Country Presentation Bangladesh

1
Country PresentationBangladesh

• Lopa Rahman
• Project Coordinator
• Bangladesh Enterprise Institute

2
A Snapshot of Bangladesh

• Area 147,570 sq. km
• Population 140 million
• Density of Population 832 per sq. km
• Male Female Ratio 104100
• Per Capita Income US440
• GDP Growth Rate 5.0
• Economic Growth Rate 6.5

3
Ownership Structure

• Three kinds of ownership
• Private ownership
• Collective ownership
• State ownership
• Concept of corporate entities is very new
• Family owned enterprises
• NGOs have significant contribution in economy of
  Bangladesh

4
Basic statistics

• Market capitalization USD 3.8 billion, 6.8 of
  GDP
• 277 securities listed in DSE
• 198 securities listed in CSE
• 44 state owned corporation controlling about 200
  subsidiaries 60 privatized till 2005
• 49 banks and 28 non banking financial
  institutions
• 37 general insurance companies 14 life
  insurance companies
• 3000 NGOs receiving foreign funding

5
Awareness about CG

• Scenario in 2002
• Awareness was low
• Misconception that CG only applies to the
  developed world
• Some considered to be a passing fad
• Listed companies believed that it poses and
  additional burden of regulations
• Banks considered separation of ownership and
  management unacceptable

6
Regulatory Framework of CG

• The legal framework
• Companies Act 1994
• Banking Companies Act 1993
• Non-Banking Financial Institution Act
• Bangladesh Bank Order 1972
• Securities and Exchange Commission Act 1993
• Securities and Exchange Ordinance 1969
• Rules and regulations issued by regulators
• Accounting and auditing principles and guidelines
  issued by professional bodies
• Enforcement of laws and regulations
• Judicial system
• regulators

7
Major Initiatives

• Comparative Analysis of CG in South Asia
  Charting a Roadmap for Bangladesh- study by BEI
• Bangladesh Bank directives on CG
• National Taskforce on CG
• Code of Corporate Governance for Bangladesh
• SEC Guidelines on CG
• ICAB adopting 32 IAS, 4 more under review

8
Programmes on International/Multilateral Bodies

• World Bank/IMF
• Reform of the Bangladesh Bank
• Structural Reform
• Asian Development Bak
• Reform of the SEC
• Capacity building to strengthen the regulatory
  and supervisory capacity
• Improve governance of market intermediaries

9
Programmes on International/Multilateral Bodies
cont..

• DFID/GCGF and Commonwealth Secretariat
• Supported BEIs research effort
• Supported the development of the Code
• Royal Netherlands Embassy Dhaka
• Capacity building of constituencies
• Advocacy on CG
• Expanding NGO Governance Principles
• Feasibility of Institute of CG in Bangladesh
• Monitoring impact of training

10
Programmes on International/Multilateral Bodies
cont..

• GCGF
• Provided resource persons
• Training of Trainers
• SouthAsia Enterprise Development Facility
• Bangladesh Bank Training Programme
• Core risk management guidelines and training

11
Key Gaps

• Directors fail in their oversight function
• Regulators lack competent professionals
• Ownership policy absent for SOEs

12
Way Forward

• Coordination among regulators
• Capacity Building
• Ownership policy for SOEs
• Donor Coordination