Corporate Governance Practices in the Banking and Finance Sector: Perspectives from Bangladesh

Abstract

Corporate Governance has become one of the most important strategic tools for enterprises and organizations to increase both stakeholders' value and a firm's performance. It ensures the accountability and responsibility of the directors, managers and others who hold key positions of responsibility. It is based on a set of rules and principles, processes and mechanisms by which the affairs of the corporations and firms are directed, managed and controlled. Over the past thirty years the concept of corporate governance has received substantial attention from regulatory bodies, scholars and practitioners worldwide as it has been viewed as one of the most important tools for the progress and prosperity of corporations. However, the concept is still in its infancy in Bangladesh and thus is not as well established and commonplace as it might be elsewhere.The main purpose of this study is to understand the nature of corporate governance, its importance, need and its practices in Bangladesh within the Banking and Finance sector. The study is mainly based on secondary sources of data and information that includes scholarly journal articles, books, the Corporate Governance Act of Bangladesh 2004, and other relevant sources pertaining to the subject.A wide range of factors, including codes of corporate governance, legal and regulatory frameworks, development of the capacity of boards of directors, introduction of good governance and institutional capacity building have been recommended to institutionalize and improve corporate governance in Bangladesh. Issues such as whistleblowing and the efficacy of Bangladesh's Legal system are germane to discussions within the ambit of this research.