Abstract
Corporate governance has developed a higher profile in recent years in many emerging markets. Bangladesh as an emerging country provides an interesting case study. Whilst its economy has achieved an impressive growth rate, weak governance has caused an increasing number of companies to fail. Governance codes have been developed in many other emerging countries including Bangladesh and a comparative analysis may ascertain if their provisions are internationally compatible. This chapter discusses the theoretical framework and outlines the various governance codes and guidelines in Bangladesh and contrasts them with the OECD Principles of Corporate Governance as well as those codes in India and Pakistan. Using case studies and examples, we illustrate the key corporate governance characteristics typically found in companies in these countries. We highlight the common governance features and discuss their differences. Our chapter outlines a number of the practical and policy implications for corporate governance in the emerging markets of Bangladesh, Pakistan and India.
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Notes
- 1.
The major policies were related to: (i) privatization of poorly governed public enterprises (ii) encouraging public enterprises and foreign investors, while progressively discouraging the growth of the public sector (iii) improving the import regime, and introducing investment and export incentives, (iv) improving the efficiency of public sector industrial enterprises through financial restructuring and (v) improvements in pricing policies (Palit 2006).
- 2.
The World Investment Report 2011, published by The United Nations Conference on Trade and Development shows that although “FDI to South Asia declined due to recession, inflows to Bangladesh increased by nearly 30 % to $913 million” http://www.unctad.org
- 3.
BEI was established as a non-profit research centre. Its Board of Governors includes business personalities, political members and bureaucrats. BEI provides training to directors of companies, conducts dialogue with policy-makers and different stakeholder groups.
- 4.
The international donors that assisted in organizing the Taskforce on Corporate Governance and supported the development of the Code for Bangladesh: namely, the Department for International Development (DFID), the Commonwealth Secretariat and the Global Corporate Governance Forum (GCGF).
- 5.
In the case of India and Pakistan, their most recent codes were used for comparison. i.e. from India the “Corporate Governance Voluntary Disclosure” (2009), and from Pakistan the “Code of Corporate Governance” (2012).
- 6.
Although the Code of Corporate Governance for Bangladesh does not specify any number but referring internationally to successful companies it states 7–15 is an ideal size to ensure that the size of the board is large enough to include directors with diverse expertise and experience, but not too large to preclude involvement by all directors.
- 7.
Cumulative voting system is “a method of stock voting that permits shareholders to cast all votes for one candidate. A voting system that gives minority shareholders more power, by allowing them to cast all of their board of director votes for a single candidate, as opposed to regular or statutory voting, in which shareholders must vote for a different candidate for each available seat, or distribute their votes between a number of candidates” (www.corp-gov.org)
- 8.
For example the ‘Report of the Kumar Mangalam Birla Committee on Corporate Governance’ develops code provisions in 2000 which are mandatory for the listed companies. This code on corporate governance outlines the accounting standards, and financial disclosure provisions in detail which are still valid for Indian companies.
- 9.
Source: World Bank Data www.data.worldbank.org
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Ferdous, C.S., Mallin, C., Ow-Yong, K. (2014). Corporate Governance in Bangladesh: A Comparison with Other Emerging Market Countries. In: Boubaker, S., Nguyen, D. (eds) Corporate Governance in Emerging Markets. CSR, Sustainability, Ethics & Governance. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-44955-0_16
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