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Executive Summary
Corporate governance is a key element in improving the economic efficiency of a firm. Good
corporate governance also helps to ensure that corporations take into account the interests of a wide
range of constituencies as well as of the communities within which they operate. Further, it ensures
that their Boards are accountable to the shareholders. Good Corporate governance is a necessary
condition for a sound financial system in banking sector. It can contribute substantially to a shared
working environment between banks and its supervisors. It supports not only a well managed banking
system but also necessary to protect depositors' interest. The financial crisis provided a lesson on how
the collapse in the global banking sector impacts the entire world economy e.g. shrink in world Gross
Domestic Product, huge number of bankruptcies, massive bailouts from tax payers, losses of millions
of jobs, large decline in trade flows, and foreign direct investment and reduced credibility of the global
financial system is questioned among others. Therefore, Banks in particular, being the most important
vertebrae of a country’s economic backbone, require sound CG practice and proper monitoring of their
compliance compared to other industries. A large number of reforms have been proposed and initiated
by both various multilateral and country specific government and regulatory bodies especially after the
financial crisis to improve the global corporate governance principles and standards. Risk
management, executive compensation, capital requirements, and financial sector tax (i.e. banking tax)
are some of the aspects where both developments and debate are continuing. This research paper at
first briefly discusses various aspects of corporate governance framework. Considering all these
aspects, different disclosure issues have been selected to examine the actual corporate governance
practices by Banking Sector in Bangladesh. In the first chapter of thesis paper, I have introduced the
concept of corporate governance and tried to show the rationale & objectives of the study. In chapter
two, the procedure of collecting data has been discussed & how we have gone through the whole paper
is elucidated here. Apart from these, in the literature review part under chapter three encompasses the
previous writing on this issue which has been quite useful for preparing thesis paper. Besides, the
elements of Corporate Governance & its position in our country has been explained in Chapter four.
Moreover, in Chapter five, I tried to show out the analysis & findings part of thesis paper that reflects
the overall condition of corporate governance. And, in the last Chapter of thesis paper, some
recommendations have been provided which might be helpful for the interested users.

2. 2
The Global financial crisis has brought into focus the need for better supervision & governance in the
banking industry. Banks are corporations & their firm value depends on good governance as any other
firms. Corporate governance in banks is also of interest to businesses that are dependent on bank
finance. The cost of funds in efficiently governed banks is found to be lower. From policy perspective
bank regulators would have interest in sound corporate governance mechanism in banks from financial
system stability perspective. Bank Corporate governance is particularly important in le4ss developed
countries like Bangladesh because economic development & growth is dependent to a large extent on
well functioning, stable & soundly managed banking system. The obvious function of code of
corporate governance is to improve the quality of corporate governance practices in Bangladesh. The
code does this by defining best practice of corporate governance & specific steps that organizations
can take to improve corporate governance. In addition, the code provides a standard that can be used to
measure firms progress towards the goal of best practices. However, a problem which is how the CCG
can be fully implemented needs to be considered. Full implementation of the code in all banks of
Bangladesh would undoubtedly take a number of years & would require the cooperation of a vast
number of relevant stakeholders. The purpose of this study is to assess whether the corporate
governance practices in Bangladesh have undergone significant improvement after the introduction of
the code or not. To achieve the objectives of the study, we do content analysis of the annual reports of
banks in Bangladesh the code & various elements of corporate governance. The study is important for
several reasons. First, we contribute to the existing literature on corporate governance in banks by
providing evidence from an unexplored country like Bangladesh. As already indicated above, some
existing literature supports that improved corporate governance practice in banks leads to better
allocation of resources within an economy and contributes to growth. Second, the findings from the
assessment of the compliance with the Code of corporate governance would help the Securities and
Investment Commission in Bangladesh as well at the Bank of Bangladesh to take suitable policy
measures to further strengthen the corporate governance of banks in Bangladesh. These positive
findings are also expected to help the banking industry in Bangladesh to further strengthen the
corporate governance practices so as to achieve world’s best practice.
Chapter-I: Introduction

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1.1: Background of the study
Bachelor of Business Administration (BBA) program under Dept. of Accounting & information
systems requires undergoing Six weeks long internship or submission of Thesis Paper. The internship
program is supervised and examined by the guide teacher. Objective of the program is to expose the
students to the organizational work environment & make the students knowledgeable on specific area
through research. Under this program, each student is required to work with a topic to study on
reporting purpose. My supervisor teacher, Sadia Afroze, Associate professor, Department of AIS,
University of Dhaka authorized me to prepare thesis paper as a requirement part of BBA Program.
1.2: Statement of the problem
The reporting of corporate governance is a very crucial issue now-a-days. But the practices of
corporate governance by Bangladeshi companies are not satisfactory. However, credibility of the
reported figures and quality of implementation remain open to discussion. Recently, we have found
frauds occurring in the banking sector & because of that Common People including businessmen&
other stakeholders are getting concerned. In this case, it is quite obligatory to maintain the code of
corporate governance fully to tackle all these fraudulent activities. And it is known to all for the
development of a country the role of banking sector plays outstanding role. So, they have to practice
corporate governance on a priority basis.
1.3: Objectives of This Study
• To determine the commitment to implement good corporate governance practices among the
banks in Bangladesh.
• To find out whether Banking Sector gives full disclosure on their financial statements or not.
• To know the role, duties and responsibilities, composition, structure, practices, remuneration,
and performance evaluation and training of the members of different Board of Directors.
• To identify the control environment and processes of the banking sector of Bangladesh
• To determine the level of disclosures, the accuracy and timeline of the financial position,
condition and prospects, and other non-financial information of the banks in Bangladesh.

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• To be familiar with the rights of the shareholders in the banking sector to assess the status of
monitoring bank’s client on their CG practices
• To go through Code of governance by Bangladesh Bank and Bangladesh Securities &
exchange Commission with a view to getting sufficient knowledge on that.
• Finally, to develop a set of recommendations for addressing the major concerns derived from
the analysis.
1.4: Rationale of the study
This study paper has both academic and policy implications. First of all, it will enrich our knowledge
about corporate governance, the compliance status, practical situation of corporate governance in our
country and the magnitude of disclosure of corporate governance by the companies of our country.
The findings of this policy paper may contribute to Government, private sector, NGOs, academia and
civil society.
1.5: Limitations of the study
There are some limitations regarding this thesis paper-
The first limitation is the source of information. There is no well furnished publication about
the corporate governance in the DSE and SEC library.
Official of Banks are reluctant to give necessary information for thesis purpose.
It has not been possible for me to conduct this research for all banks. As, time is limited, I have
gone through only twenty Banks that might not represent actual information in all cases
Corporate Governance is a huge area & requires Professional knowledge .But without
professional knowledge on the basis of academic knowledge I have worked on it.

5. For the preparation of the thes
basically collected from two so
Primary data has been collected
we have provided Questionnaire
sorts of information for Thesis Pu
Annual Report, DSE library and
of the company etc.
Sources of information are as foll
The survey used a semi-structure
banking sector of Bangladesh.
different international CG guidel
institutions on CG. The total num
Banks, 23 Conventional Private
Foreign Commercial Banks. Besi
Chapter
2.1: Sources of Data
esis paper, Information sources were identified
sources. One is Primary source and the other
ed from direct interview with some professionals
ire to the employee’s of the Banks. From here w
Purpose. The secondary sources of information w
d several publications like books, magazines, trad
ollows:
2.2: Scope of the Study
ured questionnaire to collect the information on th
h. The questionnaire was prepared after an ext
elines and methodology, and research papers by
umber of scheduled banks 47 with 4 State Owned
ate Commercial Banks, 7 Private Commercial
esides additional 9 banks have got approval but th
er-II: Methodology of the Study
5
ied first. Information is
er is secondary source.
s of the banks. Besides
we have collected some
were collected from the
rade journals & websites
the CG practices in the
extensive review of the
y the global experts and
ed Banks, 4 Specialized
al Islamic Banks and 9
they have not yet started

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its operation. For this study, I have gone through twenty two banks. This includes state owned banks
& private commercial banks. The primary sources used for the survey encompass company annual
reports, articles, direct interview, going through books written on corporate governance & so on. Hard
copies of the questionnaire were sent to the employees of the Banks for completing the survey.
Respondents were requested to complete the questionnaire. In addition, one-to one semi-structured
interview was also conducted when necessary. Follow-up phone calls were made both for setting up
interview with those banks that wanted to be interviewed and also to collect the answer of the
questionnaire within shortest possible time. Besides, to prepare the whole thesis papers, we have used
a variety of graphs such as Column, Pie, and Bar etc. All these graphs will be helpful for our
understanding purpose. Besides, most of the analyses I have prepared in a percentage in order to make
proper comparison. Whatever findings I have got, all these are presented in the section of Analysis &
Findings.

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Corporate Governance has proved an issue since people began to organize them for a common
purpose. How to ensure the power of organization is harnessed for the agreed purpose, rather than
diverted to some other purpose, is a constant theme. The institutions of governance provide a
framework within which the social and economic life of countries is conducted. Corporate governance
concerns the exercise of power in corporate entities (www.ccg.uts.edu.au). There are probably as
many definitions of corporate governance as there are corporations. The earliest definition of
Corporate Governance is provided by the Economist and Noble laureate Milton Friedman (1970) (vide
Indian info line, 2001).
Accounting and Reporting (Geneva 27-29 October, 2004) UNCTAD Secretariat presented a report
(which was prepared after conducting a survey on 30companies representing different geographical
regions and industry) that found increasing convergence among national and international corporate
governance codes and guidelines but it also reported significant deviation in terms of disclosure
practices and content of disclosure.
Gompers et al (2003) used the incidence of 24 governance rules to construct a “Governance Index” to
proxy for the level of shareholder rights at about 1500 large firms in the USA during the 1990s. They
found that firms with stronger shareholder rights had higher firm value, higher sales growth, higher
profits, lower capital expenditures, and made fewer corporate acquisitions. But except for size and, to
a lesser extent, ownership structure,
Réal Labelle (2002) did not find consistent and significant relations between disclosure quality of
governance practices and firm performance or other corporate governance variables such as the
proportion of unrelated director, the CEO’s plurality of offices and the level of financing activity in
Canada. Similarly, a number of attempts have been made by various researchers throughout the world
regarding the determinants of corporate governance.
Chapter-III: Literature Review

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Durnev and Kim (2005) provided empirical and theoretical evidence that companies with greater
growth opportunities, greater needs for external financing, and more concentrated cash flow rights
practice higher quality governance and disclose more and the strength of their influence depends in
part on the country’s legal environment. On the other hand, Barucciand Falini (2005) find that in
Italian financial market, governance features are affected by shareholders’ composition, balance sheet
data and company features.
Anand et al. (2006) provided empirical evidence that the absence of a large empirical block holding
and a high need for external financing are the firm characteristics associated with the adoption of the
Canadian guidelines and when it comes to voluntarily adopting the U.S. Sarbanes-Oxley Act (SOX)
provisions, firm size becomes an important determinant.
From the context of Bangladesh, Hossain et al (2005) made a study on voluntary disclosures on
corporate governance in Bangladesh by taking 75 sample companies. They found that only 9
companies (12%) disclosed several issues on corporate governance in their annual reports covering
issues like Internal Financial Control (including management structure, financial reporting, asset
management, functional reporting), Statement of director’s responsibilities for preparation and
presentation of financial statements, Board Committees and Rights and relations with shareholders.
Besides, they also found 5 companies to highlight legal issues, 9 to disclose about business ethics, 7
companies to report on the shareholder’s dialogue, 5 to report on community relations, 14 to report on
environmental sustainability and no companies to report on human rights and labor standards.
Al-Amin and Tareq (2006) found significant statistical relationship between company size measured
by annual turnover and corporate governance disclosures after a survey of 30 companies. After
conducting a questionnaire survey of 151 companies in 2002, Centre for Policy Dialogue (CPD)
reported the adoption of corporate governance policy in 66.7 percent of the companies and compliance
with national and international benchmarks in 43.3 percent of the companies.

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Hossain and Khan (2006) conducted an extensive survey of 100 sample companies of DSE and/or
CSE (Chittagong Stock Exchange) and found significant relationship between corporate governance
disclosures and some corporate attributes such as multinational affiliation, linkage of auditor with big
four audit firms, concentrated ownership by sponsors and banking companies influence. In their
survey, they considered 25 issues in developing corporate governance disclosure index. The present
study has been conducted considering 45 different issues that not only cover these 25 issues but also
other important issues considered by UNCTAD (2004).
According to a 2003 Bangladesh Enterprise Institute (BEI) “Comparative Analysis of Corporate
Governance in South Asia” report, Bangladeshi corporate governance norms and practices lagged
behind the other large countries of the region. Along with raising awareness for the importance of
corporate governance, the report recommended reforms to create motivation for transparency and
accountability that will ultimately contribute to improved corporate governance. Some of these issues
were exposed in the 1996 stock market crash which left investors wary of the capital market for many
years.
More recently, a 2009 paper by Javed Siddiqui highlighted the persistent weaknesses in the
Bangladeshi corporate governance regime. The author notes that the “the corporate sector in
Bangladesh is characterized by high ownership concentration, lack of shareholder involvement [and];
the reluctance of firms to raise capital through the stock markets”, and reforms that are still only at
initial stages.
For instance, the Siddiqui paper explains that Bangladesh has failed to develop a recognized code of
corporate governance. The only comprehensive code of corporate governance developed so far has
been through the BEI, a donor-funded private sector think-tank without any statutory or regulatory
power. The author points out that “unlike the Cadbury Code (1992) or the Combined Code (FRC,
2003) in the UK, the BEI code has not been adopted by any stock markets” (p. 23). The Code,
however, recommends that the Securities Exchange Commission (SEC) apply a 'comply-or-explain'
approach to company compliance with the Code and incorporate it into the Dhaka Stock Exchange
(DSE) and Chittagong Stock Exchange's (CSE's) Listing Requirements. Although the BEI was
instituted as an independent private sector body, the author criticizes that the BEI ‘taskforce on CG’
included members from the Bangladesh Government and other important regulatory agencies,

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including the Chairman of the SEC. In addition, though not formally put together as a code, the
banking sector is governed by the Bangladesh Bank circulars relating to formulation of audit
committees, corporate governance, and appointment of the board of directors. Also, in 2006, the SEC
issued an order relating to corporate governance applicable only to companies listed on the stock
exchanges implemented on a comply-or-explain basis.
The capital market in the Bangladesh is regulated by the SEC. Established in 1993, the SEC’s
objective is to protect investors, promote and develop capital markets in Bangladesh, and regulate the
securities market. In 1999, the Asian Development Bank (ADB) initiated a USD 1.07 million project
to strengthen the regulatory capacity of SEC. Other regulatory agencies include the Registrar of Joint
Stock Companies (RSJC), the Bangladesh Bank, the DSE, the CSE, and the Institute of Chartered
Accountants of Bangladesh (ICAB). The SEC and RSJC exhibited many of the faults of government
agencies in Bangladesh, including insufficient staff and expertise. The BEI report also indicated that
the SEC has not been judicious in its use of powers and has appeared to be arbitrary and excessive at
times.
According to a 2008 ADB “Improvement of Capital Market and Insurance Governance Project”
program administration memorandum, a capital markets reform project is underway in Bangladesh.
The entire project, which is divided into two parts, is expected to reach completion in 2009. Part 1 of
the project has been designed to create "sound and efficient capital markets…to help accelerate
economic growth and poverty reduction" (p. iii), while Part 2 aims at enhancing the capacity and
governance of the insurance sector. The capital reforms part will have four components addressing the
SEC, the stock exchanges, the market intermediaries, and the Investment Corporation of Bangladesh
(ICB), respectively.
The second strand of literature looks at how better governance practices in banks can help their
financial development and growth (Levine, 1997; Bushman and Smith, 2003). Bushman and Smith
discussed economics-based research focused primarily on the governance role of financial accounting
information and propose future research ideas. As presented in their study, a framework that isolates
three channels through which financial accounting information can affect the investments,

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productivity, and value-added of firms namely the use of financial accounting information by
managers and investors, the use of financial accounting information in corporate control mechanisms
and the use of financial accounting information to reduce information asymmetries among investors.
The third strand looks at corporate governance practices in banks from the perspective of its impact on
performance and efficiency of the banks themselves (Jensen and Meckling, 1976; Hovey et al, 2003).
Andres and Vallelado (2008) have examined the corporate governance in banking: the role of the
board of directors. They pointed out that bank board composition and size are related to directors‟
ability to monitor and advice management and that larger and not excessively independent board
might prove more efficient in monitoring and advising functions, and create more value.
Kutubi (2011) has examined board of director’s size, independence and performance: an analysis of
private commercial banks in Bangladesh. This study has examined the impact of board size and the
independent directors on the performance of the local private commercial banks in Bangladesh. The
study has found that statistically significance positive relationship existed between the proportions of
the independent directors and the performance of the banks.
Hossain (2011) highlighted the corporate governance practices in Bangladesh. The study has pointed
out that good corporate governance has implication for company behavior towards employees,
shareholders, customers & banks. He has suggested that improving corporate governance can provide
significant rewards to both individual companies and countries.
Rashid et al (2010) have examined board composition and firm performance from Bangladesh
perspective. The study has also examined the influence of corporate board composition in the form of
representation of outside independent directors on firms‟ economic performance in Bangladesh. The
finding of the study has provided an insight to the regulators in this quest for harmonization of internal
corporate governance practices. Furfine (2001) suggested that banks have two related characteristics that
inspire a separate analysis of the corporate governance of banks. First, banks are generally more opaque
than nonfinancial firms. Although information asymmetries plague all sectors, evidence suggests that these
informational asymmetries are larger with banks (Furfine, 2001).

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4.1: Corporate Governance: Definition
Different authors view the meaning of corporate governance differently. For example, one school of
thought describes corporate governance as a “system” by which companies are directed and controlled
(Cadbury and Greenbury Report, CFACG 1992); another school views corporate governance as
“structures and processes for decision making, accountability, control and behavior at the governing
body” (Public accounts and Estimates Committee, 2002); to others corporate governance is about
“finding ways” to ensure effective decision making (Pound 1995). But it must be kept in our mind that
the fundamental concern of corporate governance is to ensure the conditions whereby a firm’s
directors and mangers are held accountable, ensure better and effective protection to all stakeholders.
The definition of corporate governance is largely affected by the size of the economy, differences in
the legal, regulatory, institutional, financial and political framework, status of the capital market, and
Stakeholder’s perception etc. However, irrespective of the differences, the inherent meaning of
corporate governance remains same across the world. Organization for Economic Cooperation and
Development (OECD’s) definition on corporate governance has been accepted by the most of the
countries. OECD defined corporate governance as the system by which business corporations are
directed and controlled .Ira M Millstein ,in his research paper, defined corporate governance as
“Corporate governance refers to that blend of law, regulation, and appropriate voluntary private sector
practices which enables the corporation to attract financial and human capital, perform efficiently and
thereby perpetuate itself by generating long term economic value for its shareholders, while
responding the interest of stakeholders and as a whole”. Thus finally we can say that corporate
governance refers to the structures and processes for the direction and control of the companies.
Corporate governance concerns the relationships among the management, Board of Directors,
controlling shareholders, minority shareholders and other stakeholders. Good corporate governance
contributes to sustainable economic development by enhancing the performance of companies and
increasing their access to outside capital.
Chapter-IV: A Brief Overview of Corporate Governance

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4.2: Corporate Governance: Importance
For emerging market countries, improving corporate governance can serve a number of important
public policy objectives. Good corporate governance reduces emerging market vulnerability to
financial crises, reinforces property rights, reduces transaction costs and the cost of capital, and leads
to capital market development. Weak corporate governance frameworks reduce investor confidence,
and can discourage outside investment. Also, as pension funds continue to invest more in equity
markets, good corporate governance is crucial for preserving retirement savings. Over the past several
years, the importance of corporate governance has been highlighted by an increasing body of academic
research. Studies have shown that good corporate governance practices have led to significant
increases in economic value added (EVA) of firms, higher productivity, and lower risk of systemic
financial failures for countries.
4.3: Importance of Good Corporate Governance for banking sector
Various research findings recommended that companies with good governance practices perform
better in commercial terms across the world. Adopting corporate governances best practices improve
access to external financing, lower the cost of capital, improve operational Performance, increase firm
valuation, improve share performance, and reduce the risk of corporate crises and scandals. Good
corporate governance also ensures the interest of every stakeholders including the investors by
offering premium price, companies with higher access to finance and reduction of risks resulting
improved profitability, the public sector through the development of stronger capital market, increased
investment, and high economic growth, and a business relationship among the stakeholders which is
based on the pillars of good corporate governance i.e. transparency, accountability, fairness and
responsibility. It is important to note that commercial banks and other deposit-taking financial
institutions have special governance risks and complexities since: (i) banks take large amounts of risk-
bearing obligations on their books, and hence weak internal controls and accountability can cause
urgent and rapid crises; (ii) the collapse of a bank will usually destroy value for its public depositors,
not just shareholders, and may even require a costly bail-out by the fiscal authorities, and; (iii) there is
the systemic risk that the collapse of a single bank can undermine the entire banking system. Because
of these special governance risks, banks are usually required by law or regulation to have certain
specific governance structures and reporting standards.

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4.4: Elements of Good Corporate Governance
Good board practices
• Clearly defined roles and authorities
• Duties and responsibilities of directors
Should be understood
• Board is well-structured
• Appropriate composition and mix of skills
• Appropriate board procedures
• Director remuneration in line with best
Practice
• Board self-evaluation and training conducted
Control environment
• Independent audit committee established
•Risk-management framework present Internal
control procedures
• Internal audit function
• Independent external audit conducts audits
• Management information systems established
• Compliance function established
Transparent disclosure
• Financial information needs to be disclosed
• Disclosure of Non-financial information
• Financials reports prepared according to
IFRS & IAS
• High-quality annual report should be
published
• Web-based disclosure
Well-defined shareholder rights
• Minority shareholder rights are formalized
• Well-organized general assembly conducted
• Policy on related-party transactions
• Policy on extraordinary transactions
• Clearly defined and explicit dividend policy
Board commitment
• The board discusses corporate governance issues and has created corporate governance
committee
• The company should have a corporate governance chairman
• A corporate governance improvement plan needs to be created
• Allocation of appropriate resources
• Policies and procedures should be formalized and distributed to relevant staff
• Development of corporate governance code
• publicly recognized corporate governance leader

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4.5: Corporate Governance in Bangladesh
In Bangladesh, corporate governance is still in its initial stage. Most of the companies depend on the
banks as their major source of financing. Capital market in Bangladesh is still at an emerging stage
with market capitalization amounting to only 6.5% of GDP with low investor confidence on corporate
governance and financial disclosure practices in many companies listed in the stock exchanges. The
neighboring countries are well ahead vis-à-vis Bangladesh in terms of depth of capital market.
However, Awareness of the importance of corporate governance in Bangladesh is growing. Securities
and Exchange Commission of Bangladesh issued a notification on Corporate Governance Guidelines
(CG Guidelines) for the publicly listed companies of Bangladesh under the power vested on the
Commission by Section 2 of the Securities and Exchange Ordinance, 1969. The CG Guidelines were
issued on a ‘comply or explain’ basis, providing some ‘breathing space’ for the companies to
implement on the basis of their capabilities. Nevertheless, the overall framework for investor
protection and CG has a number of important weaknesses that have hindered the capital market
development.CG practices in Bangladesh is gradually being introduced in most companies and
organizations. A considerable percentage of the top management does not fully understand the concept
of CG. However, Bangladesh has lagged behind its neighbors and the global economy in CG. One
reason for this slow progress in adopting CG is that most companies are family oriented. Such
concentrated ownership structures affects the effectiveness of corporate governance mechanisms,
which weaknesses cannot be rectified by laws and regulations.
Motivation to disclose information and improve governance practices by companies is also felt
negatively. There is neither any value judgment nor any consequences for CG practices. The current
system in Bangladesh does not provide sufficient legal, institutional and economic motivation for
stakeholders to encourage and enforce CG practices.
Corporate ownership structures
All corporate governance systems revolve around four core principles: Fairness, accountability,
responsibility and transparency. The specific challenges of upholding these principles depend on the
ownership structure of the corporate sector. However, in Bangladesh, general practice is that the
corporate structure is dominated by family members. Such practice hinders the level of fairness,
accountability and transparency.

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Inadequate Bankruptcy Laws
Bankruptcy laws and processes are inadequate in terms of provisions and not strong in terms of
enforcement in Bangladesh. No country can have good CG standards with poor bankruptcy laws and
processes. Besides, inefficient foreclosures and securitization processes have compounded the
problems in Bangladesh.
Lack of initiatives to drive for CG from the International Investor Community
Most companies in Bangladesh have a pessimist approach in attracting foreign investment. As a result,
there is a lack of drive from the international investor community for better corporate governance. We
do not get the proper accounting disclosure or some other relevant matters from multinational
Companies.
Accounting standards, audit and disclosure
The scenario of internal audit; accounting standards and disclosure and its impacts on CG and
management practices in Bangladesh are mixed. There are now elements of both positive scopes and
new challenges and risk for the corporations in these areas. Following the tradition of English law,
Bangladesh accounting standards are not based on codified law, but rely on Generally Accepted
Accounting Principles (GAAP) developed by accounting profession. These principles are primarily
shareholder oriented and are independent of tax considerations. In Bangladesh the companies have to
make disclosure of information required by law. Disclosure requirements for Initial Public Offerings
are defined by the Companies Act and the orders under the Securities and Exchange Ordinance, 1969.
Periodic disclosure requirements are mentioned in the Securities and Exchange Rules, 1987.
Inconsistency between Companies Act, BAS and SEC Requirements
The companies Act, 1994 provides, among others, provisions regarding preparation and publication of
financial statements, disclosures and auditing. However, in many cases, the Act lacks clarity with
regard to statutory requirements on disclosures in the financial statements of listed companies.
Moreover some accounting requirements mentioned in the Act are incompatible with International
Accounting Standards (IAS) which is required by the SEC. For example, contrary to IAS, the
Companies Act requires capitalization of gains and losses arising from changes in foreign exchange
rates under all circumstances. Another inconsistency is that the Companies Act does not require a
consolidated balance sheet for a holding company but it is required under the IAS. Inconsistencies
between IAS and the Companies Act need to be eliminated.

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Limited or No Disclosure regarding Related Party Transactions
Related party transactions are not disclosed properly in the financial statements. It is an impediment
towards achieving good CG in Bangladesh.
Weak Regulatory System
Bangladesh still follows the legal system inherited from the British administration. Currently, the
Companies Act of 1994 is the law that governs the incorporated domestic corporations and
institutions. The other significant laws which has important role in governing the corporate sectors are:
Securities and Exchange Ordinance 1969, Bangladesh Bank Order 1972, Bank Companies Act 1991,
Financial Institutions Act 1993, Securities and Exchange Commission Act 1993 and the Bankruptcy
Act, 1997. Here, weak regulatory system along with board interference with the management retards
the improvement of CG in the country.
Capital Market Role
Capital market facilitates good governance through information production and monitoring. The
capital market of Bangladesh consists of two stock exchanges: Dhaka Stock Exchange (DSE) and
Chittagong Stock Exchange (CSE).Bangladesh does not have depth in its equity market. Besides, there
is no development of Bond market. The capital market of Bangladesh is still a weak link in the
movement towards strengthening CG. The overall performance measures of its stock market show low
trading volume, intermittent bumps, not many new offerings and unsteady valuations more on the
declining side than otherwise. Recent stock market scandals have seriously eroded investor confidence
in the stock market. One vital aspect is that capital market in Bangladesh does not react significantly to
corporate performance in terms of higher stock valuation for accurate disclosure and poor stock price
for failure of accurate and full disclosure. There is little incentive in becoming a public company and
listing on the stock exchange in Bangladesh. Companies with good reputations can get bank financing
relatively easily than through share issue. Moreover, there are no bonds, fixed income or debt
instruments in the capital market. This means there are no pressure groups for enforcing CG
principles. Unlike the private mutual funds, the state-owned investment Company – Investment
Corporation of Bangladesh (ICB) – has not, until recently, been required to publish the net asset value
of its mutual funds or submit performance reports to the SEC.
General Meeting Scenario
General meetings of a company, in particular the Annual General Meeting (AGM) are the primary
platform where shareholders can raise their concerns and make their influence felt over the

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management towards attaining good governance. Although a good number of provisions in the Act
provided sufficient leverage to allow shareholders a voice in companies, most companies in
Bangladesh, are closely held. Small groups of shareholders own or control the majority of shares, and
by using that majority, control the decision making processes of the companies. In number of studies it
has been found that there is a negative correlation exists between good CG and defaulting in holding
annual general meetings in due time.
Board Committees
Board committees (audit, remuneration and nomination) are of critical importance in CG. Audit
Committee is now being treated as a principal player in ensuring good CG and rebuilding public
confidence in financial reporting. The role of Audit Committee, among others are: monitoring integrity
of financial statements, reviewing internal financial controls, recommending appointment of external
auditor and reviewing auditor independence and objectivity and audit effectiveness. The Remuneration
Committee’s responsibilities include establishment and review of the Managing Director’s
remuneration package and senior management salary packages. Remuneration Committee assists the
Board to attract, retain and motivate high caliber executives and director through proposing
remuneration that commensurate to their performance. Despite significant importance of the board
committees (as described), few boards (except for banks) has Audit Committees and almost none has
nomination or Remuneration Committees in Bangladesh.
The Boards of Directors
The Companies Act, 1994 provides for many stringent rules in respect of any negligence, default,
breach of duty or trust on the part of director, manager or officer of a company. However, experience
suggests that these are more honored in the breach than observance. In an overwhelming majority, the
board is heavily dominated by sponsor shareholders who generally belong to a single family. The
boards are actively involved in management. Most independent directors represent current or former
government officials or bureaucrats. They are appointed directors to assist company in getting licenses
or as payback for previous favors. In the context of Bangladesh, independent directors do not act as an
advocate for minority shareholders or as a source of innovative ideas.
Lack of Shareholder’s Activism
Shareholder rights are today recognized across the globe as relevant to efforts for improving and
strengthening CG. The average non-controlling or minority shareholders do not possess significant

19. 19
level of education, understanding and sophistication required to exert pressure on a company to change
behavior. The number of shareholders with sufficient knowledge and skills to understand company
operations and to hold management and the board of directors accountable is very low. Moreover,
general shareholders do not pay attention on issues of performance, business strategy, future business
plans, disclosures and processes that could give them a greater voice in the policy decisions of a
company. In fact, there is very little awareness about shareholders’ rights and responsibilities.
Shareholders’ activism is still an illusion in Bangladesh.
Market for Corporate Control
A market for corporate control plays an important monitoring function in CG, as poorly managed
companies will become takeover targets. In Bangladesh, there seems to have less initiative market for
corporate control. Recently, Bangladesh Bank & SEC are trying to regulate the code of corporate
governance in the listed companies.
Weak Pressure Groups
Shareholders, investor associations, institutional investors and the financial press can play significant
role in ensuring better CG. Each of these potential pressure groups is weak in Bangladesh. The
numbers of journalists who possess knowledge on financial reporting are limited and there are lacks of
investigative reports. Similarly public shareholders are not organized under a common platform (such
as shareholder associations) to demand better corporate governance. Unlike institutional investors in
most capital markets across the globe, the few State-owned Enterprises (SOEs) lack performance spirit
and motivation to force companies to improve CG as well as performance.
Lack of Auditor Independence
Auditors in Bangladesh are not considered independent to attest to the validity of the financial
statements of corporate entities. They have some fiduciary or financial relationship with the
management. Thus, most of the time we see the issue unqualified reports A study shows that most of
the companies conduct regular audit for effective implementation of the core labor policies.

20. 20
Poor Audit Report
Audited financial reports are rarely reliable and free from the control of the owners. Despite
irregularities (in respect of non compliance with the applicable IASs) in the audit report, the auditors
issue unqualified audit report on the financial statements.
4.6: Reforms initiated by the government and regulatory bodies to improve the
CG practices
• Corporatization of the state-owned commercial banks (SCBs) and delegating full autonomy to
the SCBs board
• Appointment of directors from the depositors to protect the shareholders right.
• Implementation of the capital adequacy framework (Basel II) from January 2010.
• Permission from the Bangladesh bank to raise capital through debt instruments (termed as
subordinated debt) instead of issuing only rights and bonus shares to the commercial banks for
boosting their capital in line with Basel II requirement
• Directions from the Bangladesh Bank to all commercial banks to organize training
programmes for all its directors on banking rules and regulation to effectively execute their
duties and to go online by December 2010.
• Introduction of incentive bonus for the Chief Executive Officers (CEOs) of all banks
• Guideline to submit the stress test reports by the banks to the BB twice in a year with an
objective to check out banks financial strength and see how it will stay afloat in difficult times
• Commitment to give the Credit Information Bureau (CIB) reports by the Bangladesh Bank on
online to the banks and financial institutions from June 2010 on a trial basis
• New bill on Alternative Dispute Resolution (ADR) passed by the parliament to settle loan
default cases out of court
• Mandatory credit rating requirement for the large private, public entities including the banks
• Proposal on separate pay scale for the Bangladesh Bank officials to reduce high employee
turnover (average 20% of the new recruited assistant director left the office primarily for
benefits)
• New momentum of privatization programme and proposal to form of a permanent bank reform
committee to strengthen the banking system and reduce risks

21. Importance
Here, Most of the respondents ha
Under
Here, many respondents have adm
0%
10%
20%
30%
40%
50%
60%
70%
80%
Not Important at all
0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Chapte
ce of Implementing Corporate Governan
have that CG is very important.
erstanding on Corporate Governance
admitted that CG contributes a lot to sustainable ec
Irrelevant Average importance Important Very Impo
0% 0%
30%
A system by which
directed & controlle
Set of tools to help
run the day to day a
Coomitment to con
sustainable econom
development
same thing as CSR
pter-V: Analysis and Findings
21
ance
economic development.
ery Important
70%
y which Companies are
controlled
s to help management
y to day activities
nt to contribute to
economic
as CSR

22. 22
Compliance level on CG Guidelines
Fully Comply Partially Comply Don’t Comply
Bangladesh Bank
Guidelines
95% 5% 0%
Bangladesh Securities &
Exchange Commission
96% 4% 0%
Here almost all banks have followed the guidelines of BB & BSEC. Few of the banks have lacking in
following those guidelines.
Benefits received implementing on corporate governance
If corporate governance is properly implemented, some of the benefits shown on graph will be
derived.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sustainability over time
Mitigation of risk
Comply with Banks requirements
Protect shareholder rights
Improve operational efficieny
lower Cost of Debt
Access to external Capital
Improve strategic decisions

23. Formally responsible for d
Basically, BOD & CEO are main
Corporate Governance
• Establishments of risk Ma
• Establishment of an intern
• Establishment of Commit
• Improvement of disclosur
• Changes to board membe
• Formalization of function
• Establishment of Corpora
4%
25%
3%
developing CG Policies
ainly responsible for developing CG policies respe
ce Reforms within banks
Management Unit
ernal audit functions
ittees that report directly to the board
sure & Transparency
berships
ons & responsibilities of the board
rate secretary position
68%
3%
Board of Dir
Corporate S
CEO/MD
Compliance
23
pectively
ard of Directors
rporate Secretary
mpliance Officer

24. 24
Reasons for initiating CG reforms within the Banks
Change of legal status
Change of ownership base
Need to attract external investments
Improvements required by Shareholders
Legal/regulatory requirements
Need to improve efficiency of internal operations
Improvements required by Board
Barriers to the improvements of corporate governance in Banks
Governance related information is commercial secret
Expenditure on Corporate governance issues yields poor returns
Corporate governance is a low priority in comparison to other banks
Lack of Qualified specialists to help with implementation

25. 25
Decisions taken by the various stakeholders of banks
Areas of Decisions Board Management Shareholders
in AGM
Electing/appointing and dismissing the chairman
of the Board
75% 25%
Electing/appointing and dismissing Members of
the Board
36% 64%
Electing/appointing and dismissing the CEO/MD 95% 5%
Electing/appointing and dismissing other key
executives/managers
20% 80%
Approving the remuneration of the members of
the Board
70% 5% 25%
Approving the remuneration of the CEO/MD 98% 2%
Setting bank strategy 74% 26%
Approving annual budgets of the banks 88% 7% 5%
Approving transactions with a value below 25%
of the book value of company´s/bank´s assets
75% 25%
Appointing external auditors 20% 80%
Approving the annual report, including annual
financial
Statements
30% 70%
Overseeing the risk management system 25% 70% 5%
Overseeing the internal control system 24% 76%

26. Dut
Most of the Banks board membe
members.
Criteria
Most of the board members ar
operate the banks.
0%
50%
100%
The Banks Director
actively take part in Bo
meetings
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
uties & responsibilities of the board
Board Composition
bers are ranged from 10 to 15 & some of the Ba
ria required to become a board member
are shareholders& they have competence & pr
Directors
art in Board The banks directors in all
their decisions act
honestly & in good faith
Act in the best inte
the company & a
shareholder
Being a sha
Age limitat
Professiona
Integrity
Competenc
Political Aff
High profile
others
26
Banks have less than 10
professional experience
best interest of
pany & all its
reholders
ing a shareholder
e limitations
ofessional experience
egrity
mpetence Level & Skilss
litical Affiliations
gh profile public officer

27. A
The age of most of the board m
board member whose age is less
Carries out periodic & Un
Reviews the accuracy o
document
Oversees the implementat
Implements internal contr
Develop recommendation
Oversees the periodic fina
Investigate cases of the us
Ensures that the board
requirements
75%
Average age of Board Members
members ranges from 50 to 59 years. And, I ha
ss than 30 years.
Function of Audit Committee
Unscheduled inspections and inventories of assets
of accounting entries & checks the accuracy &
tation of financial & business plans of the compa
ntrol activities on a daily basis
ions on the selection of an external auditor as well
inancial reporting process implemented by manag
use of insider information
rd & the executive bodies act in compliance
19%
75%
6%
less
30
40
50
60
27
have found none of the
ets & liabilities
y & timeliness of
pany
ell as fees
agement
ce with the legal
less than 30 years
30-39 years
40-49 years
50-59 tears
60-69 years

28. Sepa
It is seen that, chairman & MD/C
It is important that the directors o
in line with the strategic framew
have arranged board meetings m
arranged board meetings ranging
Chairman &
paration of Chairman & CEO/MD
/CEO are separate in all banks
Frequency of board Meeting
s of the board meet on a regular basis to ensure th
ework and protect the interests of its stakeholde
s more than 16 times in a particular period. Som
ng from 10-16.
100%
irman & MD/CEO are 100% Separate
28
that the bank is running
lders. Most of the banks
ome of the banks have
parate

29. 29
Materials distributed to directly for board meeting
The materials shown in graph are distributed directly to the board members on a priority basis before
the board meeting.
Position of Corporate Secretary
We have found that most of the banks have full time secretary according to our survey.
Performance Evaluation of Board Members and Management
From this survey I have come to know that about 90% responses show that the banks conduct
Performance evaluation of the CEO/MD and key senior management officials. In most cases these
evaluation is done by the board of directors of the banks (75%).
0% 20% 40% 60% 80% 100%120%
Drafts on decisions to be
approved
Updates on key performance
indicators
Financial statements for
reporting period
Minutes of the Previous Board
meeting
Explanations of each agenda
item
Meeting Agenda
Drafts on decisions to be approved
Updates on key performance
indicators
Financial statements for reporting
period
Minutes of the Previous Board
meeting
Explanations of each agenda item
Meeting Agenda

30. Most of the banks have internal a
to initiate those departments for i
About 90% percent of the surv
auditors which have the internatio
Extern
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
External Auditor Comp
100%
76%
Availability of departments
l audit dept & risk dept. Some of the banks which
r implementing corporate governance.
Status of External Auditors
rveyed banks are local auditors where as 10%
ational affiliation.
rnal auditor’s services other than audit
Compliance dept. Risk managent
dept.
Internal audit dept
100%
86%
98%
17%
5%
0%
2% Tax Consultin
Business Cons
Legal services
Others
No additional
30
ich don’t have are trying
% of the banks having
Yes
No
onsulting
ess Consulting
l services
dditional services received

31. 31
Functions of External Auditor
• Performs regular and extraordinary inspections of the bank´s financial
• and business operations
• Ensures that the Board and the executive bodies act in compliance
• with the legal requirements, the charter and by-laws during financial
• and business activities
• Investigates cases of the use of insider information
• Oversees the periodic financial reporting process implemented by
• Management
• Reviews the accuracy of accounting entries and checks the accuracy
• and timeliness of document flows
Information Disclosure & Transparency
The financial & operating results of the company
Company Objectives
Major Share ownerships & Voting rights
Qualification of the board members
Foreseeable risk factors
Governance structure & Policies
Compliance with IAS and IFRS
From this survey, almost all Banks follow Bangladesh Accounting standards (BAS) and
Bangladesh financial reporting standards & provide financial disclosure in the websites.

32. 32
Contents of Annual Reports
Management & Discussion Analysis
Information on the members of the board
Financial statements
External auditors opinion
Future plans of the Banks
Environmental, Social& economic Sustainability
Ownership structure & dividend Policy
Market share, sales & marketing data
Financial information about the bank
Report of the chairman of the board
Reasons for not disclosing information
Fear of repercussions from regulatory authorities
Fear of Unfair Competition
Security Issues
Lack of resources
Major Decisions taken in the AGM
Approving disclosure policies
Approving the Succession plan
Overseeing the internal audit function
Overseeing the risk management system
Approving the annual report
Appointing external auditors
Approving annual budgets of the Company
Approving the remuneration of the members of the board
Electing/appointing & dismissing the CEO/MD
Electing/appointing & dismissing the chairman

33. Criteri
Existence of formal corpo
Adequate composition of
Audit Committee with ma
Transparent accounting p
Disclosure of ownership s
Regular financial reportin
Existence of an external a
Monitori
Documents provided by t
Annual reports
Informal discussions
Internet & so on.
Constra
Here, Clients are reluctant to prov
0%
20%
40%
60%
80%
Reluctance
to elaborate
reports on a
periodic
basis
Lack of
legislation
re;ated to
disclosure
60%
20%
eria for evaluating clients CG practices
rporate documents(By-laws, board, policies, codes
of the Board
majority of Independent directors
practices
p structures
ting
l auditor & so on.
oring clients CG: Sources of Information
y the client
raints to obtain information from clients
rovide governing documents financial information
reluctance to
provide
governing
documents
reluctance to
provide
financial
information
75%
60%
Reluctance to el
periodic basis
Lack of legislati
disclosure
reluctance to pro
documents
reluctance to pro
information
33
es)
on
ts
ion on a periodic basis.
elaborate reports on a
ation re;ated to
provide governing
provide financial

34. 34
6.1: Recommendations
For Banks
1. Commitment to Good CG Practices
As CG practices are not familiar to all, banks should initiate massive awareness campaign (e.g.
Seminar, workshops etc.) Highlighting the meaning and the business case of good CG and Also, to
identify solutions to overcome the barriers of implementing good CG practices. Banks can form
partnership with various research and training institute.
Ultimate responsibility for ensuring CG lies with the board of banks. Banks can therefore
Delegate or appoint someone with formal responsibility to ensure good CG practices within the
banks.
Despite the facts that the regulators have provided a guideline on CG, the guidelines are more
general and basic in nature. Bank should develop its own code of CG to ensure that they are in
line with international best practices. In addition, code of ethics and board Charter serves very
important documents for ensuring good CG, and banks in Bangladesh Can think of developing
such documents in the long run.
Regular interaction between the chairman and the CEO of the banks on CG compliance and
Developments can establish a CG culture within the banks and this might give a direction to
others to facilitate the CG reform process in the banks.
2. Good Board Practices
Although the functions of the board are in major cases in line with best practices, certain Areas
need to be given special attentions. For example, board plays a minor role in Overseeing and
managing the risk management and internal audit function of the banks. Board members also
have limited information about how the banks manage the risk and Conduct the internal audit.
Therefore, board should consider overseeing these functions to ensure the best interests of the
stakeholders in greater detail. Succession planning is another area where the directors should
look into in future to ensure the smooth operations of the banks.
Chapter-VI : Recommendations & Conclusion

35. 35
The board structure in Bangladesh is unitary and there is lack of consensus in different laws
regarding the number of members who can sit in the board. The company act requires that the
Board should have at least 3 members, whereas SEC has a range of 5 to 20 members. Revised
Bank Company Act included 13 members as the maximum board size and 6 years term limit
for the directors. However, since the approval process of the Act is delayed, banks have the
Power to appoint more than 15 members, a regular practice at this moment. In addition, there is
no provision for the number of positions one person can hold at different banks and directors
are not liable to disclose their involvement. This gives an opportunity to a Single person to sit
on many boards in Banks. Bangladesh Bank also published the fit and proper test criteria for
both the directors and senior management of the banks, however, Proper implementation is a
big challenge. It was also observed in some banks that more Than 2 members belong to same
family or relatives. Banks in Bangladesh should constitute their board with an appropriate mix
of skills and experience and should think of balancing the board with young and female
representation.
One of the requisite actions of SEC’s guideline on CG is that the banks should have at least
One Independent Director (ID) in the board. While a number of banks have not yet
Incorporated ID into its board, the independence of some existing independent directors has
also raised a debate among the stakeholders. Besides, perception of having ID into the board is
still in elementary stage. Awareness on the benefits of having ID into the board is of utmost
importance and bank should perceive that appointing ID will certainly add value and might
provide greater access to capital.
Although all the banks in this survey has audit committees of the board, the role of committee
are not in line with international best practices. Also, most of the audit committees are
composed of non-executive directors and in major cases are not the independent directors.
Banks should encourage audit committees' members to understand the role of the committees
and should provide proper incentives. In this regard, international guidelines/principles on CG
can serve as a reference document for knowing the role of audit committees. In addition, an
independent director should be appointed to lead the committees who can provide his or her
independent judgment for the best interest of the bank’s stakeholders.

36. 36
Most of the banks do not have either nomination/CG or remuneration committees. For the
banks to become the leader in the industry and remain sustainable, both remuneration and CG
committee should be established.
Regular board meeting provides an important platform to the directors to set the strategy and
monitor the legal and regulatory compliance and policy implementation. Frequency of board
meetings in banks are in line with best practices; however, there are certain areas that need to
be improved for an effective board meeting e.g. the status of the timing and type of documents
shared with the board members before the board meetings. Bank should inform the board
members well in advance and circulate the agenda and the issues to be discussed at the
meeting so that the members can prepare themselves to actively take part in the discussions.
The role of corporate secretary is of utmost importance and needs to be further enhanced.
The position of chairman of the board and CEO/MD is separated by the regulations; however,
in some cases the board intervened in the day-to-day’s activities of the management. Therefore,
boards should emphasize more on developing strategy and policy framework for the banks, and
monitor the compliance of those policies and empower the day-to-day management decisions
to the management.
Board members receive fees for attending the board meeting and chairing different committees.
The maximum amount is set by the regulators, which is considered to be lowest among the
region and this brings a very little motivation for the directors to give their full time and
commitment in setting strategy and guiding the banks. Therefore, performance based
remuneration should be incorporated in the banks and remuneration policy for both the
directors and managements should be developed and shared with stakeholders.
Majority of the banks conduct performance evaluation at the management level in line with
best practices. However, the evaluation of the members of the board and the board as a whole
is not a common phenomenon in Bangladesh. Banks should initiate performance evaluation of
the board to ensure that the board achieve its purposes and are best able to protect the interest
of the stakeholders. Self evaluation of the board can be a starting point for the board to
evaluate its performance.
Although most of the banks consider CG practices as very important for banking business,
majority of the banks does not organize training programme on various aspects of good CG
practices for its directors. In addition, orientation programme to the members of the board is a

37. 37
rare example. Bank should consider organizing seminars, workshops sessions on CG for its
board members and also, should arrange orientation sessions for the new members.
3. Strong Control Environment and Processes
Banks' long term sustainability largely depends on how the banks manage its core risks, control
the internal environment, and conducting factual internal and external audit. For ensuring this,
the role of management is as important as the role of board. Although a large number of banks
have risk management committees at the management level, board should establish its own risk
management committee, develop risk management policy in consultation with management to
oversee and guide the management for managing risks efficiently. The board should also give
enough time to ensure proper alignment of banks strategy with risk-appetite and internal risk
management structure. The risk management policy should also be disclosed to ensure
accountability and transparency, internal control and internal audit of the banks.
Function and reporting relations of the risk management functions, internal control and audit
function should also be streamlined since some banks have multiple relationships and
sometimes not in line with best practices. For example, best practices call for management to
design and execute and the board to oversee the control function.
Since auditor rotation is mandatory for the banks in every three years, banks should consider
the quality of the audit instead of just changing the firms and should think of partnering with
firm with international audit experience. External auditors in any cases should not be given any
opportunity to perform services other than audit.
4. Strengthening transparency and disclosure
Banks should disclose both the financial and relevant non-financial information into its website
to facilitate the stakeholders e.g. supervisor, shareholders, media, researchers to have an access
to banks information.
The annual report of the banks serves as the most comprehensive documents of the banks and
shared with a wide range of stakeholders. Therefore, in addition to covering the financial
information of the company, the annual report should also include relevant nonfinancial
information for example, dividend policy, remuneration policy, policy on CSR and CSR
practices, risk management framework and policy, ownership structure, board charter,
shareholders rights protection among others.

38. 38
Banks’ disclosure policy should be shared and approved by the shareholders in AGM.
Disclosure should be done on time and should provide accurate picture of the banks.
Banks should accelerate the pace of implementing the international accounting standards i.e.
IFRS.
5. Protecting the shareholders right
Shareholders have the right to elect and dismiss directors of the banks but the nomination
Process is not very transparent. Before seeking approval from the shareholders, director’s
Skills, qualifications, and experience should be shared with the shareholders to ensure that they
know the people who are running their banks. Recent development on appointing directors
from the shareholders to protect the interest is an excellent initiative to protect shareholders
right, however, the process of selecting the directors need to be further scrutinized.
Shareholders' (including the minority shareholders) rights are protected in law. However,
because of the ownership concentration with small groups own or control the majority of share,
shareholders voice in most cases not often heard. Also, proper implementation of the
regulations is a big challenge. Banks should develop a Shareholder Handbook highlighting the
rights and responsibilities of the shareholders and share the book with each and every
shareholder. The handbook should cover information such as classes of shares, rights of the
shareholders including the minority shareholders, general meeting’s objective and procedures,
areas where shareholders approve certain decisions of the banks, and role of regulators in
protecting the shareholders rights among others.
Shareholder participation at the Annual General Meeting is relatively low. Bank should inform
the shareholders through proper channels (e.g. both electronic and print media), giving enough
time so that shareholders can attend the meeting. Shareholders should also be allowed to vote
electronically and in advance if they are unable to attend the AGM in addition to existing
voting practices by showing-of-hands or in proxy.
Banks can establish a shareholder desk at its own premises to receive feedback, suggestions
or even grievances. They should also take action on the feedback from shareholders and
communicate the actions to the shareholders. Bank can also arrange seminars to hear the voice
of the shareholders.

39. 39
Banks should develop Related Party Transaction (RTPs) policy and should share it with
shareholders for approval. • Banks should develop dividend policy and should share the policy
with shareholders in addition to providing timely dividend.
To promote shareholder activism, an autonomous institute can be established.
6. Improving clients’ CG practices
Being the largest source of finance for the business sectors in Bangladesh, Banks should play a
leadership role in promoting CG practices among its clients. Banks should include clients’ CG
assessment as key criterion and should give proper weight for its credit decision.
Banks should periodically review the CG practices of its clients and should provide feedback
to improve clients’ CG practices.
Banks should arrange incentive programmes for clients who have showed significant
improvements in CG practices. For example, banks can arrange award programmes for clients
with best CG compliance and share this information with other clients to improve the CG
culture amongst its clients.
Role of Other stakeholders
Ensuring good CG practices is a challenging task and is rewarding in the long run as well. The role of
banks is as important as the role of other stakeholders in establishing an effective CG framework in the
banking sectors. In addition to the above mentioned recommendations, establishing a good CG culture
also demands that the others stakeholders should also play an effective role.
Government and regulators
(e.g. Bangladesh Bank (BB), Securities and Exchange Commission (SEC), and relevant ministries)—
Both BB and SEC should revise their CG guidelines and include internationally
acknowledged principles and guidelines.
Rules regarding the size of the board and eligibility of the directors are highlighted in the
Company Act 1994, fit and proper test criteria of Bangladesh Bank and the guidelines on CG
issues by the SEC. Regulators should work together to streamline these regulations.
BB should provide request banks to establish nomination and remuneration committees at the
banks to ensure the transparency of director’s nomination process and remuneration structure.

40. 40
BB should motivate the government to pass the revised bank company act and to accelerate the
process of establishing the Financial Reporting Council. In addition, they should also
strengthen its monitoring of CG compliance of the banks.
BB should organize a global conference on CG in Bangladesh with presence from the global
leaders on CG to share the international best practices and developments around the world.
BB should also collaborate with other central banks in the region to explore a certification
programme for the directors through which bank directors of one country are eligible to sit to
the board of others country. This will motivate the directors towards CG education.
BB should initiate regular discussions with the banks on the business case of good CG
practices. They should also offer technical assistance.
Although SEC has instructed to make video recording mandatory, the effectiveness of these
remains a challenge. SEC can send representatives to oversee the AGM of the banks.
Local Credit rating firms should be requested to form partnership with firms with international
experience.
Full autonomy to the important regulators especially the BB and the SEC should be given to
set the tone at the policy level.
Shareholders
Being the owners of the company should dedicate time to learn the international CG best practices and
consider CG for investment decisions. Shareholders can establish a platform where they can raise their
voice in a coordinated way and should continue to pressurize the banks to disclose the financial,
operational and governance information. They should also act constructively in raising their voice.
Stock Exchange
(DSE, CSE)-can form partnership with other regional and international stock exchanges to learn and
share the best CG practices. With recent entry to some large mutual funds, and proposal to offload
shares of some state-owned enterprises, stock exchanges should expand its operation and accelerate its
investor’s awareness programme on a wide scale.
Chartered Accountants Bodies
(ICAB & ICMAB)—ICAB has recently partnered with ICAEW to update its curriculum for the
chartered accountants in Bangladesh. They should also provide international training on the role of
auditor, ethics in auditing and due diligence etc among others to ensure proper disclosure of both
financial and non-financial information of the Banks. There are only four audit firms with international

41. 41
affiliations. ICAB should encourage other audit firms to form partnership with international audit
firms to ensure best practices. .
Institutional Investors
Institutional Investors can act as a pressure group for implementing CG in banks. They should
consider good CG practices as investment decisions.
Credit Rating Agencies
Role of Credit rating agencies is particularly important for knowing the governance status of the
Banks. Although it is challenging to codify the CG status, they should consider going beyond the
number while rating the banks and incorporate the qualitative information on CG as much as possible.
They can develop certain criteria and can include certain points on CG compliance in their credit
rating.
Banking Associations
Two associations (Bangladesh Associations of Banks-owners and associations of Bankers Bangladesh-
CEOs/MDs) should arrange regular dialogue with key stakeholders to share the developments,
challenges for ensuring CG practices within the banking sectors. They should also engage in
conducting comprehensive research and can form partnership with other training institutes to provide
training on CG issues for both the members of the Board and the senior management officials.
Researchers & Academics
Researchers & Academics should continue to identify and explore the areas of improvements and
provide priority based suggestions to improve the CG practices. In addition, they can share the CG
developments and best practices with a wide group of stakeholders.
Media
Role of media in promoting CG practices through sharing CG developments, writing success and
failure stories etc. are crucial for establishing a good CG culture. Media should investigate the
financial, operational and governance practices and should report to publish the information.
International Organizations promoting CG
International Organizations can provide technical assistance as well as share the best practices with a
cross range of stakeholders to promote CG practices. They can form partnership with local institutes to
provide training on various aspects of good corporate governance to the board members, senior
managements and media people.

42. 42
6.2: CONCLUSION
Alike most of the countries in world, banking sector is playing a significant role in Bangladesh to
transform the economy towards self-sufficiency. Being the largest sources of finance and promising
industry for employment, banks assets contribution to GDP and market capitalization is also high In
addition, recent results on the sovereign credit rating by S & P’s and Moody’s Investors Service’s
(‘BB-‘for the long run and ‘B’ for the short run by S & P’s and Ba3 by Moody) will certainly extend
the possibility of getting larger access to foreign financial markets for both the private sectors and
government. Therefore, the governance of the banking sector is significantly important compared to
other industries. It is believed that the banking sector is relatively better regulated and governed than
any industry in Bangladesh but special attention needs to be taken from both the policy makers and the
banks itself to improve their governance practices, particularly if we revisit the lessons from the recent
global financial crisis. Several legal and regulatory reforms have been initiated to improve the
governance of the banking sector but the type and the pace of reforms, and their effective
implementation are not sufficient especially in comparison to the international development. In a good
number of areas, banks in Bangladesh are far behind international benchmark; for example, Awareness
on the CG issues among the stakeholders specially the board members on business case of good CG,
availability of bank level CG documents (i.e. CG code, code of ethics), Composition of the bank
board with appropriate mix education, skills, competencies, and gender, Availability of different board
level committees e.g. risk management committee, Interest to organize training programme on CG,
Board performance evaluation, Clear segregation of responsibilities between internal audit and
external audit, Inadequate disclosure on non-financial information, Disclosure of RTPs & conflict of
Interest, Shareholders awareness and protection, and effective monitoring of bank client’s CG
practices etc. In addition, role played by different bodies other than the banks' board, senior
management, and shareholders also remain challenges for ensuring an effective CG framework in
Bangladesh. Perception of the directors towards training on CG issues, prevailing unhealthy
competition among the banks in declaring dividends, little pressure for market for control and an
absence of merger and acquisitions culture, despite of having a large number of banks also limits the
practices of good CG in Bangladesh. In addition, recent hold-up of enacting the revised bank company
Act (which includes provisions such as size and duration of the board members, and large fines for
banking fraud), delay in establishing the Financial Reporting Council (FRC) to monitor and oversee

43. 43
the quality of financial reporting, establishment of the separate Banking and Financial Division under
the Ministry of Finance to oversee the banking regulations curtailing the autonomy of the central bank,
and appointing directors to the State-Owned Commercial Banks' (SCBs) boards on political
consideration has also raised some questions on the implementation of good CG practices in the
banking sector of Bangladesh. Therefore, the challenges remain with both development of new policy
framework on CG and proper implementation of the existing laws, regulations and guidelines. These
can be done only through an all inclusive approach and participation of all relevant stakeholders to
ensure good CG framework in Bangladesh.

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III. Appendixes
Appendix-1: Summary of BSEC’s Guidelines on Corporate Governance
Titles Explanations
1.1
Board’s size
The number of the board members of the company shall not be less than 5
(five) and more than 20 (twenty)
1.2
Independent Directors
At least one fifth (1/5) of the total number of directors in the company’s
board shall be independent directors.
who does not have any other relationship, whether pecuniary or otherwise,
who is not a member, director or officer of any stock exchange;
who is not a shareholder, director or officer of any member of stock
exchange or an intermediary of the capital market;
who is not a partner or an executive or was not a partner or an executive
during the preceding 3 (three) years of the concerned company’s statutory
audit firm;
who shall not be an independent director in more than 3 (three) listed
companies;
The independent director(s) shall be appointed by the board of directors and
approved by the shareholders in the Annual General Meeting (AGM).
The post of independent director(s) cannot remain vacant for more than 90
(ninety)days.
The tenure of office of an independent director shall be for a period of 3
(three) years, which may be extended for 1 (one) term only.
1.3 Qualification of
independent Director
Independent Director shall be a knowledgeable individual with integrity who
is able to ensure compliance with financial, regulatory and corporate laws
and can make meaningful contribution to business.

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The person should be a Business Leader/Corporate
Leader/Bureaucrat/University teacher with Economics or Business Studies or
Law background/Professionals like Chartered Accountants, Cost &
Management Accountants, and Chartered Secretaries. The independent
director must have at least 12 (twelve) years of corporate
management/professional experiences.
In special cases the above qualifications may be relaxed subject to prior
approval of the Commission.
1.4
Chairman of the Board
and Chief Executive
officer
The positions of the Chairman of the Board and the Chief Executive Officer
of the companies shall be filled by different individuals. The Chairman of the
company shall be elected from among the directors of the company. The
Board of Directors shall clearly define respective roles and responsibilities of
the Chairman and the Chief Executive Officer.
1.5 The Director’s Report
to Shareholders
Industry outlook and possible future developments in the industry
Segment-wise or product-wise performance
Risks and concerns
A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit
Margin.
Discussion on continuity of any Extra-Ordinary gain or loss
Basis for related party transactions- a statement of all related party
transactions should be disclosed in the annual report.
Utilization of proceeds from public issues, rights issues and/or through any
others instruments.
An explanation if the financial results deteriorate after the company goes for
Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Offer,
Direct Listing, etc.
If significant variance occurs between Quarterly Financial performance and
Annual Financial Statements the management shall explain about the
variance on their Annual Report.

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Remuneration to directors including independent directors.
The financial statements prepared by the management of the issuer company
present fairly its state of affairs, the result of its operations, cash flows and
Changes in equity.
Proper books of account of the issuer company have been maintained
Appropriate accounting policies have been consistently applied in
preparation of the financial statements and that the accounting estimates are
based on reasonable and prudent judgment.
International Accounting Standards (IAS)/Bangladesh Accounting Standards
(BAS)/International Financial Reporting Standards (IFRS)/Bangladesh
Financial Reporting Standards (BFRS), as applicable in Bangladesh, have
been followed in preparation of the financial statements and any departure
there-from has been adequately disclosed.
The system of internal control is sound in design and has been effectively
implemented and monitored.
There are no significant doubts upon the issuer company's ability to continue
as a going concern. If the issuer company is not considered to be a going
concern, the fact along with reasons thereof should be disclosed.
Significant deviations from the last year’s operating results of the issuer
company shall be highlighted and the reasons thereof should be explained.
Key operating and financial data of at least preceding 5 (five) years shall be
summarized.
If the issuer company has not declared dividend (cash or stock) for the year,
the reasons there of shall be given.
The number of Board meetings held during the year and attendance by each
director shall be disclosed.
The pattern of shareholding shall be reported to disclose the aggregate
number of shares (along with name wise details where stated below) held by:
Parent/Subsidiary/Associated Companies and other related parties (name
wise details);

47. 47
Directors, Chief Executive Officer, Company Secretary, Chief Financial
Officer, Head of Internal Audit and their spouses and minor children (name
wise details);
Executives
Shareholders holding ten percent (10%) or more voting interest in the
company (name wise details).
a brief resume of the director;
nature of his/her expertise in specific functional areas
Names of companies in which the person also holds the directorship and the
membership of committees of the board.
2 CFO, Head of Internal audit and company secretary
2.1
Appointment
The company shall appoint a Chief Financial Officer (CFO), a Head of
Internal Audit (Internal Control and Compliance) and a Company Secretary
(CS). The Board of Directors should clearly define respective roles,
responsibilities and duties of the CFO, the Head of Internal Audit and the
CS.
2.2
Requirement to attend
Board meeting
The CFO and the Company Secretary of the companies shall attend the
meetings of the Board of Directors, provided that the CFO and/or the
Company Secretary shall not attend such part of a meeting of the Board of
Directors which involves consideration of an agenda item relating to their
personal matters.
3.Audit committee The company shall have an Audit Committee as a sub-committee of the
Board of Directors
The Audit Committee shall assist the Board of Directors in ensuring that the
financial statements reflect true and fair view of the state of affairs of the
company and in ensuring a good monitoring system within the business.
The Audit Committee shall be responsible to the Board of Directors. The
duties of the Audit Committee shall be clearly set forth in writing.

48. 48
3.1
Constitution of Audit
Committee
The Audit Committee shall be composed of at least 3 (three) members.
The Board of Directors shall appoint members of the Audit Committee who
shall be directors of the company and shall include at least 1 (one)
independent director.
All members of the audit committee should be “financially literate” and at
least 1 (one) member shall have accounting or related financial management
experience.
When the term of service of the Committee members expires or there is any
circumstance causing any Committee member to be unable to hold office
until expiration of the term of service, thus making the number of the
Committee members to be lower than the prescribed number of 3 (three)
persons, the Board of Directors shall appoint the new Committee member(s)
to fill up the vacancy (ies) immediately or not later than 1 (one) month from
the date of vacancy (ies) in the Committee to ensure continuity of the
performance of work of the Audit Committee.
The company secretary shall act as the secretary of the Committee.
The quorum of the Audit Committee meeting shall not constitute without at
least 1 (one) independent director.
3.2
Chairman of Audit
Committee
The Board of Directors shall select 1 (one) member of the Audit Committee
to be Chairman of the Audit Committee, who shall be an independent
director.
Chairman of the audit committee shall remain present in the Annual General
Meeting (AGM).
3.3 Role of Audit Committee
Oversee the financial reporting process.
Monitor choice of accounting policies and principles
Monitor Internal Control Risk management process

49. 49
Oversee hiring and performance of external auditors
Review along with the management, the annual financial statements before
submission to the board for approval
Review along with the management, the quarterly and half yearly financial
statements before submission to the board for approval
Review the adequacy of internal audit function
Review statement of significant related party transactions submitted by the
Management
Review Management Letters/ Letter of Internal Control weakness issued by
statutory auditors.
When money is raised through Initial Public Offering (IPO)/Repeat Public
Offering (RPO)/Rights Issue the company shall disclose to the Audit
Committee about the uses/applications of funds by major category (capital
expenditure, sales and marketing expenses, working capital, etc), on a
quarterly basis, as a part of their quarterly declaration of financial results.
Further, on an annual basis, the company shall prepare a statement of funds
utilized for the purposes other than those stated in the offer
document/prospectus.
3.4.1
Reporting of the Audit
Committee
The Audit Committee shall report on its activities to the Board of Directors
The Audit Committee shall immediately report to the Board of Directors on
the following findings, if any:- report on conflicts of interests; suspected or
presumed fraud or irregularity or material defect in the internal control
system; suspected infringement of laws, including securities related laws,
rules and regulations; any other matter which shall be disclosed to the Board
of Directors immediately.
3.4.2 Reporting to the
Authorities
If the Audit Committee has reported to the Board of Directors about
anything which has material impact on the financial condition and results of
operation and has discussed with the Board of Directors and the management
that any rectification is necessary and if the Audit Committee finds that such

50. 50
rectification has been unreasonably ignored, the Audit Committee shall
report such finding to the Commission, upon reporting of such matters to the
Board of Directors for three times or completion of a period of 6 (six)
months from the date of first reporting to the Board of Directors, whichever
is earlier.
3.5 Reporting to the
Shareholders and
General Investors
Report on activities carried out by the Audit Committee, including any report
made to the Board of Directors under condition 3.4.1 (ii) above during the
year, shall be signed by the Chairman of the Audit Committee and disclosed
in the annual report of the issuer company.
4.External/Statutory
Auditors
The issuer company should not engage its external/statutory auditors to
perform the following services of the company; namely
Appraisal or valuation services or fairness opinions
Financial information systems design and implementation
Book-keeping or other services related to the accounting records or financial
Statements, broker-dealer services, actuarial services. Internal audit services
& any other service that the Audit Committee determines
No partner or employees of the external audit firms shall possess any share
of the company they audit at least during the tenure of their audit assignment
of that company.
5. Subsidiary Company Provisions relating to the composition of the Board of Directors of the
holding company shall be made applicable to the composition of the Board
of Directors of the subsidiary company.
At least 1 (one) independent director on the Board of Directors of the
holding company shall be a director on the Board of Directors of the
subsidiary company
The minutes of the Board meeting of the subsidiary company shall be placed
for review at the following Board meeting of the holding company
The minutes of the respective Board meeting of the holding company shall
state that they have reviewed the affairs of the subsidiary company also
The Audit Committee of the holding company shall also review the financial

51. 51
statements, in particular the investments made by the subsidiary company
6.Duties of CEO and
CFO
The CEO and CFO shall certify to the Board that:
They have reviewed financial statements for the year and that to the best of
their knowledge and belief-
these statements do not contain any materially untrue statement or omit any
material fact or contain statements that might be misleading
These statements together present a true and fair view of the company’s
affairs and are in compliance with existing accounting standards and
applicable laws.
There are, to the best of knowledge and belief, no transactions entered into
by the company during the year which are fraudulent, illegal or violation of
the company’s code of conduct.
7.
Reporting and
Compliance of
Corporate Governance
The company shall obtain a certificate from a practicing Professional
Accountant/Secretary (Chartered Accountant/Cost and Management
Accountant/Chartered Secretary) regarding compliance of conditions of
Corporate Governance Guidelines of the Commission and shall send the
same to the shareholders along with the Annual Report on a yearly basis.

52. 52
Appendix-2: Summary of BB’s Guidelines on Corporate Governance
Condition No. Title
Responsibilities and authorities of the board of directors.
01.(a) Work-planning and
strategic management
(i) The board shall determine the objectives and goals and to this
end shall chalk out strategies and work-plans on annual basis.
(ii)The board shall review analytical part of the annual report
and apprise the shareholders of its opinion.
01.(b) Lending and Risk
Management
(i)The board shall set out the policies, strategies, procedures etc.
in respect of appraisal of loan/investment proposal, sanction,
disbursement, recovery, rescheduling and write-off and so on.
(ii) The board shall also frame policies for risk management and
get them complied with and shall monitor at quarterly rests the
compliance thereof.
01.(c) Internal Control
Management
(i) The board shall be vigilant on the internal control system of
the bank in order to attain and maintain satisfactory qualitative
standard of its loan/investment portfolio.
(ii) Banks are also advised to set up complaint Cell in their
Zonal Offices for prompt settlement of the complaints received
01.(d) Human Resource
management and development
(i) Policies relating to recruitment, promotion, transfer,
disciplinary and punitive measures, human resources
development etc should be set up.
(ii) The board needs to focus its special attention to the
development of skills of bank's staff in different fields of its
business activities.
01.(e) Financial Management (i) The annual budget and the statutory financial statements shall
finally be prepared with the approval of the board.
(ii) It’ll frame out the policies and procedures for bank's
purchase and procurement activities and approve the distribution

53. 53
of power for making such expenditures.
01.(f) Formation of Supporting
Committees
For decision on urgent matters an executive committee,
whatever name called, may be formed with the directors.
01.(g) Appointment of CEO The board shall appoint a competent CEO for the bank with the
approval of the Bangladesh Bank.
02. Rights/Responsibilities of the
chairman of the board of
directors
(i) The chairman of the board of directors does not personally
possess the jurisdiction to apply policymaking or executive
authority.
(ii)The Chairman may conduct on-site inspection of any branch
and financial activities and may investigate into any such affairs.
the chairman shall submit report to BODs or any executive
committee
(iii) The chairman may be offered an office-room, a personal
secretary/assistant, a telephone at the office and a vehicle in the
business-interest of the bank subject to the approval of the board
03.Responsibilities of the adviser The adviser, whatever name called, shall advise the board of
directors or the CEO on such issues only for which he is
engaged in terms of the conditions of his appointment. He shall
neither have access to the process of decision-making nor shall
have the scope of effecting executive authority in any matters of
the bank including financial, administrative or operational
affairs.
04.Responsibilities and
authorities of the CEO
(i) In terms of the financial, business and administrative
authorities vested upon him by the board, the CEO shall
discharge his own responsibilities. He shall remain accountable
for achievement of financial and other business targets by means
of business plan, efficient implementation thereof and prudent
administrative and financial management
(ii) The CEO shall ensure compliance of the Bank Companies
Act, 1991 and/or other relevant laws and regulations in

54. 54
discharge of routine functions of the bank.
(iii) The CEO shall include information on violation of any law,
rules, regulation including Bank Company Act, 1991 while
presenting memos before the Board or the committee formed by
the board.
(iv) CEO will provide all sorts of information to Bangladesh
Bank about the violation of Banking Companies Act, 1991 and
any violation of Laws, rules and regulations.
(v) The recruitment and promotion of all staff of the bank except
those in the two tiers below him shall rest on the CEO. He shall
act in such cases in accordance with the approved service rules
on the basis of the human resources policy and sanctioned
strength of employees as approved by the board.
05.Meeting of Board of Directors Board of Directors may meet once or more than once in a month
if necessary; but Board of Directors shall meet once in every
three months.
06. Number of members in
Executive Committee
The number of Executive Committee members shall not exceed
seven.
07. Training for Directors The directors shall be aware of banking related laws, rules and
regulations through proper training.

55. 55
Appendix-3: OECD’s Principles for Corporate Governance
Principles
Principle 1:
Ensuring the Basis for an
Effective Corporate
Governance Framework
The corporate governance framework should promote
transparent and efficient markets, be consistent with the rule
of law and clearly articulate the division of responsibilities
among Different supervisory, regulatory and enforcement
authorities.
Principle 2:
The Rights of Shareholders and
Key Ownership Functions
The corporate governance framework should protect and
facilitate the exercise of shareholders’ rights
Principle 3:
The Equitable Treatment of
Shareholders
It should ensure the equitable treatment of all shareholders,
including minority and foreign shareholders. All
shareholders should have the opportunity to obtain effective
redress for violation of their Rights.
Principle 4:
The Role of Stakeholders in
Corporate Governance
It should also recognize the rights of stakeholders
established by law or through mutual agreements and
encourage active co-operation between Corporations and
stakeholders in creating wealth, jobs, and the sustainability
of financially sound enterprises.
Principle 5:
Disclosure and Transparency
timely and accurate disclosure made on all material matters
regarding the corporation, including the financial situation,
performance, ownership, and governance of the company
should be ensured
Principle 6:
The Responsibilities of the
Board
It should also encompass the strategic guidance of the
company& the effective monitoring of management by the
board,.
Source: www.oecd.org

56. 56
Appendix IV: List of Banks
State-owned commercial banks
1. Janata Bank (JB)
2. Sonali Bank (SB)
Private commercial banks
1. Al-Arafah Islami Bank Limited
2. AB Bank Limited
3. Bank Asia Limited
4. BRAC Bank Limited
5. Dhaka Bank Limited
6. Dutch Bangla Bank Limited
7. Eastern Bank Limited
8. Islami Bank Bangladesh Limited
9. Jamuna Bank Limited
10. Mercantile Bank Limited
11. Mutual Trust Bank Limited
12. National Bank Limited
13. One Bank Limited
14. Prime Bank Limited
15. Pubali Bank Limited
16. Shahjalal Islami Bank Limited
17. Standard Bank Limited
18. The City Bank Limited
19. Trust Bank Limited
20. United Commercial Bank Limited

57. 57
Appendix-V: Acronyms
AGM- Annual General Meeting
BB- Bangladesh Bank
BEI- Bangladesh Enterprise Institute
BIS- Bank for International Settlements
CG- Corporate Governance
CRAB- Credit Rating Agency of Bangladesh
CRISL- Credit Rating Information and Services Limited
CSE- Chittagong Stock Exchange
CSR- Corporate Social Responsibility
DSE- Dhaka Stock Exchange
GDP- Gross Domestic Product
ICAB- Institute of Chartered Accountants of Bangladesh
IOSCO -International Organization for Securities Commissions
ICMAB- Institute of Cost and Management Accountants of Bangladesh
ID- Independent Director
IFC- International Finance Corporation
IMF- International Monetary Fund
OECD- Organization for Economic Co-operation and Development
RTPs- Related Party Transactions
SCBs -State-Owned Commercial Banks
BSEC- Bangladesh Securities and Exchange Commission
WB- World Bank