ICMAB’s Panel Discussion on Corporate Governance - The Role of  Independent Directors Flawed selection and inadequate compensation, among others are the barriers to reap benefit from the role of the independent directors The mandatory provision of the independent directors as introduced by the BSEC is an encouraging step towards good governance but in a transitional society like ours the independent directors are yet to come up with their due role. 


The mandatory provision of the independent directors as introduced by the BSEC is an encouraging step towards good governance but in a transitional society like ours the independent directors are yet to come up with their due role. This view was expressed in a recent panel discussion organized by ICMAB on the topic Corporate Governance: The role of the role of independence directors. Moderated by Mr Muzaffar Ahmed FCMA  as moderator,  some important personalities like  Mr. A. Matin Chowdhury, Managing Director, Malek Spinning Mills Ltd., Dr. Mahmood Osman Imam FCMA, Professor Department of Finance, University of Dhaka, Mr. Mamun Rashid,Vice-Chairman, BD Venture Ltd., Mr. M. Mohiuddin , member of the board of Directors of Chittagong stock Exchange  and Mr. Arif Khan FCMA, Commissioner, BSEC, took part in the discussion session. A large number of CFO, Company Secretaries took part as panel discussant

Mr. Matin Chowdhury who leads two listed companies opined that introduction of independent director is a welcome move but too much regulations is often a discouragement to the enlistment with the stock exchanges. Rather than introducing more and more stringent regulations for the few companies that has gone for public listing, SEC should look into why the vast majority of the big companies still prefer to remain outside SEC’s compliance network by opting not to be listed. BSEC should take step to bring the companies of the big business houses under the bourses rather than overburdening them with regulations, he opined.  
Mr. Mamun Rashid a renowned economic analyst said global investors will look into governance structure before making any investment. He is however, critical of the way the way the independent directors are selected and the extent of their true independence. The remuneration that is now given to the independent director is also in his view, is not at all adequate to attract truly contributing people in the board and encouraging them to play the role that is expected from them. 

Mr. M. Mohiuddin of CSE highlighted the traditional family domination in the company and the dysfunctional nature of the boards. He expressed skepticism about the role of independent directors in our family oriented business culture. He expressed the view that board members should be trained on the matters of governance.  He opined that the individual quality of the independent director is very critical in discharging the responsibilities expected from them. He was critical of the flawed process of selection of the independent directors by companies.

Mr. Osman Imam of Dhaka University who also leads an organization that promotes good corporate governance said that the current SEC regulation mentions the qualification required for an independent director as against the previous provision that specified the disqualifications only. He opined that inclusion of independent director as the chairman of the audit committee is a welcome initiative. He sharply criticized the current compensation given to an independent director. He opined that with such meager compensation expecting highly responsible performance from an independent director is over expectation.

Mr Arif Khan of BSEC said UK, India and other countries are experimenting alternative models for selection of independent directors. BSEC is also looking into making the selection process more transparent and accountable. He said even the developed countries have gone through multiple setbacks before they reached a certain stage. In Bangladesh the process has started and there is scope for further improvement. 

Mr, Mohammad Salim FCMA, President of ICMAB in his welcome speech emphasized the need for constructive debate on corporate governance regulations.  Establishment of good corporate governance, he said is perquisite for investment and growth and more specifically for the development of the capital market of the country.
Among others Mr. Jamal Ahmed Choudhury FCMA, Secretary of ICMAB spoke on the occasion.


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