the Commerce Secretary to provide adequate budget and allotment of Land for the Institute’s campus. The Commerce Secretary gave a patient hearing to various activities of the Institute and appreciated the role of ICSB towards the development of the Company Secretaries profession in the country. He also assured about the continuous support from him.
ICSB delegates with Commerce Secretary
The Council Members thanked the Commerce Secretary for giving his valuable time and hoped that his continued support and guidance will help the Institute to move forward to achieve its objectives. Mohammad Asad Ullah FCS, Council Member, A.K.M. Mushfiqur Rahman FCS, Council Member, Gopal Chandra Debnath FCS, Council Member, Kazi Md. Shamsul Alam, Secretary and Md. Shamibur Rahman ACS, Director (A&F) of the Institute were present during the meeting. ICSB Annual Picnic 2019 Like every year ICSB arranged Annual Picnic to get relief from the monotony of our routine life. The Annual Picnic-2019 of ICSB was held on Friday, January 25, 2019 at Apon Bhuban Picnic and Shooting Spot, Khilgaon, Pubail, Gazipur under the supervision of the Salim Ahmed FCS, Chairman, Members’ Welfare and Recreation Sub-Committee of ICSB. Indeed it was a naturally beautiful spot but very close to Dhaka city. This year the highest number (725 nos) of members along with their guests, spouses and children participated in the picnic. The picnic was inaugurated by Mohammad Asad Ullah FCS, Immediate Past President of ICSB by releasing Balloons and Festoons. The Council Members, Fellow Members, Associate Members and Qualified Chartered Secretaries have participated in the inauguration program. There were colorful and attractive events for the participants in different categories. Biscuit Race and race for children, pillow pass for ladies, dirt game, ball basketing for families, ball pass for senior members, balloon busting for young members and football for members. And beyond this, there is also arrangement of recitation of rhymes and poems by the Children and songs by the members, spouses and Children.
Council Members of ICSB inaugurated Annual Picnic 2019
January-March 2019 | 9
INSTITUTE NEWS
The Council Members thanked the Hon’ble Minister for giving his valuable time and hoped that his continued support and guidance will help the Institute to move forward to achieve its objectives.
Snapshots of Annual Picnic 2019
Apart from this, Member of the year and a lucky couple of the year were selected from the participants and gifts were an exclusive 52 pcs dinner set and an exclusive gift pack accordingly. There was 55 lucrative and valued gift in raffle draw Those were sponsored by Members and from their companies as well. Among which Dhaka- Singapore-Dhaka Couple Air Ticket, Blue Room Air Purifier and Dhaka-Malaysia-Dhaka Single Air Ticket were the first, second and third prize respectively. Overall, the annual picnic 2019 was especially enjoyable for children. Participants seemed to be happy after spending a memorable day and leaved the picnic spot with a smiling face. 43rd Batch Inaugurated
of
Chartered
Secretary
Course
Institute of Chartered Secretaries of Bangladesh (ICSB) has organized an orientation program for the students of 43rd Batch of Chartered Secretary Course at ICSB Campus, Dhaka on February 02, 2019 at 03:30 pm. The programme was inaugurated by Mohammad Sanaullah FCS the President of the Institute. Md. Selim Reza FCS, FCA, Vice President of ICSB welcomed the newly admitted students. He discussed
10 | January-March 2019
INSTITUTE NEWS Orientation Programme of 43rd Batch the 21 years 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. Md. Anwar Hossain Chowdhury FCS, Chairman, Examination Committee of ICSB advised students to attend classes regularly and follow the rules and regulations of the Institute. Salim Ahmed FCS Council Member of the Institute also welcomed the students in their new journey of life and also emphasized to attend classes regularly to become a successful Chartered Secretary. 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. A good number of students were present in the program and participated spontaneously during the question and answer session. Student asked various relevant questions regarding CS course and profession. They also highly appreciate the Chartered Secretary profession. The President of ICSB responded to their question. Finally, Nazmul Karim FCS, Treasurer of the Institute gave vote of thanks on behalf of the Institute. Mohan Sohid Dibosh and International Mother Language Day Observed at ICSB ICSB observed Mohan Sohid Dibosh and International Mother Language Day with due solemnity and significance at the ICSB campus. On this occasion, Dhaka Regional Chapter Sub Committee of ICSB
Snapshots of the Programme organized a programme on behalf of the Institute on February 21, 2019 which includes handwriting competition for children, speech on “Use and application of Mother Language on the Spirit of Ekush” and poetry recitation. The programme began with the recitation from the Holy Quran and prayer for the departed soul of Martyrs. Md. Selim Reza FCS, Vice President of the Institute to preside over and inaugurated the program. While speaking on the occasion, he emphasized that the main purpose of celebrating this day is to promote the awareness of language and cultural diversity. He also said that learning to speak in the mother tongue is very important for a child's overall development. Being fluent in the mother tongue benefits the child in many ways. It connects him to his own culture, ensures better cognitive development, and aids in the learning of other languages. Syed Moniruzzaman FCS, Chairman Dhaka Regional Chapter Sub Committee gave concluding speech on behalf of the Institute. In his speech, he gratefully remembered the role of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman and the life sacrifice of the language martyrs to get the right to speak and write in Bangla language. He also said that the Father of the Nation Bangabandhu Sheikh Mujibur Rahman introduced Bangla language in the world by giving speech in Bangla in UN general assembly. Later
January-March 2019 | 11
Chattogram Regional Chapter Sub-Committee on UNESCO decleared 21st February International Mother Language Day
as
the
Among others, Salim Ahmed FCS and A.K.M. Mushfiqur Rahman FCS Council Members of the Institute participated in the programme and gave their speech. A good number of ICSB Members, their spouses and children participated in the programme with patriotic zeal and enthusiasm. ICSB CPD Seminar held on "SDGs: Private Sector’s Roles and Challenges” Institute of Chartered Secretaries of Bangladesh (ICSB) has organized a Continuing Professional Development (CPD) Seminar on "SDGs: Private Sector’s Roles and Challenges” on March 02, 2019.
Mr. M. A. Mannan, MP, Minister, Ministry of Planning graced the seminar as the Chief Guest. He said that Bangladesh is one of the few countries that has achieved its Millennium Development Goals (MDGs) targets faster than projected and is actively engaged in realizing the more challenging SDGs. "To retain the optimum economic growth of our country, establishing corporate governance is essentially needed," he said. He hoped that ICSB would continue to strive hard to produce competent and worthy qualified professionals, who would help to build a prosperous Bangladesh. Md. Abul Kalam Azad, Principal Coordinator, SDG Affairs, Prime Minister's Office, Government of Bangladesh attended the programme as Special Guest. He made a presentation on SDGs and Dr. M. Harunur Rashid, the Chairman of BAC International presented a keynote paper on "SDGs: Private Sector's Roles and Challenges". Mohammad Sanaullah FCS, the President of the Institute emphasized on practicing good Corporate Governance. "Ensuring good governance is the key ingredient to support the company's sustainable growth. Corporate sector also a plays important role in helping to meet the SDGs of the country. The Role of the Company Secretary in Sustainability Governance provides an overview of how governance professionals can support the board's emerging "environmental, social and governance" (ESG) mandate," he said. He
Photo from Left- Mohammad Sanaullah FCS, President, ICSB, Mr. Golam Mainuddin, Vice President, MCCI, Asif Ibrahim, Former President, DCCI, Mohammad Asad Ullah FCS, Chairman, Professional Development Sub Committee and Immediate Past President of ICSB, M. A. Mannan MP, Hon’ble Minister, Ministry of Planning, Md. Abul Kalam Azad, Principal Coordinator, SDGs Affairs, Prime Minister’s Office, Shehzad Munim, President, FICCI, K.H. Masud Siddiqui, Former Secretary, GoB, Professor M. Harunur Rashid Ph.D, Chairman of BAC International, Md. Shafiul Islam (Mohiuddin), President, FBCCI and Md. Azizur Rahman FCS, Director General, Intellectual Property Association of Bangladesh (IPAB) and Council Member of ICSB.
12 | January-March 2019
Mohammad Asad Ullah FCS, Chairman, Professional Development Sub Committee and Immediate Past President of ICSB presided over the seminar. He said specific SDG indicators should be in line with the country context and the country should be innovative and work out own domestic indicators in line with own development challenges to make the SDG efforts a success. "Bangladesh Bureau of Statistics (BBS) should be strengthened to address the data gap in order to properly implement the SDGs," he commented. Md. Shafiul Islam (Mohiuddin), President, FBCCI, Golam Mainuddin, Vice President, MCCI, Shehzad Munim, President, FICCI, Asif Ibrahim, Former President, DCCI, Md. Azizur Rahman FCS, Director General, Intellectual Property Association of Bangladesh (IPAB) participated in an enlightening panel discussion. A lively open discussion session was held in the later part of the CPD programme where the Paper Presenters answered different questions of the participants. The Program was attended by a large number of Members of the Institute who are working in different listed companies of the country, Corporate Leaders and Govt. Officials. Prof. Dr. Feroz Iqbal Faruque, FCS, former Senior Vice President of ICSB offered vote of thanks on behalf of the Institute. QCS Internship Guideline Programme Internship guideline programme of the July-December 2018 Session for the Qualified Chartered Secretaries (QCS) was held on March 07, 2019, 07:30 pm at ICSB Campus, Dhaka.
ICSB President with Interns
Mohammad Sanaullah FCS, President of the Institute, inaugurated the internship guideline programme by congratulating the Qualified Chartered Secretaries (QCS) for their accomplishment and urged them to undergo the internship with sincerity and highest level of dedication. He also highlighted the importance of internship program in their professional life and for future endeavor. Participants raised various queries and sought advice. The President of the Institute replied and provided suggestions accordingly. Safiar Rahman FCS, Senior Vice President of ICSB participated in the discussion and exchanged his valuable experiences. Discussion Meeting with Unsuccessful Students The Examination and Education Committee had a discussion meeting with unsuccessful students of the Level P-I and P-II, Session July-December, 2018 on March 20, 2019 at 6:30 pm at the Conference Room of ICSB. The meeting was chaired by Md. Anwar Hossain Chowdhury FCS, FCA, Chairman, Examination Committee while Md. Selim Reza FCS, Vice President of ICSB and Member of Education Committee, Salim Ahmed FCS, Member of the Examination Committee, Md. Zakir Hossain, Member, Examination Committee and Registrar (Additional Secretary), Registrar of Joint Stock Companies and Firms, GoB and Md. Shamibur Rahman ACS, Secretary in Charge of ICSB were also present. Anwar Hossain Chowdhury FCS, Chairman, Examination Committee welcomed everyone for participating in the discussion session. During the floor discussion participants raised various queries, gave some feedback and sought advice. After the floor discussion, members of Examination and Education Committee motivated and answered different questions of students.
Discussion Meeting with Unsuccessful Students
January-March 2019 | 13
INSTITUTE NEWS
urged the government to include ICSB members in the activities of the SDG's programme for the greater interest of the country.
ICSB Celebrated the 49th National Day of Bangladesh
Independence
and
A team of ICSB Members and Officials paid tributes to the Liberation War Martyrs’ on March 26, 2019, the 49th Independence and National Day of Bangladesh which is marked as a commendable and dignified day in the history of Bangladesh. On behalf of the Institute, Dhaka Regional Chapter Sub Committee organized the programme under the supervision of its Chairman, Syed Moniruzzaman FCS. The day’s programmes were began with the ceremonial hoisting of Bangladesh’s red and green national flag by Md. Selim Reza FCS, Vice President of the Institute at the ICSB premise. Everybody present at the programme sang our national anthem at the time of flag raising. After that Members reached Jatiyo Smriti Soudho (National Martyrs' Memorial) at Savar to pay floral tributes in remembrance of the souls who sacrificed their lives to earn Bangladesh liberation. After paying their tributes, they stood in solemn silence for some time as a mark of profound respect to the memories of the martyrs of the 1971 Liberation War.
Hoisting the National Flag at ICSB Premises
Among others, A.K.M. Mushfiqur Rahman FCS and Salim Ahmed FCS, Council Members and Md. Shamibur Rahman ACS, Secretary in Charge of the Institute were present in the programme.
ICSB Team Starts Journey Towards National Martyr’s Memorial
ICSB Team Paid Tribute with Bouquet of Flowers at Jatiyo Smriti Soudho
ICSB Team in front of Jatiyo Smriti Soudho
14 | January-March 2019
F-0060
Md. Abdus Salam Khan FCS Mr. Md. Abdus Salam Khan FCS a Fellow Member of the Institute working in Bangladesh Submarine Cable Company Limited (BSCCL) as Company Secretary. On January 01, 2019 his salary grade was changed from grade-3 to grade-2.
A-0405
Faruk Mia ACS Mr. Faruk Mia ACS an Associate Member of the Institute joined Jamuna Group of Industries on February 16, 2019 as Deputy General Manager- Taxation. Prior to this, he was Senior Manager (Vat and Tax) of Panna Group.
A-0437
Sk. Md. Sarfaraz Hossain ACS Mr. Sk. Md. Sarfaraz Hossain ACS an Associate Member of the Institute joined People Insurance Company Limited on February 24, 2019 as Company Secretary. Prior to this, he was Asst. Vice President & Company Secretary of First Finance Limited.
A-0455
Sharif Dilnewaz Hossain ACS Mr. Sharif Dilnewaz Hossain ACS an Associate Member of the Institute promoted to JAVP on January 01, 2018 in Shahjalal Islami Bank Limited. Prior to that, he was Senior Executive OfďŹ cer and Internal IT Auditor of the same organization.
January-March 2019 | 15
INSTITUTE NEWS
SUCCESS GREETINGS
SUCCESS GREETINGS A-0489
S.M. Shariful Islam ACS Mr. S.M. Shariful Islam ACS an Associate Member of the Institute promoted to First Assistant Vice President at Financial Administration Division on January 01, 2019 in Shahjalal Islami Bank Limited. Prior to that, he was Junior Assistant Vice President of the same organization.
A-0502
Mohammad Salah Uddin ACS Mr. Mohammad Salah Uddin ACS an Associate Member of the Institute promoted to Vice President and Head of Investment Risk Management, SME and Sustainable Finance on January 01, 2019 in Islamic Finance and Investment Limited. Prior to that, he was First Vice President and Head of IRM of the same organization.
A-0529
Md. Mahbub Mofazzal ACS Mr. Md. Mahbub Mofazzal ACS an Associate Member of the Institute joined EPIC Group on March 31, 2019 as Manager, Finance & Accounts. Prior to this, he was Senior Consultant of AccďŹ ntax.
16 | January-March 2019
The Council of the Institute of Chartered Secretaries of Bangladesh (ICSB) in its meeting held on March 04, 2019 has announced the results of the Chartered Secretary examination January 2019. Roll numbers of the successful candidates are as follows: C.S. Executive Level-I:
Roll No.: 001, 004, 005, 012, 015, 021, 024, 025, 029, 031, 032, 034, 036, 039, 041, 043, 049, 054, 055, 056, 059, 060, 061, 068, 070, 079, 081, 087, 088, 089, 091, 093, 095, 096, 098, 101, 102, 103, 104, 116, 117, 118, 121, 126, 129 and 131. Total – 46 (Forty Six) only C.S. Executive Level- II:
Roll No.: 133, 135, 137, 138, 140, 141, 142, 146, 148, 155, 156, 159, 160, 161, 162, 163, 165, 166, 169, 170, 171, 173, 174, 177, 178, 181, 183, 185 and 187. Total – 29 (Twenty Nine) only C.S. Executive Level-III:
Roll No.: 195, 197, 202, 203, 208, 215, 218, 221, 223, 229, 230, 233, 235, 236, 238, 239, 243, 244, 246, 252, 255 and 258. Total– 22 (Twenty Two) only C.S. Professional Level-I:
Roll No.: 003, 007, 010, 013, 017, 019, 033, 035, 040, 041, 042, 043, 049 and 050. Total – 14 (Fourteen) only.
C.S. Professional Level- II (Qualified Chartered Secretary) Roll Numbers and Name 1
P-056
Mahdi Ibna Bashir
2
P-057
Md. Sazzadul Alam Niazi
3
P-058
Joynul Abedin
4
P-069
Arbinda Shekhar
5
P-071
Faruk Ahmed Patwary
6
P-073
Kazi Md. Miraj Hossain
7
P-074
Golam Jilani
8
P-077
Siran Bin Sarwar
9
P-080
Sanjoy Kumar Chakraborty
10 P-081
Md. Anamul Haq
11 P-091
Imran Ahamed
12 P-095
Md. Kamrul Hasan Noor
13 P-096
Zahid Hasan
14 P-097
Mohammad Rukonul Islam
15 P-099
Sazedul Hoq
January-March 2019 | 17
INSTITUTE NEWS
RESULT OF THE CHARTERED SECRETARY (CS) EXAMINATION JANUARY 2019
C.S. Final Qualified
During the 3rd Quarter of 2019 the Following Students were Qualified as Chartered Secretaries
CS-1810 Mahdi Ibna Bashir
CS-2433 Sazedul Hoq
CS-3006 Golam Jilani
CS-3071 Arbinda Shekhar
CS-3099 Sanjoy Kumar Chakraborty
CS-3310 Faruk Ahmed Patwary
CS-3427 Kazi Md. Miraj Hossain
CS-3513 Md. Kamrul Hasan Noor
CS-3659 Zahid Hasan
CS-3853 Imran Ahamed
CS-3920 Siran Bin Sarwar
CS-3972 Md. Sazzadul Alam Niazi
CS-4012 Mohammad Rukonul Islam
18 | January-March 2019
CS-4048 Joynul Abedin
CS-4054 Md. Anamul Haq
INSTITUTE NEWS
CHRONOLOGY OF CGEA EVENTS
Honorable Chief Guest with the Awardees at the 5th CGE Award 2017
Honorable Chief Guest with the Awardees at the 4th CGE Award 2016
Honorable Chief Guest with the Awardees at the 3rd CGE Award 2015
January-March 2019 | 19
CHRONOLOGY OF CGEA EVENTS
Honorable Chief Guest with the Awardees at the 2nd CGE Award 2014
Honorable Chief Guest with the Awardees at the 1st CGE Award 2013
20 | January-March 2019
Articles
January-March 2019
ICSB Award for 'Excellence in Corporate Governance': A Sustainable Corporate Governance Initiative (SCGI) Prof. Dr. Feroz Iqbal Faruque FCS
P
reamble and Rationale:
Following a large number of corporate collapses around the world, the ensuing profound impact on investors resulted in considerable attention been given to studying corporate governance in developed countries such as the United States, the United Kingdom, Australia, Germany and Japan. However, there is a dearth of studies on corporate governance practice in emerging economies such as Bangladesh. This article attempts to examine the corporate governance practice in Bangladeshi companies in the light of two dominate models of corporate governance- first the Anglo-American Model and second, the German-Japanese Model. This study may healp reduce the dearth of literature on corporate governance in Bangladesh. The study finds that many of the characteristics of the Bangladeshi context align with the German-Japanese model, such as a concentration of shareholdings by the banks and financial institutions or dominant shareholders leading to a high degree of ownership control, a less liquid capital market, weak shareholders rights, a dominant agency conflict between controlling and minority shareholders and a limited capacity for boards of directors. The study also identifies six specific corporate governance characteristics in relation to current corporate government practices in Bangladesh, first a weakly enforced legal and regulatory framework, secondly weak institutional controls, thirdly a lacuna of professionals to develop a sound corporate governance culture, fourthly a predominance of individual investors, fifthly a dearth of foreign and institutional investors, and sixthly limited transparency and weak disclosure practices. Corporate governance constitutes the laws, institutions and mechanisms by which corporations are managed and controlled. It is built on the premise that good corporate governance in any sector serves the efficient and effective allocation of scarce resources. There are many definitions of corporate governance from a broad societal definition to a market specific one. For example, Sir Cadbury proposes a broad understanding of the concept,
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stating “Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society” (Sir Adrian Cadbury, 2000). An alternate and narrower understanding emerging from financial market approaches to defining corporate governance is found in the finance literature. This is typified by the definition of corporate governance given by the Asian Development Bank (ADB), which describes corporate governance as, “(i) a set of rules, that define the relationship between shareholders, managers, creditors, the government and stakeholders, (ii) a set of mechanism that help directly or indirectly. Following the large number of corporate collapses around the world, considerable research on corporate governance is conducted in the developed countries context, such as the United States, the United Kingdom, Australia, Germany and Japan. However corporate governance in emerging economy has not been studied as intensively as in the developed markets (Shleifer and Vishny, 1997; Gibson, 2003; Denis and McConnel, 2005). Similarly, several reactionary structural changes have been instigated to prevent such events happening again in the developed markets context, such as the introduction of the Sarbanes-Oxley Act, 2002 in the United States; however the reaction in the emerging market is almost absent. This study contributes to the ongoing researches on accounting and/or finance literatures and contributes to help reducing the dearth of literatures on corporate governance in emerging economies and Bangladesh. The Existing Corporate Governance Regime in Bangladesh An independent survey in late 2006 with the help of
ARTICLE Securities and Exchange Commission, Bangladesh revealed that about 55 percent of companies do not comply with the good practice guidelines and only about 33 percent companies appointed the independent directors (Jai Jai Din, 2006). State Owned Enterprises (SOEs) suffered from huge accumulated losses because of corruption, mismanagement and a lack of effective monitoring. The World Bank (1995, p 89) stated that the biggest public failure in Bangladesh was due to the SOE sectors in Bangladesh. Recently WB has included Corporate Governance issue of SOEs in the Public Financial Management Program to bring discipline in the SOEs. The first instance of corporate governance disclosure in Bangladesh is Padma Textile, a subsidiary of the BEXIMCO group of companies, who published two pages in their annual report on corporate governance, stating “recognizing the importance of it, the board and other senior management remained committed to high standards of corporate governance”. Thereafter the report contains a series of statements about “internal financial control”, “management structure of the company”, “financial reporting”, etc. (cited in Haque, 2002). However companies in Bangladesh now require to report information on corporate governance in their annual financial reports. The corporate governance practices were only made mandatory for the first time in Bangladesh following the SECB announcement of “Corporate Governance Notification” in 2006 and thereafter updated in 2018. Corporate Legal Environment in Bangladesh The corporate legal framework in Bangladesh consists of certain Acts and Ordinances, numerous subordinate legislative instruments such as orders, notifications, rules, regulations and circulars, which are issued by the Government, the Bangladesh Bank, the Securities and Exchange Commission (SECB), the National Board of Revenue(NBR) and other governmental agencies. Moreover the stock exchanges, chambers of commerce and other self-regulatory agencies in the private sector also form a part of the legal and regulatory framework for corporate governance in Bangladesh. The Securities and Exchange Commission, Bangladesh (SECB) was established on 8th June 1993 under the Securities and Exchange Commission Act, 1993. The SECB holds very wide-ranging powers and regulates the activities of the capital market in Bangladesh including licensing and regulating of capital market participants and intermediaries such as
stock exchanges, brokers and dealers, merchant banks and portfolio managers. Much of the powers of the SECB are aimed at proper disclosure to investors, which is at the heart of good corporate governance. It provides policy direction to the industry and administers the securities legislation and acts as a administrative tribunal for decisions on the capital markets (SECB, 2000-01). Listed companies are required to submit the copy of their Annual Report and the proceedings of their annual general meeting to the SECB. Besides regulating the capital markets, the SECB has the other objectives of promoting investors” awareness including investment guidelines and the correct format for lodging a complaint, caution notices regarding the circulation of fake shares, an investors” education program and the provision of training for intermediaries of the securities market (SECB, 2005). The Bangladeshi capital market is one of the smallest in Asia, and has a lot of problems including a non-developed securities market, investor non-awareness, a lack of research, non-professionalism of the brokerage business and market intermediaries, and a tendency towards unethical gains by insider trading and a lack of transparency (Chowdhury, 2000 and SECB, 2002-03). Dhaka Stock Exchange is a self regulated non-profit organization. Its activities are regulated by its “Articles of Association” and rules and regulations” and “by-laws” along with the Securities and Exchange Ordinance, 1969, Companies Act 1994 and Securities and Exchange Commission Act, 1993.
ICSB Initiative for Excellence Award:
Corporate
Governance
ICSB declared the ever first Corporate Governance Excellence Award for FY 2013 in 2014, while Mr.Mohammad Asadullah the then President of the institute lead the initiative and Mr Mohammad Nurul Alam was entrusted to be the first Chairman of the committee. Since it was the first of it’s kind in Bangladesh as well as in the history of ICSB the noble initiative had to face various kinds of problems and issues, but were ultimately resolved professionally. Though ICSB was founded in 1997 under a license from the ministry of Commerce, but was not under any Act until 2010. After long sweat, beating of huge and unprecedented resistances including ministerial resistances the institute achieved its proper footings and started getting financial supports from the government, professional and social supports. The
January-March 2019 | 23
President and council members of that time and all others took huge unprecedented initiatives to materialize the objectives. Despite of huge financial constraints at that time the visionary leadership of the institute could risk taking such a bold initiative. On the other hand the entire country and its business houses had very little or nil awareness about Corporate Governance Excellence Award and its modus operandi altogether. Thanks Allah the matter got huge responses from the business leaders, government and others. The event was nascent but thriving and was iconic too, which built the foundation for an yearly festival-“Corporate Governance Excellence Award”. Still we cherish the challenges and success of the event and the slogan “Inspire and get inspired”. ICSB initiatives to promote good governance in corporate Bangladesh. ICSB undertook various measures to promote and facilitate good governance in the corporate sector of Bangladesh. ICSB identified the need for integration, harmonization and standardization of diverse secretarial practices, has constituted the Secretarial Standards Board with the objective of formulating Secretarial Standards. Main objectives for Awarding is to Promoting governing excellence” is the main objective of our Institute. Globally, Chartered Secretaries Institute is called the Institute of Governance. ICSB is nurturing the profession of chartered secretary in the field of corporate management, specially emphasizing on the governance and compliance issues. The Institute is a member of Corporate Secretaries’ International Association (CSIA), Geneva, Switzerland, since 17 April, 2012. CSIA is the global voice of Governance. The ICSB National Award for Corporate Governance Excellence confers annually to public listed companies adjudged by a Jury board as a front-runner in adhering to the Corporate Governance norms in reality. Recognizing leadership efforts of corporate board in practicing the CG principles in their functioning and Motivating them for focusing CG practices in their day to day functioning. Corporate Governance & Sustainability Vision Awards of the Indian Chamber of Commerce: Indian Chamber of Commerce is one of the most pro-active Industry association of India today working towards a growth oriented model for all the key driving sectors of the economy. Further emphasis on the need for Sustainability, ICC organizes the India Corporate Governance & Sustainability Vision Summit every year. Sustainability covers a huge gamut of activities both at
24 | January-March 2019
industrial and individual level. In the recent past, we have seen Corporate India (Both Public Sector and Private sector) are working on their Sustainability Mission to ensure growth and prosperity for the long term. The Awards are a part of the continued efforts to create awareness, promote policy & practices and create capacity to mainstream sustainability practices in Indian industry. ICSI Award: The ICSI bestows this award every year to those it considers to be the two best¬ governed companies in India, underlining its commitment to good corporate governance. This is the most prestigious corporate governance award in India. The selection of the winning companies for translating good corporate governance into reality is made by a jury of distinguished practitioners in their respective fields, reflecting the prestigious nature of the award. ICSI processes for the award selection involved a number of rounds of screening, including feedback from Independent Directors of the company on governance practices. The companies are short¬listed on the basis of performance in key areas of corporate governance including: Board independence and governance; Board systems and procedures; Transparency and disclosures compliances; Consistent shareholder value enhancement and value enhancement for other stakeholders; Corporate Social Responsibility; and other good corporate governance initiatives. World Finance Corporate Governance Awards: The World Finance Corporate Governance Awards celebrates the businesses that are not content to maintain the status quo. Instead, they drive positive change by taking a leading role within their industry, setting new standards of excellence with regards to financial disclosure, workplace diversity and environment sustainability. Award Categories: 1. Best Practices in Enterprise Risk Management 2. Best Practices in Sustainability and ESG 3. Best Approach to Achieving Effective Board and Committee Operations 4. Best Practices in Enhancing Boardroom Diversity 5. Best Practices in Strategic Planning, Oversight and Value Creation by the Board 6. Best Engagement by a Governance Team 7. Best Compensation Disclosure and Communication
ARTICLE 8. Best Practices in Subsidiary Governance 9. Best Overall Corporate Governance 10. Governance Professional of the Year 11. Peter Dey Governance Achievement Award (Note: Peter Dey is Considered to be the “Godfather of Canadian governance,” This award recognizes outstanding and ongoing achievement in the realm of corporate governance. This person need not be a GPC member or a corporate secretary; rather, it is someone who has significantly impacted the way companies are governed, are regulated, or how they communicate with investors and the wider community. This award is meant to recognize the outstanding contribution(s) by an individual to corporate governance in Canada.) Conclusion: The weaknesses in corporate governance in Bangladesh identified in the discussion section above require an explanation beyond a market framed analysis as used in the Asian Development Bank definition of corporate governance. Indeed, as the German-Japanese model is identified as going part way to explaining the corporate governance situation of Bangladesh, the Asian Development Bank itself is a complicit player in the situation. It could be argued that a mechanistic approach to corporate governance as described in its definition in the introductory section of this paper facilitates its position of power and influence as a key creditor of corporations in Bangladesh. Rather, the broader definition of Cadbury (2000) is sensitive to the Bangladesh context. Given the limited resources of an emerging economy, Bangladesh must find a balance between economic efficiency and community stewardship inherited in the form of its State Owned
Enterprises. Alignment of stakeholders is difficult given wide gaps in both opportunity and education of investors. A wide share ownership is possible only through egalitarian wealth distribution, which is a characteristic of both models described, but not one of the Bangladesh context. References: Aoki, M. (1995), Controlling Insider Control: Issues of Corporate Governance in Transition Economies, in Aoki, M. and H. Kim (eds), Corporate Governance in Transitional Economies: Insider Control and the Role of Banks, Economic Development Institute of the World Bank, Washington, D. C., 3-29. Arun, T. G.; and J. D. Turner (2004), Corporate Governance of Banks in Developing Economics, Concepts and Issues, Governance: An International Review,
Corporate
12 (3): 371-377, Blackwell Publishing Inc. Asian Development Bank, ADB (2000), Corporate Governance and Finance in East Asia, A Study of Indonesia, Republic of Korea, Malaysia, Philippines and Thailand, A Consolidated Report, Volume Development Bank, Manila.
1,
The
Asian
» About the Author Fellow Member & Former Senior Vice President of the Institute
January-March 2019 | 25
Why The CEO-Chair Split Matters? Bipul Kumar Bhowmik FCS
I
NTRODUCTION
In many companies, the chief executive officer (CEO), who holds the top management position in the company, also serves as chairman of the board. But it seems that every year calls ring out louder and louder for boards to separate the roles of CEO and chairman. Good number of companies faced shareholders proposals demanding replacement of their CEO with an independent director in the role of chairman. Advocates of splitting the positions argue that an independent leader will aid the board in more effectively monitoring the CEO’s actions and performance. Critics of the combined CEO/chairman role include institutional investors, policymakers, and a preponderance of corporate governance experts and advisory firms. Many executives disagree, however, arguing that such a structure creates unnecessary confusion and hurts unity of leadership. Question is Who’s right? Let’s look at the role and responsibilities of both. ROLES AND RESPONSIBILITIES OF CEO AND CHAIRMAN The respective roles of the Chairman and the CEO will depend on various factors such as the manner in which the Board functions as a group and the relationship between the Board and Management. This is a crucial partnership as it dictates the long-term success of the Company. Each role has functions, which should be clearly defined and understood. The Chairman plays a crucial leadership and pivotal role in ensuring that the Board works effectively. The key roles of the Chairman are:•
Ensuring that there is comprising executive, independent directors;
26 | January-March 2019
a balanced board, non-executive and
•
Ensuring full participation of the executive, non-executive and independent directors in the Board’s decision making processes and activities;
•
Facilitating the effective contribution of non-executive and independent directors and building a strong bond and trust between them and the executive directors;
•
Ensuring that the whole Board plays a full and constructive role in developing and determining the company’s and/or Group’s strategy and overall business and commercial objectives;
•
Ensuring that all relevant, material information are available to the Board for Board meetings;
•
Effectively leading the Board as a whole and in particular during Board meetings and general meetings;
•
Setting the agenda to be tabled for discussion, in consultation with the CEO and the Company Secretary, taking into consideration the important issues facing the company and/or Group with emphasis to strategic, rather than routine issues;
•
Ensuring that there are sufficient channels for effective communication between the Board and the shareholders at general meetings.
•
Ensuring that complete and clear information on the company and/or Group affairs are provided to the Board on time.
•
Ensuring that the advice of the Company Secretary on compliance issues, procedures and rules are considered and acted accordingly.
•
Ensuring effective communication between the company and/or Group and its shareholders, executive management, committees and other stakeholders.
The position of CEO is equivalent to the more commonly known term of a Managing Director for
ARTICLE smaller companies. Broadly, the CEO is responsible to the Board for the day-to-day management of the Company. The Board gives direction and exercises judgment in setting the Company’s objectives and overseeing their implementation. The key roles of the CEO are:•
Ensuring that the Company and/or Group’s business is properly and efficiently managed by the executive team and implements the policies and strategies adopted by the Board and it’s Committees;
•
Assisting the Chairman in drawing up the agenda for Board meetings by providing input in relation to important strategic issues facing the business;
•
Highlighting and updating the Chairman on complex and sensitive issues that might affect the company and/or Group, and maintaining dialogue with the Chairman of the Board;
•
Consulting with the Chairman and the Company Secretary on board-approved procedures and matters are reserved for the board’s decision;
•
Ensuring that the operational planning and control systems are in place;
•
Ensuring that objectives and standards of performance are understood by management and employees;
•
Monitoring the performance results against plans;
•
Taking remedial action, where necessary;
•
Leading the management team and employees; and
•
Managing the company generally.
The issue of whether holding both roles by a single head reduces the effectiveness of the board, is a hot topic and often rears its head at shareholder meetings. Considering the roles and responsibilities as stated above, there are good reasons to separate the two positions in order to strengthen the overall integrity of the company. Be emphasized on the following aspects in the context of Chairman and/or CEO matters: Executive Compensation: One of the events that get the most attention from a company's shareholders is an increase in executive pay. Increases come at the expense of shareholder profits, although most understand that competitive pay helps to keep talent in the business. However, it is the board of directors that votes to increase executive pay. When the CEO is also the chairman, a conflict of interest arises, as the CEO
is voting on his or her own compensation. Although a board is required by legislation to have some members who are independent of management, the chair can influence the activities of the board, which allows for abuse of the chair position. Corporate Governance: One of the board's main roles is to monitor the operations of the company and to ensure that it is being run in conjunction with the mandate of the company and the will of the shareholders. As the CEO is the management position responsible for driving those operations, having a combined role results in monitoring oneself, once again opening the door for abuse of the position. A board led by an independent chair is more likely to identify and monitor areas of the company that are drifting from its mandate and to put into place corrective measures to get it back on track. Audit Committee Independence: In August 2012, the BSEC set out stronger regulations – The Corporate Governance Guidelines - for corporate oversight, including a requirement that the audit committee consist of only external board members. This means that no member of management can sit on the audit committee. However, because the committee is a sub-group of the board of directors and reports to the chair, having the CEO in the chair role limits the effectiveness of the committee. The independence of the Audit Committee is especially true for the whistleblower provision. The BSEC’s Guidelines spirit also requires that the audit committee puts in place a procedure where employees and other connected individuals can report fraud and other abuse directly to the committee without reprisal. When the board is led by management, employees may be less likely to report such activities and the audit committee may be less likely to act on such reports. THE BSEC CORPORATE GOVERNANCE CODE ON THE PROVISION OF DUAL ROLES The combined roles of Chairman and Chief Executive Officer (CEO) constitute a concentration of power that may give rise to conflicts. However, all public limited companies in Bangladesh are required to have a board of directors that is tasked with the oversight of corporate activities and protects the interests of the company's shareholders. The board is headed by a chairman, who has influence over the direction of the board. As a matter of good governance, it is a best practice that the roles of the Chairman and the CEO should be separated. The BSEC Guidelines on Corporate Governance also advocates that the
January-March 2019 | 27
positions of Chairman and CEO shall be separated with clearly accepted divisions of responsibilities, so far to ensure a balance of power and authority, such that no one individual has unfettered powers of decision. SECTION 353 OF THE COMPANIES BILL 2013 (DRAFT) –NEEDS TO BE AMENDED Though the new Companies Bill 2013 (Draft) is yet to be finalized, the advocacy of the BSEC on dual roles by way of the Guidelines is not taken into consideration. Gap between two statues in this respect will lead to non-compliance mentality. Let’s see what stand the new Companies Bill - 2013 has already been taken on these dual roles. Provision of section 353: Appointment of key managerial personnel of the said Bill depicted that Section 353: Appointment of key managerial personnel (1) Every company belonging to such class or classes of companies as may be prescribed shall have the following whole-time key managerial personnel,(i) Managing director, or Chief Executive Officer or manager and in their absence, a whole-time director; and (ii)
Company secretary:
Provided that unless the articles of such a company provide otherwise, an individual shall not be the chairperson of the company as well as the managing director or Chief Executive Officer of the company at the same time. In the context of the above proviso, I would like to give emphasis on the words – ‘Provided that unless the articles of such a company provide otherwise’, where discretionary authority has given to the Company who can choose it’s like to do or not to do. Where CEO-Chair split off is a matter, the above proviso shall be amended in the following manner: Section 353: Appointment of key managerial personnel (1) Every company belonging to such class or classes of companies as may be prescribed shall have the following whole-time key managerial personnel,-
28 | January-March 2019
(i) Managing director, or Chief Executive Officer or manager and in their absence, a whole-time director; (ii)
Company secretary and
(iii)
The Chief Financial Officer
Provided that notwithstanding anything contained in the articles of association of a company, an individual shall not be the chairperson of the company as well as the managing director or Chief Executive Officer of the company at the same time. In light of basic instinct, it is also suggested that CFO and Company Secretary positions shall also be separated by different individuals at the same time. It is notable that the Bill, for the first time, proposes to re-group in relation to a company “key managerialpersonnel” consisting of (i) the Chief Executive Officer or the managing director or the manager; (ii) the company secretary; (iii) the Chief Financial Officer if the Board of Directors appoints him; and (iv) such other officer as may be prescribed. However, Head of Internal Audit shall necessarily be included in the said group. The above re-group means that the Key Managerial Personnel will become liable for penal consequences by virtue of the positions they hold. About 24 clauses in the Bill (excluding winding up provisions) recognize “Officer who in Default” and this term includes Key Managerial Personnel for imposition of monetary penalties for non-compliance of law. The relationship between a company's management and board of directors continues to be an important topic for both shareholders and regulators. Any future corporate failures linked to this lack of segregation of duties will heighten the conversation and may lead to even stricter legislation in the future.
» About the Author Fellow Member of the Institute
ARTICLE
First ICSB Corporate Governance Excellence Award- How the Milestone was Created Mohammad Nurul Alam FCS
B
ackground
The professional body-Institute of Chartered Secretaries of Bangladesh (ICSB) has been recognized by an act. of the parliament in 2010. The Institute’s activities are being governed by the chartered secretary act 2010 and rules 2012. Basically this Institute was founded in 1997 in the name of Institute of Chartered Secretaries and Managers of Bangladesh (ICSMB) by thirteen respectable professional heroes of the country. The members and the students of ICSB will continue to remember these thirteen gentlemen with honour and due respectable. The Institute’s affairs are run by an elected council from the beginning. Formation of council has been changed from the date of gazette notification of the enactment of chartered secretary act in 2010 as a requirement of the respective act. The term of the council is three years. Thirteen members of the ICSB elected through general election of the members of ICSB and five senior government officials nominated by the government from the ministries of finance, commerce, law and parliamentary affairs, RJSC and Commissioner of BSEC and these eighteen members altogether form the council. The elected members in the council again elect the President, one Senior Vice President, one Vice President and one Treasurer. Besides the Executive Committee the council forms necessary number of standing and sub committees including corporate governance excellence sub-committee to assist them. Corporate Governance Award Sub-Committee (CG SC) In 2013 for the first time the council formed the standing and sub-committees and assigned the responsibilities of Chairmanship of the corporate governance sub-committee to me. In the first meeting of the CG sub-committee we discussed the scope of work (SoW) of the CG Sub Committee and requirement of a Terms of Reference (ToR). There were no previous reference and records as this was the first of its kind in the history of ICSB.
We identified the SoW of this Sub Committee was to recognize the publicly listed companies with best corporate governance practice. This was a huge tasks and required to draw a big budget to finance the program, therefore the sub-committee members was afraid to proceed further. I had chalked out what to do, how to do, what were the challenges, what could be potential dangers to the profession if failed to stage the event! I spoke to the then President Mr. Mohammad Asadullah, FCS in detail regarding my plan to hold the great event of the ever 1st Corporate Governance Excellence Award 2013 which was held in 2014. The discussion held with the President in detail on the plan and pros and cons. I received his consent and all assistances that he will stand beside and in the fore-front of the Corporate Governance Sub-Committee and extend full support for successfully holding the 1st CGEA. In the next meeting of the CG SC I placed the plan with detail of task list, finance requirement and opportunities of the Chartered Secretary profession in terms of reputation and professionalism. The members of the CG SC became excited but still was csared regarding financing! the whole program. However, we could resolve to hold the ever 1st CGEA ceremony very successfully on 4 December 2014. Council Approval We have drafted charter of selection criteria, process to select through scoring on the basis of published annual report of the publicly listed companies. Obtained the approval of the council to hold the 1st CGEA in a befitting manner. Charter of CGEA criteria The charter of CGEA criteria was revised several times to include the feedback received from the senior professionals and uploaded in the ICSB website. The ICSB council elevated the Corporate Governance Sub-Committee to Standing Committee status from the year 2015 after accomplishing the 1st CGEA Ceremony.
January-March 2019 | 29
Jury Board and Technical Committees After having consultation with the then President Mr. Mohammad Asadullah, FCS a Trustee Board was formed and obtained approval from the then council. The Trustee Board included dignified personalities of the country -Mr. Mirza M Azizul Islam, Dr. Hossain Zillur Rahman, Mr. Faruq Ahmed Siddiqui, Mr. Sohel Ahmed Chowdhury and Mr. Feroz Ahmed and Secretary to the Trustee Board Mr. M Nurul Alam, FCS. We formed four Technical Committees, three members in each Technical Committee of high competence in their professional life. Crest sub-committee and fund raising committee, which extended supports to the CG SC. Award There were three awards in each category of awardgold, silver and bronze. Companies were ranked in each category having higher score based on their published annual report and information in the website; assessed by all three members of each Technical Committee and averaging the three assessors individual score. Each TC prepare tabulation sheet from the score cards and on the basis of higher score top three companies woin the gold, silver and bronze awards respectively. The TCs handed over sealed envelopes of tabulation sheet with score sheets to the Secretary of the Jury Board. Chairman, CG SC and Secretary to the Jury Board placed the result to the Jury Board for review and approval. In the 1st CGEA fifteen companies in five categories won the Corporate Governance Excellence Awards. Souvenir and CGEA bulletin Prof. Dr. Feroz Iqbal Faruque was the Souvenir and CGEA bulleting sub-committee editor. Dr Feroz was the architecture of the first ever Corporate Governance Excellence Award slogan “Inspire and Get Inspired”. Souvenir and CGEA bulletin were published in the CGEA giving ceremony. Organizing Committee Headed by the then Council President Mr. Mohammad Asadullah, FCS and other committees worked hard to successfully holding the CGEA giving ceremony. Though it was the first of its kind of event in the history of ICSMB, we received expected numbers of sponsorships and advertisements partners and a tremendous amount of responses from various professionals, business leaders and government agencies.
their best for the big event for which it was possible to successfully complete the 1st CGEA Ceremony efficiently, transparently and creating milestone to follow only for engagement of all the then President, Council, members, students and stakeholders. Participation The 1st CGEA giving ceremony was held in December 2014 with the presence of around six hundred business leaders/entrepreneurs and members of ICSB. The ceremony was a mega and top class event with attendance of top government officials, dignitaries, corporate leaders and entrepreneurs. Challenges From the ICSB perspective it was an ambitious and a big budgetary event. Funding of such big budget for the first time was a big challenge. Screening of participating companies’ published annual reports was also a sensitive task. As it was first event of its nature setting criteria of scoring was tough and huge brain storming exercise. We had to organize several training sessions for the members of the technical committees. Maintain smooth collaboration among all committees including Jury Board was an important task, which I had to manage. Budgetary management and its compliance by the other committees was also crucial task, which we did successfully. Overall we did all related tasks to successfully stage the 1st CGEA in compliance of ICSB council’s guidelines and with full satisfaction of the council, members and students. What happened after 1st CGEA Ceremony The number of applications for enrolment as student in ICSB 1st level and foundation level increased tremendously in the immediately next session after the completion of 1st CGEA held at the end of the year 2014. ICSB earned more than two million BDT from the 1st CGEA event from advertisements and event sponsorships. Image of the ICSB professionuplifted in the corporate sector. Conclusion The 1st CGEA was an innovation that never happened previously. It was the biggest event of ICSB in terms of image, professionalism, financial value, engagement of members and stakeholders, exposure and media coverage that created milestone unbeaten till today.
Engagement
» About the Author
We could engage all members of the ICSB in the 1st CGEA as the members were excited and supportive at
Fellow Member & Former Council Member of the Institute
30 | January-March 2019
ARTICLE
National Corporate Governance Excellence (CGE) Award: An Incentive for Sustainable Corporate Governance in Bangladesh Mohammad Shahajahan FCS
I
ntroduction
Different stakeholders in corporate structure have different preferences and goal incongruence. The necessity of Corporate Governance (CG) arises from the potential conflicts of interest among stakeholders in the corporate structure. A well governed institution is expected to use its resources optimally and, thus, perform more efficiently and contribute positively to the economic development of a country. Due to global financial crisis, international corporate scandals like Enron,WorldCom etc. corporate governance have gained considerable attention. Many countries of the world are introducing corporate/ company secretary position, either in laws or through regulations, standards or code of corporate governance. The reason is that company secretary is the person who is identifying ‘What’ governance need and advising ‘Why’ certain corporate governance best practices should be adopted by the organization.Institute of Chartered Secretaries of Bangladesh (ICSB), a premier national professional body established by an Act of Parliament i.e. Chartered Secretaries Act 2010, is the only recognized professional body in Bangladesh to develop, promote and regulate the profession of Chartered / Company Secretaries in Bangladesh. Like global governance institute, ICSB is also continuing its pursuit to recognize and reward the best governed companies in Bangladesh through ICSB National Awards for Corporate Governance Excellence (CGE) since 2013. This study aims to examine whether the ICSB CGE Award has incentive to promote sustainable corporate governance of listed companies in Bangladesh. Why Corporate Governance? Corporate Governance (CG) refers to having the appropriate people, processes and structures to direct and manage the business and affairs of the company to enhance long-term shareholder value, whilst taking into account the interests of other stakeholders. CG is several mechanisms to ensure that companies/ firms run effectively and maximize shareholder and/or
stakeholder value (Aguilera, 2005). CG is very much concerned with the functioning of Board of Directors- its structure, styles, process, their relationships and roles, activities etc., and therefore, it is considered as a crucial part of the CG (Jan &Sangmi, 2016). Sound corporate governance is dependent on external marketplace commitment and legislation, along with a healthy board culture which safeguards policies and processes. A well governed institution is expected to use its resources optimally and, thus, perform more efficiently and contribute positively to the economic development of a country. The collapse of global corporate giants has taught us that no single organization is immune to fraud and mismanagement and hence, the running of institutions should not be left to chance but they should be well governed and the necessary checks and balances should be put in place to ensure perpetuity and sustainability of the organization. Therefore, developing and implementing the processes to promote corporate governance was felt few decades ago. Worldwide Some Incentive to Promote Sustainable Corporate Governance: In 2018, our neighbouring country India, Institute of Chartered Secretaries of India unfolded the ‘18th ICSI National Awards for Excellence in Corporate Governance’ to foster and reward Indian companies for promoting Corporate Governance. They awarded two best governed companies and certificates of recognition to five other companies for adoption of exemplary corporate governance practices. Each year, in UK, the ICSA awards (most prestigious award in governance) recognise and celebrate excellence in governance and achievements of companies, teams and individuals from across the governance profession. The 2018 ICSA Awards ceremony was held with about 700 company secretaries and governance professionals to celebrate the achievements of their peers. In the ceremony 19 companies were awarded for their achievement in governance.
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The Centre for Corporate Governance and Financial Policy (CCGFP) and the Chamber of Hong Kong Listed Companies (CHKLC) jointly instituted and organised the first Hong Kong Corporate Governance Awards in 2007. The awards have been conferred annually to encourage improvement in corporate governance of listed companies in Hong Kong through providing recognition and prestige for listed companies in achieving outstanding commitment to shareholder rights, compliance, integrity, fairness, responsibility, accountability, transparency, board independence and leadership, and corporate social responsibility. They, firstly, use self-assessment of each company, then expert review group critically assesses the corporate governance and/ sustainability performance of each entrant of Corporate Governance Excellence Awards and final short-listed companies make verbal presentation to Award Judging Panel (AJP) comprises distinguished personalities in securities and investment markets and the area of corporate governance.
Governance Excellence competition by submitting their current Annual Report. Invitation is made through advertisements in the leading daily newspapers and letters requesting all listed companies in Bangladesh. Award Winners are being judged through a comprehensive process by a 5 members eminent Jury Board comprising of distinguished dignitaries of the country. A Charter for Corporate Governance Excellence Award was approved by the Council of the Institute and it was duly approved by the Jury Board. Technical Committees are being formed comprising of expert members of the Institute for evaluation of the Annual Reports and other relevant information/ documents of the participating companies. The participant companies are being grouped in different industry categories and assigning the evaluation tasks among the technical committees but adequate care is being taken to avoid any conflict of interest. There are three awards in each category of companies ranking into first (Gold), Second (Silver) and Third (Bronze) in order of merit (points scored in the evaluation).
Governance Professionals of Canada (GPC), in 2018, handed out the sixth Annual Excellence in Governance Awards (EGAs) for : i) Best Practices in Enterprise Risk Management, ii) Best Practices in Sustainability and ESG Governance, iii) Best Approach to Achieving effective Board and Committee Operations, iv) Best Practices to enhance Boardroom Diversity, v) Best Practices in Strategic Planning, Oversight and Value Creation by the Board, vi) Best Engagement by a Government Team, vii) Best Compensation Disclosure And Communication, viii) Best Practices in Subsidiary Governance, ix) Best Overall Corporate Governance, x) Governance Professional of the year, and xi) Peter Dey Governance Achievement Award.
For evaluation of the companies a same set of questionnaires approved by the Jury Board is used by the technical committees. The set of questionnaires is focused on the following assessment criteria:
Bangladesh Perspective: ICSB has introduced Corporate Governance Excellence Award in Bangladesh since 2013. This award is a recognition by the ICSB to those companies who have successfully established corporate governance structure in their respective organizations. The main aim of ICSB Corporate Governance Award is to foster and reward Bangladeshi companies/ corporation imbibing and promoting a culture of good corporate governance by not only inculcating good Corporate Governance principles in their functioning their operations but also implementing innovative practices, programmes and projects promoting the cause of Corporate Governance. The companies are invited by the institute to participate in the ICSB National Award for Corporate
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a) Board Independence and Governance b) Board System and Procedures c) Board Committees &Risk Analysis d) Transparency & Disclosures Compliances e) Internal Control and Internal Audit f)
Shareholders Information & Value Enhancement
g) Stakeholders Value Enhancement h) Corporate Social Responsibility i)
Corporate Objectives, Governance Initiatives and Recognitions
j)
Timeliness in issuing Financial Statements and holding of AGM
ICSB CGE Award to inspire Corporate Good Governance of the Companies in Bangladesh Like other countries of the world, in Bangladesh, ICSB has been working with the noble mission for recognition of the listed companies for their significant contribution to sustainable corporate good governance. The awardees of ‘ICSB National Award for Corporate Governance Excellence’ are selected through a rigorous, unbiased and comprehensive evaluation process undertaken by an ‘Independent Jury Board’. So contestant companies have equal
ARTICLE incentive to be selected as winner if the companies have employed their effort for compliance of corporate governance code, companies act and other relevant legislature to ensure corporate good governance within their organizations. Winners of ICSB CGE Award have opportunity to be certified as best in Corporate Governance Excellence. It ultimately enhanced the companies’ goodwill in the market which inspires them to be best compliant with the Corporate Governance Code, Companies Act and other relevant laws so that they can be competitive for ICSB CGE Award in the following years. Similarly, the competitor companies try to improve their corporate governance to be the winner of ICSB CGE Award. Therefore, ICSB CGE Award has leverage to raise a competitive environment among the listed companies in Bangladesh to improve their corporate governance by following the CG Code, companies act and other relevant regulations. To receive the crest and certificate from Finance Minister or similar dignitaries is prestigious. It gives recognitions and wide circulations of the ICSB CGE Award winning companies in different print, electronic and online media within the country and abroad. These inspired the listed companies to be more compliant with Corporate Governance principles in present and also in future years. Finally, ICSB CGE Award reminds the governance principle ‘governance makes business process linear which minimises cost and maximises the turnover and return’. Therefore, listed companies attended in the ICSB CGE Award competition are become aware to operate business following the systems, due process and comply with rules, regulations and corporate governance code to ensure sustainable governance within the organizations. The 5th ICSB National Award 2017 for Corporate Governance Excellence (CGE): The latest 5th ICSB National Award 2017 for Corporate Governance Excellence was held on 10 November,
2018. ICSB got tremendous responses from almost all the segment of the listed companies of the stock exchanges in Bangladesh. In eleven categories, total twenty companies were awarded at the grand ceremony in the presence of dignitaries, business leaders and specialists in this field. Mr Abul Mal A. Muhit, Finance Minister, the Government Peoples Republic of Bangladesh graced the occasion as the chief guest and presented crests and certificates to winning companies in 11 categories. A souvenir on the occasion of the 5th ICSB National Award 2017 for Corporate Governance Excellence was published with brief background and success stories of the respective winning companies along with the list of participants. Conclusion Throughout the world, different governance organizations are taking initiative to promote corporate governance excellence by adopting different means of actions. In Bangladesh, ICSB is continuing its pursuit to recognize and reward the best governed companies in Bangladesh through ICSB National Awards for Corporate Governance Excellence since 2013. The awardees of ‘ICSB National Award for Corporate Governance Excellence’ are selected through a rigorous, unbiased and comprehensive evaluation process undertaken by an ‘Independent Jury Board’ which inspires the listed company with equal incentive to be the best governed company in the respective industry. This award also has opportunity to create value for the entrant companies, to enhance goodwill and prestige of their business and to be innovative in business process and social responsibility which ultimately helps the sustainable corporate governance in Bangladesh. Therefore, ICSB should continue this endeavour to hold the National Corporate Governance Excellence Award every year for the country’s sustainable corporate governance in the corporate arena.
» About the Author Fellow Member of the Institute
January-March 2019 | 33
Corporate Governance Recognition: An encouraging tool for Sustainable Business Development Md. Shiful Islam ACS
P
robably the very simple and long lasting comment on the importance of reward and recognition is ‘‘Success is best when it's shared’’ by Howard Schultz, an American businessman and the former Chairman and CEO of Starbucks. Recognition surely has long lasting effect on one’s journey. Former CEO of IKEA, Anders Dahlvig, has argued that recognition is the greatest motivator of all. In his book, “The IKEA Edge” Dahlvig says that “I would even go so far as to say that recognition is the most important driver of mankind…” Citing the importance of recognition, Dahlvig also said that there are plenty of people who go about their day-to-day jobs and don’t expect to receive any kind of special recognition for showing up and punching the clock every day. To them a job is just a job. But every company has at least a handful of employees who don’t just punch the clock—they show up a little early, stay a little late, pitch in on projects they don’t have to help with, and lend a hand whenever it’s needed. These are the employees that deserve some special recognition! Same way the organization that becomes market leader in any aspect or try to do excellence, it should be appreciated and recognized on their excellence and only then the mass level hard try to do better will be ensured. Recognition and reward to a large extent binds companies to run its business with efficiency and effectively and at the same time help to ensure compliance with the relevant rules and regulations as applicable. Though it is a recognition to the employer, it indirectly generate motivation to company’s’ employees as well. Because employers who are recognized by the national authority and or professional bodies or by any authority workers working there in will also become appreciated. And we know very well that how much important the employee recognition on the other end. Appreciation and recognition are the two very important and major factors of employee motivation to keep striving towards their goals at work. In the arena of national level recognition, the Institute of
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Chartered Secretaries of Bangladesh (ICSB) played role as mile stone through initiating of Corporate Governance Excellence Award in Bangladesh. ICSB is a national organization working with the status of statutory organization under the Chartered Secretaries Act 2010. Institute of Chartered Secretaries of Bangladesh (ICSB) awards the companies in different categories every year which have been started from the year 2013. Chartered Secretaries institute is globally known as the institute of governance. ICSB is nurturing the profession of chartered secretaries in the field of corporate management with the emphasis on the governance and compliance issues. The objective of the Corporate Governance Excellence (CGE) Award as organized by ICSB is to encourage and promote governing excellence in the corporate sector of Bangladesh, to facilitate corporate houses to be competitive in the global arena and earn a sharp edge over others, to motivate organizations and their leaders to make future improvements in governance excellence, to recognize corporate leadership quality and to implement corporate governance norms in true sense and spirit. ICSB through its corporate governance excellence award plays a varied contributory role for development of corporate sector as well as the development of the Country. Every year such a big gathering of country’s business leaders focusing on the event paves a common platform to discuss and comprehend each another. The CGE award of ICSB attracts positive impacts on the corporate sectors in the following ways: •
Promote good corporate governance
•
Promote corporate body to comply with the related rules and regulations
•
Promote a healthy competition, which is to some extent motivation to the companies
•
Promote a common standard/procedure business operation among companies
of
ARTICLE •
Inspiring companies to ensure proper utilization of resources under ethics and legality
•
Inspire companies to protect the interest of all stakeholders.
It also has positive impacts on the national economy in the following ways: •
A good governed business environment claims to be attracted to the foreign investors as well
•
Contribution to better management of employment and country’s GDP
•
Help formulate relevant acts and regulations
•
Good governed corporate sectors ultimately contribute to an effective economy of the country.
•
Promote overall economic development with sustainability
•
Promote companies to exercise corporate social responsibility
ICSB’s CGE award along with other different awards as given by different government, professional and other non-government organizations are playing a significant collaborative role to the development of the country. All of these initiatives definitely ensure proper improvement and development towards the attainment of middle income country status. Here the government of Bangladesh obviously should be thanked for giving the recognition and continuous and timely supports as extended to different professional bodies of the country to explore and innovate business. Arrangement of CGE award program by ICSB and its other development activities are also set to extend collaborative role to the country particularly achieving
the Sustainable Development Goals (SDGs), the visionary movement of the world. Role of ICSB in many ways help and support to achieve targets of different goals of SDG particularly the Goal no 8: Decent Work and Economic Growth; Goal no 9: Industry, Innovation and Infrastructure; Goal no 12: Responsible production and consumption; Goal no 13: Climate change; Goal no 16: Peace, Justice and strong institutions and the Goal no 17: Partnership for the goal. But it should be kept in mind that contribution does not go with any goal or some goals exclusively rather directly and indirectly every organization of the country must share the goals and the targets and at their maximum efforts ensure their contribution for a better sustainable world. Therefore, Institute of Chartered Secretaries of Bangladesh should be thanked and all should recognize and appreciate the initiatives of ICSB particularly in the arena of corporate governance and compliance. The government also should come up with a view to enhance the capacity of the institute and should engage them on collaborative and partnership role with the visionary movement of the country. Collaborative role should come up in the area of policy making, strategy formulation, strategy implementation, resource development, creating comfortable atmosphere for business and investment and finally the achievement of sustainable development goal. Source: a. http://www.icsb.edu.bd b. http://www.un.org c. http://www.worldbank.org
» About the Author Associate Member of the Institute
January-March 2019 | 35
Corporate Governance Excellence towards achieving a balanced & sustainable growth through implementation of SDGs: world’s best practice & learning for Bangladesh Mir Shariful Bashar ACS
A
s Bangladesh makes significant excellence in reducing poverty, achieving economic stability, and advancing the quality of people’s lives, corporate governance is gaining it’s recognition as a key force in driving the sustainable growth of the country. For a third world country like Bangladesh which is about to cross the development milestones to be graduated as a developing country, Corporate Governance can be taken as a instrument for desired changes in terms of achieving SDG, for higher & sustainable sustained economic growth, for a more efficient use of resources, for a vibrant private sector that is accountable & transparent to the investors - regulators and the society, for a reduce in corruption, and for a healthy inflow of funds from domestic and foreign investors. Starting the from the quotation of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman: “Let us together create a world that can eradicate poverty, hunger, war & human sufferings and achieve global peace and security for the well-being of humanity” at The United Nations General Assembly (UNGA) on September 1974: we can find there a seed of development thoughts for the world. Later on Honorable Prime Minister of the Peoples Republic of Bangladesh - Sheikh Hasina carried on the relay-race in favor of the genetics of that kernel by upholding her sheer confidence while signing the Global Agenda for the Country and expressing her bold expectation to the world community that Bangladesh could show its capacity in achieving SDGs - the way it achieved the MDG goals earlier. Under her dynamic leadership Bangladesh is preparing to organize it’s all strength to execute the master plans and tackle all the challenges ahead to achieve SDGs on time. A number of plans & visions are there to lead us through the development journey, to name a few: Vision 2021 (become a middle income Country), SDG 2030 (to reach at the Developed Junction), Milestone 2041 (to become a Prosperous Nation grown as a developed Country), Vision 2071 (achieve a lot to celebrate the 100 years of Independence), Delta plan for Yr 2100 (to attain a resilient Delta) etc. The insight of the idea ‘Excellence in Corporate Governance’ can be recognized as a Sustainable
36 | January-March 2019
Governance Initiative (SGI) of the Current Government of Bangladesh to be instrumental to promote a balanced development in the country. The Sustainable Development Goals (SDGs), otherwise known as the Global Goals, are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. These 17 Goals build on the successes of the Millennium Development Goals, while including new areas such as climate change, economic inequality, innovation, sustainable consumption, peace and justice, among other priorities. The goals are interconnected – often the key to success on one will involve tackling issues more commonly associated with another. At this moment strategically we need to identify & devise some key initiatives to be marked as Sustainable Governance Initiative (SGI). By now Corporate Sector has got the spotlight on its surface; the corporate players have a major role to play in transforming the economy interms of the achieving desired economic growth, generating employment, forming easy source of finance, bringing technology up-gradation and breeding innovation. In line with that the initiatives taken by Institute of Chartered Secretaries of Bangladesh (ICSB) like: ‘Corporate Governance Excellence Award’ should be appreciated nationally - moreover can officially be marked and supported as a Sustainable Governance Initiative (SGI). Now the key challenge ahead is with: HOW?? - Private Sector can engage itself with the SDG framework / SGIs thoughts, whilst contributing to the society envisaged by the 2030 Agenda for SDGs. Globally Governments must to have an interactive mechanism to work with Corporate Sector entities in up-to-the-age and innovative ways to promote responsible private investment, transparency, Public accountability, efficiency, social wellbeing and coordinated actions through CSR & Philanthropic activities. Here “Profit VS Benefit” is a controversy to be discussed widely: to my understanding ‘benefit’ isn't a profit merely - it’s quite more than profit which brings advantage to whole the society. Even in negative profit scenario there may occur huge social benefiting examples, like: social aforestation movement among the employee at their beloved workplace & homestead with aid from a
ARTICLE company's CSR fund may generate huge public benefits as well as mental peace for the employees. Other challenges to be considered with regards to Corporate Sector are: o
Resource & Fund Mobilization for Sustainable development activities.
o
Skill development for the Private Sector & quality education to produce good employee / workers pool [associated with Goal: #04].
o
Sensitize the corporate apprehend SDG issues.
sector
players
to
To account the Contribution of Corporate Governance Excellence Award Program of ICSB in line with the government agenda amid an aim to promote Sustainable Governance Initiatives - the corporate sector leaders may consider some areas for development, as follows:
in a company’s premise & in surrounding society , also to ensure water & land efficiency [associated with Goal: #06]. o
Promote inclusive and sustainable economic growth led by private sector, full and productive employment and decent work environment for all. [associated with Goal: #08]
o
Encourage & avail wider access to innovation for corporate practices. [associated with Goal: #09]
o
Ensure sustainable consumption and production as well as reuse, disposal, recycle & residue handling patterns in Private Sector. [associated with Goal: #12]
o
Encourage Environmentally responsible behavior and Environment friendly Practice in the Corporate Sector [associated with Goal: #13]
o
Use ICT as a tool for development in corporate practices.
o
Identify & face the National challenges in achieving SDGs.
o
o
Contextualization of the goals (SDG) & indicators with the Corporate Sector’s Practices.
Reorganize the good Practices in Corporate Sector in line with the SDG theme.
o
o
Promote Good governance in Corporate Sector.
Creature opportunities for scaling-up to achieve full Economies of scale.
o
Right Size & update the relevant Policy & Acts in favor of Corporate Sector and also ensure Policy Coordination.
o
Ensure Effective Management for the Private Sector.
o
Ensure capability of Data handling & Cyber safely. Encourager initiatives for Branding Bangladesh in terms of Reputation, as an Opportunity Hub & confirm market positioning.
o
Localization & Tailoring of SDG according to our own development needs & the desires from the Corporate Sector.
o
o
Promote Investment in Human Development & Create Employment [associated with Goal: #01 & 02].
Core Private Sector Engagement approach needs to cover the following integrated proceedings with guidance from the sector’s leadership:
o
Sensitize the corporate Sector for Inclusive Growth.
o
o
Improve accountability, Transparency & credibility of public & corporate institutions.
Re-invigorates the contribution of the Corporate Sector.
o
o
Create effective Global Partnership & International development cooperation, and build corporate alliances for attaining SDG.
Attract Corporate Sector incentive/disincentive mechanism.
o
Engaging Private Sector through enforcing law.
o
Connect Corporate Sector with government initiatives through Public-Private Partnership (PPP) approach [associated with Goal: #09 &17].
o
Engaging Corporate Sector through CSR & Philanthropic Practices.
o
Acquire Knowledge & share experience for development.
o
Promote Corporate Health Insurance Policies & Invest in Public Health facilities [associated with Goal: #03]
o
Attain gender equality and empower all women involved in Corporate Sector [associated with Goal: #05]
o
Make an effort to ensure Corporate Commitment to promote safe & clean water with hygienic sanitation
through
After three years of the signing of the SDG, let’s check what has been the progress on the SDG front? In July 2018, 47 countries presented their voluntary national reviews to the High Level Political Forum concerned. Such evaluation reporting shows the enthusiasm among countries and attempts taken at the national level towards SDG implementation. Through all the SGI
January-March 2019 | 37
activities carried out by the signatory Countries – there we could find a good momentum created at the country level, even though progress is not of same rate across countries. For instance: poverty reduction measures are not adequate so far; on top of that the current rate of poverty reduction effect, particularly in Sub-Sahara and South Asia, it seems that the world will not be able to end poverty in all its forms everywhere. Similar outcomes may be experienced in the cases of other goals as well. Private Sector involvement in SDG activities is also not seen that momentous in developing countries. The speed of progress can be accelerated by strengthening collaboration at the national and global levels. Cross-border trade can be a way of receiving assistance for development in terms of benefits such as duty-free quota-free market access and technology transfer opportunity to the Least Developed Countries. Except for the European Union and a good number of developed and developing countries, LDCs are not being able to enter the markets of developed countries at zero or low tariffs. Foreign direct investment is another way to help the LDCs and developing countries in fulfilling their targets with regards to SDGs. On top to creating opportunities for employment and income, FDI into the country particularly in the Corporate Sector can also facilitate transfer of technology, knowledge and experience. It has been observed that in some developing countries it requires serious policy reform to get the benefits out of FDI & Foreign Aids. In view of the above discussion, it can be conclude here by saying that ICSB's initiatives of awarding for Corporate Governance Excellence at National level absolutely serving the interest of the current government’s development agenda & the dream of the father of the nation, but the challenges concerned needed to be taken care properly. The Private Sector also has got a critical development need – which needs to be addressed strategically, afterward question comes about the contribution of Corporate Sector in the development stream. Encouraging corporate good practices about the SDG is indeed a fine idea – therefore, ICSB's Corporate Governance Excellence Award scheme should be appreciated & sponsored by the government as well as the corporate
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sector herself (members of the corporate sector). On the ICSB front we may have a Flagship Program with the Government ends to sensitize the private sector of the country about sustainability, Profiting for thyself & benefiting the society. Besides encouraging Corporate Governance Excellence Award - we should criticize corporate corruption & ensure symbolic punishment in the cases appropriate. Befitting measures should be taken against corporate corruption & fraud incidences at any scale. Besides annual Corporate Governance Excellence awarding initiatives there should be a continuous year long movement to promote, to create awareness and uphold SDG / SGI spirit of the government among the corporate players. Efficiency also needed to be ensured in the overall corporate practices to accelerate growth & ensure social development throughout the value chain of the companies concerned. As SDG is a whole the society approach – people from every walk of life should own this agenda & actively participation in the overall development process to achieve national success in a bottom up way in view of the Agenda 2030, in this regard everyone’s expectations to the Corporate Sector is also much high. References: 1. Bangladesh Bureau http://www.bbs.gov.bd/
of
Statistics:
2. SDG Tracker; https://a2i.gov.bd/sdg-tracker/ [last accessed on: 20 March,2019] 3. SDG Knowledge https://sustainabledevelopment.un.org accessed on: 20 March,2019]
Platform: [last
4. News Paper Article: “SDGs: Three years on, where do we stand?”; Dr Fahmida Khatun; September 2018; https://www.thedailystar.net/opinion/macro-mirror/new s/sdgs-three-years-where-do-we-stand-1637539
» About the Author Associate Member of the Institute
ARTICLE
Recognition for Corporate Governance Excellence Md. Mizanur Rahman QCS
I
The word “Excellence” in Business is often described as outstanding practices in managing the organization and achieving results, all based on a set of fundamental concepts or values. While, The word “Governance” came from the Latin verb “gubernare,” or more originally from the Greek word “kubernaein,” which means “to steer.” Basing on its etymology, governance refers to the manner of steering or governing, or of directing and controlling, a group of people or a state.
a business environment of trust, transparency and accountability in order to support investment, financial stability and sustainable economic growth. A strong Corporate Governance framework helps to promote good Management, integrity and better internal control, which in turn improves a Company’s performance. Good Corporate governance not only benefits companies but also contributes significantly to financial marker stability, investment and economic growth. Good Corporate Governance practices to establish responsibilities, timely disclosure, accountability and transparency.
What is Corporate Governance?
Corporate Governance practices in Bangladesh
Corporate governance is the system of rules, practices and processes by which a firm is directed and controlled. Corporate governance essentially involves balancing the interests of a company's many stakeholders, such as shareholders, management, customers, suppliers, financiers, government and the community. Since corporate governance provides the framework for attaining a company's objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure. Actually Corporate Governance is the most appropriate tool for achieving corporate excellence. Companies should identify, assess and establish core values, core capabilities and core purpose to achieve corporate excellence. Good corporate governance creates a transparent set of rules and controls in which shareholders, directors and officers have aligned incentives. Most companies strive to have a high level of corporate governance. Too many shareholders, it is not enough for a company to merely be profitable; it also needs to demonstrate good corporate citizenship through environmental awareness, ethical behavior and sound corporate governance practices.
In Bangladesh the culture of corporate governance practice is still in the very initial stage. The culture of practicing transparency and accountability has not yet been established properly. Nepotism and Bureaucratic problems are very much acute in Bangladesh. But now Bangladesh is gradually developing its professionalism in different aspects of its overall national development. Recently, Good governance practice is considered a newly introduced practice in the arena of Bangladesh as it helps to improve employees' morale and high productivity and ensures achievement of long-term goals of the business.
ntroduction
Corporate Governance practices in global arena Globally there is an increased realization and acceptability that corporate governance is a means to create
Corporate Governance Award Recognition of any achievement is always pleasing. On the other hand it also entails responsibilities. In the age of growing competition, corporate leaders have to be more knowledgeable in enhancing their quality of governance of corporations. The knowledge of the corporate leaders has become prime mover and probably this will be the increasingly felt in the days to come. Award or recognition helps the corporate bodies to be more vigilant in their performance, ethics, standards, professionalism and spread their wings in the global arena. Corporate Governance Award is one of the milestone acknowledgements for the corporate sector of Bangladesh. It helps the corporate bodies to achieve transparent and sound corporate governance practic-
January-March 2019 | 39
es, which will ultimately help them to sustain in the globalised competitive free market economy. This award will certainly inspire others to join the competition and go for excellence in their day to day performance and help to achieve global standard and earn reputation for the country as well as for itself also. Background of the Excellence Award:
Corporate
Governance
In Bangladesh, the Institute of Chartered Secretaries of Bangladesh (ICSB) is the pioneer of the award. The award is being given to the best corporate houses since 2014. The Awards were designed to encourage the improvement in corporate governance of listed companies in Bangladesh through providing recognition and prestige for listed companies in achieving outstanding commitment to shareholder rights, compliance, integrity, fairness, responsibility, accountability, transparency, board independence and leadership, and corporate social responsibility. These awards will not only encourage the awardees but also inspire others to emulate them and thus help steady enhancement of the proďŹ le of organization in Bangladesh as good corporate citizens. This award is a catalyst for greater accountability and better governance in the corporate sector of Bangladesh. Objectives: 1) To recognize corporate leadership quality for the year under review 2) To inspire the corporate houses to perform better and thus making the corporate environment more and more competitive to excel their own governance standards and performance. 3) To motivate organizations and their leaders to make further improvements in governance excellence. 4) To facilitate corporate houses to be competitive in the global arena and earn a sharp edge over others. 5) To implement of corporate governance norms in true letter and spirit. 6) To encourage and promote governing excellence in the corporate sector of Bangladesh through competition. Basis of Awarding: The reward is given to the winners based on the following documentations. 1) BSEC corporate governance guidelines
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2) Stock Exchange listing regulations 3) Global standard Board practices. 4) Relevant rules of global corporate governance Forum. 5) Any other information /documents as the jury Board thinks relevant. Assessment criteria: 1) Board independence & Governance 2) Board Systems and procedures. 3) Board Systems and audit Committee. 4) Transparency and disclosure compliances 5) Transparency and Internal Audit Functions 6) Shareholders Information & value enhancement 7) Stakeholders value enhancement. 8) Corporate Social Responsibility. 9) Timeliness in issuing Financial statements and holding AGM 10) Corporate Objectives, Governance initiatives. Awarding process: Three Companies in each category are awarded for their continuous commitment in compliance of Corporate Governance Excellence. Total 33 ( thirty three ) companies get the highest score in evaluation on the basis of pre-set questionnaires approved by the jury Board will be the winners of the competition. Category: Corporate Governance Excellence award is given among the following eleven groups: 1) Banking Companies 2) Non-Banking Financial Institution. 3) Insurance Companies 4) Pharmaceutical & Chemical Companies 5) Textile and RMG Companies 6) Food & Allied Companies 7) IT & Telecom companies 8) Engineering Companies 9) Manufacturing Companies 10) Fuel & Power Companies 11) Service Companies
ARTICLE Business benefits of the “Corporate Governance Excellence” Award
Correlation between Corporate excellence and Economic growth
The winners of the corporate Governance excellence award enjoy the following benefits:
Bangladesh is advancing in the global corporate horizon at a great speed. Recently, Bangladesh has achieved the status of developing county. The economy of our country is expanding gradually. Bangladesh has achieved the Millennium Development Goals (MDGs) in time and is heading towards achieving the Sustainable Development Goals. Our current government is committed to be middle income country by 2021 and a developed country by 2041. And in this context proper economic growth will be ensured when there will be the existence of transparency, fairness as well as accountability in everywhere. In these circumstances a comprehensive master plan should be adopted to continue the flow of the economic growth.
1) Better brand recognition 2) Increase in productivity 3) Expansion of total market exposure 4) Positive business reputation 5) Operational costs savings 6) Delegation of authority 7) Reduced risk of corporate cries and scandals 8) Improved share performance 9) Increased sales and customer loyalty
Governance
10) Organizational growth
Conclusion:
11) Easier access to capital
The introduction of the corporate governance excellence Award is nothing but a milestone in promoting governance excellence. Definitely, this award has been encouraging the corporate houses as this award is a token of recognition to those companies who have fulfilled the requirements of good governance practices. There is no doubt that this award will encourage more companies to review their systems and governance practices and thereby create healthy competition. Moreover as our country is now moving towards the Sustainable development Goats (SDG).In such case the contribution of the private sector will be very much significant in the attainment of the SDG. This award will also work as a catalyst to the both public and private sector especially for greater accountability and better governance in the corporate sector of Bangladesh.
12) Greater opportunity to attract talent and retain staff 13) Better financial performance Challenges of Corporate Governance practices 1) Conflict of interest 2) Bureaucratic problems 3) Practice of nepotism 4) Poor Board formation 5) Poor compliance practice 6) Poor Funding 7) Difficulties in maintaining neutrality 8) Timeliness 9) Pressure of the different stakeholders group 10) Fear to participate
» About the Author
11) Failure to submit the necessary documents within the mentioned deadline.
Qualified Chartered Secretary of the Institute
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Corporate World to Travel Extra Miles for Recognition and Rewards Md. Sohel Mollick
A
nnual Report provides a snapshot of a company's financial health at a particular point of time, giving insight into its performance, operations, cash flow, and overall conditions. Stakeholders need them to make informed decisions about their equity investments, especially when it comes time to vote on corporate matters. Board is under constant watch by stakeholders. Since investors cannot see behind the boardroom veil, they have little choice but to rely on various governance criteria as a stand-in for board quality: whether the board is truly independent, whether its composition is deliberate and under regular review, and whether board competencies align with and support the company’s forward-looking strategy. Directors face increased scrutiny around how equipped the board is with industry knowledge, capital allocation skills, and transformation experience. Driven by a desire to attract global investments (FDI), curb corruption, and strengthen corporate governance, the Government of Bangladesh is continuing to push for regulatory reform. For the first time Bangladesh Securities and Exchange Commission (BSEC) issued its notification on February 20, 2006 for introducing Corporate Governance guidelines on “comply or explain” for the listed companies. Subsequently BSEC issued Corporate Governance guidelines on “comply or else” on August 7, 2012. Finally On June 3, 2018, much to the surprise of many, Bangladesh Securities and Exchange Commission (BSEC) issued the Corporate Governance Code. For securing the “Complied Status” a company has to comply with the provisions of the relevant Bangladesh Secretarial Standards (BSS) that were issued by the Institute of Chartered Secretaries of Bangladesh (ICSB). In a nutshell BSS-1 on Board Meeting, BSS-2 on General Meeting, BSS-3 on Minutes and BSS-4 on Dividend. As a result, it is certainly insisting many companies to consider and aspire to meet this new standards. This Corporate Governance Code has triggered a significant wave of governance implications centered on improving transparency and financial reporting. Boards will face enhanced disclosure rules regarding the skills and experience of directors, which has triggered many companies to engage in board
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composition assessments. Directors are also limited in the number of boards they can serve simultaneously. The total number of members of a company’s Board of Directors shall not be less than five and more than twenty. Among other changes, appointment and responsibilities of Managing Director or Chief Executive Officer, Chief Financial Officer, Head of Internal Audit and Compliance, Company Secretary and Independent Director is very important. The reforms also include a requirement for the implementation of an oversight process for succession planning and updating the board evaluation and director review process. Governance stakeholders are eager to see how much progress Bangladeshi companies will make by the end of 2019, but many are not overly optimistic given the magnitude of changes required in such a short period of time. Investors are setting their expectations accordingly and understand that individual company’s governance norms will not transform overnight. While it is unclear exactly how the government and regulators will respond to noncompliance, companies and their boards are feeling anxious about the potential repercussions and penalties attached to. Globally, Chartered Secretaries Institute is known as the Institute of Governance. ICSB is nurturing the profession of Chartered Secretary in the field of Corporate Management, with emphasis on the Governance and Compliance issues. The objective of the ICSB’s Corporate Governance Excellence Award is to encourage and promote governing excellence in the Corporate Sector of Bangladesh through competition, to facilitate corporate houses to be competitive in the global arena and earn a sharp edge over others, to motivate organizations and their leaders to make further improvements in governance excellence and to recognize corporate leadership quality for the year under review. ICSB has developed its own scorecard principles for the evaluation of Award Winners on the basis of the documentation of BSEC Corporate Governance Guidelines, Stock Exchange Listing Regulations, Global Standard Board Practices and relevant rules of
ARTICLE Global Corporate Governance Forum. Assessment Criteria covers Board Independence & Governance, Board System and Procedures & Audit Committee, Transparency & Disclosure Compliances, Internal Audit Functions, Stakeholders Information & Value Enhancement, Corporate Social Responsibility, Corporate Objectives, Governance Initiatives/Recognitions and Timeliness in issuing Financial Statements and holding AGMs. Let’s focus on the “Carrot and Stick” approach of motivation that is based on the principles of reinforcement and that is developed by a philosopher Jeremy Bentham, during the industrial revolution. This theory is derived from the old story of a donkey, the best way to move him is to put a carrot in front of him and jab him with a stick from behind. The carrot is a reward for moving while the stick is the punishment for not moving and hence making him move forcefully. Thus, an individual is given carrot i.e. reward when he performs efficiently and is jabbed with a stick or is given a punishment in case of non-performance. CGEA of ICSB at a glance (in reverse order)
Year
Total Sector
Number of Winning Companies
5th CGEA 2017
11
28
th
8
22
rd
8
25
nd
2 CGEA 2014
10
28
1st CGEA 2013
5
15
4 CGEA 2016 3 CGEA 2015
ICSB CGEA Summary 30 20 10 0
5th CGA 2017 4th CGA 2016 3rd CGA 2015 2nd CGA 2014 1st CGA 2013
Total Sector
Number of Winning Companies
National Award on “Corporate Governance Excellence” was introduced by ICSB first in Bangladesh in 2014 to encourage and promote governing excellence in the corporate sector of Bangladesh. Now it is an annual mega event. Corporate Governance is a matter of everyday practice. One has to adopt discipline, ethics in his business as well as in personal life. Having rules in books but without practicing it is of no use. Self-imposed discipline is the best way of practicing discipline. In fact when ethics fail law comes in, still risk remains. ICSB, a statutory body under an act of Parliament, has been encouraging the organizations which are committed to complying with Corporate Governance guidelines for their long term sustainability. The organization who secured places in the top positions deserve admiration as those have been evaluated through an international standard and transparent procedures. I strongly believe that the awards will inspire these organizations to strive for further improvements to secure an honorable position in the corporate world and motivate others in the corporate entities to focus Corporate Governance practices in their functionalities. Bangladesh has achieved Millennium Development Goals (MDGs) and is actively engaged in realizing the more challenging Sustainable Development Goals (SDGs). Our GDP has shown steady growth over the past few years. In the last fiscal year, Bangladesh witnessed an 8.13% GDP growth. To retain the optimum economic growth of our country, Corporate Governance excellence is essentially needed. Good governance ensures accountability and transparency and is an important factor in attracting Foreign Direct Investment (FDI) into our county which in turn will boost up the entire economy and is likely to ensure achievements of Sustainable Development Goals (SDGs). Proper leadership is essential to ensure good governance in the corporate and public sectors. I hope that ICSB would continue to strive hard to produce competent and worthy qualified professionals, who would help to build a prosperous Bangladesh and will continue organizing National Award on “Corporate Governance Excellence” every year to inspire corporate performers.
» About the Author Deputy Secretary of the Institute
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NOTIFICATIONS JANUARY-MARCH 2019
This notification is too long (52 pages) for which we could not accomodate in our limited endeavour. For details the following link may be seen: http://www.sec.gov.bd/slaws/Bangladesh_Securities_and_Exchange_ Commission_(Qualified_Investor_Offer_by_Small_Capital_Companies)_ Rules,_2018.pdf
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NOTIFICATION
BANGLADESH SECURITIES AND EXCHANGE COMMISSION
Securities Commission Bhaban, E-6/C Agargaon, Shere-e-Bangla Nagar dmistrative Area, Dhaka-1207, Bangladesh.
No. BSEC/Surveillance/2018-912/61
February 19, 2019 Order
Whereas, the Bangladesh Securities and Exchange Commission is of the opinion that it is necessary in the interest of investors and securities market to withdraw the restriction imposed on Monno Jute Stafflers Limited, Mono Ceramic Industries Limited and Stylecraft Limited vide its order No. BSEC/Surveillance/2018-912/43 dated October 17, 2018 and No. BSEC/Surveillance/2018-912/32 dated August 16, 2018 and to place the shares of the Monno Jute Stafflers Limited, Monno Ceramic Industries Limited and Stylecraft Limited from the spot market to the public market; Now, therefore, the Commission, in exercise of the power conferred on it under Section 20A of the Securities and Exchange Ordinance, 1969 (XVII of 1969), hereby directs the Dhaka Stock Exchange Ltd. and the Chittagong Stock Exchange Ltd. to place the shares Monno Jute Stafflers Limited, Monno Ceramic Industries Limited and Stylecraft Limited from the spot market to the public market for transactions. Moreover, financial adjustment facilities in transactions of the shares of the said companies will be applicable as per the existing rules. This order shall be effective from February 20, 2019.
By order of the Bangladesh Securities and Exchange Commission
Dr. M. Khairul Hossain Chairman
Phone (PABX) : +88-02-55007131-2, Fax : +88-02-55007106, E-mail : secbd@bdmail.net, Web : www.sec.gov.bd
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