Dhaka, Bangladesh, May 29,2010—Today, the World Bank, IFC Global Corporate Governance Forum and Bangladesh Enterprise Institute launched the Corporate Governance Report on Standards and Codes (ROSC) which provides an assessment of Bangladesh’s corporate governance policy framework. The report highlights recent improvements in corporate governance regulation, makes policy recommendations, and provides investors with a benchmark against which to measure corporate governance in the country. The report was prepared in cooperation with the Bangladesh Securities and Exchange Commission.
In support of this World Bank Group’s effort to conduct the study, Mr. Abul Maal Abdul Muhit, Honorable Finance Minister, Government of Bangladesh said, “corporate governance is essential for stable growth and development of the private sector. The study is a great step going forward.”
Good corporate governance helps to protect minority shareholders, improves performance, ensures that companies use their resources more efficiently, and increases access to capital needed for sustained long-term economic growth.
Bangladesh has taken steps to improve corporate governance practices in recent years, but continues to face significant challenges. For example, in 2006 Bangladesh’s Securities and Exchange Commission (SEC) issued Guidelines on Corporate Governance and the Bangladesh Enterprise Institute (BEI) has been providing training to a number of board directors of listed companies and state-owned enterprises, but implementation of the Guidelines and professionalization of the board of directors and management remain in question, and additional institutional and legal reform are needed.
“While the SEC has been active in trying to protect investors, for capital markets to continue to grow and approach the size of other Asian economies, substantial and long term reform will be needed,” said Mr. David Robinett, Private Sector Development Specialist, World Bank and lead author of the report.
Bangladesh’s capital markets still remain some of the most underdeveloped in the region. The basic legal framework for corporate governance in Bangladesh is dated. There is a need to streamline rules and regulations that apply to listed companies. Shareholders do not have sufficient rights regarding related party transactions, the choice of board members, or the disclosure of control.
The launch of this report comes on the eve of an IFC-sponsored media training workshop for journalists aimed at building capacity in business reporting, particularly on corporate governance. IFC Global Corporate Governance Forum in partnership with Thomson Reuters Foundation and BEI will host the event over the next three days.
IFC also works to improve the corporate governance enabling environment, build local capacity and improve the understanding of the benefits of good corporate governance practices and regulation.
About the ROSC
The CG ROSC is part of a global initiative to benchmark relevant laws and practices against the OECD Principles of Corporate Governance. 72 ROSCs have been conducted in 59 countries, including many in South and East Asia. The Bangladesh and other ROSCs can be found at: http://www.worldbank.org/ifa/rosc_cg.html
About the World Bank Group
The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world.
