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Commerce Minister at the ICSB National Award

‘Not dependent on good governance law in corporate sector’

01 Dec, 2017 15:30:00

Commerce Minister Tofail Ahmed said the existing Company Law has to be changed and his ministry would continue to work with the relevant stakeholders to get the new Company Act soon.

The minister said this while addressing the ‘4th National Award for Corporate Governance Excellence 2016’ of the Institute of Chartered Secretaries of Bangladesh (ICSB) as chief guest.

The program was held on Thursday night at the Celebrity Hall of Bangabandhu International Conference Center (BICC), Sher-e-Bangla Nagar, Dhaka while a team led by former advisor to the caretaker government A B Mirza Azizul Islam selected the winning companies through rigid scrutiny.

Twenty Two companies, listed with the Stock Exchanges of Bangladesh who published its annual report for the year ended June 30, 2016 or December 31, 2016 as applicable, were awarded in 8 different categories for their outstanding performance to encourage and promote governing excellence in the corporate sector of Bangladesh at the program.

The awarded companies based on eight categories and three positions (first, second and third) are as follows:

Banking Companies: First (Golden) -Prime Bank Limited, Second (Silver) - Southeast Bank Limited, Third (Bronze) - Eastern Bank Limited; 

None-Banking Financial Institutions: First (Golden) -IDLC Finance Ltd., Second (Silver) - International Leasing and Financial Services Limited, Third (Bronze) - Union Capital Limited;

InsuranceCompanies: First (Golden) -Green Delta Insurance Company Ltd., Second (Silver) - Prime Insurance Company Limited, Third (Bronze) - Phoenix Insurance Company Ltd.;

Pharmaceutical, Food and Allied Companies: First (Golden) -The IBN SINA Pharmaceutical Industry Ltd., Second (Silver) - Golden Harvest Agro Industries Limited, Third (Bronze) - Square Pharmaceuticals Ltd.;

Textiles and RMG Companies: First (Golden) -Envoy Textiles Limited, Second (Silver) - Shasha Denims Limited, Third (Bronze) - Square Textiles Limited;

IT, Telecom & Services Companies: First (Golden) -Grameenphone Ltd., Second (Silver) - Eastern Housing Limited;

Engineering, Fuel & Power Companies: First (Golden) -MJL Bangladesh Limited, Second (Silver) - Singer Bangladesh Limited;

Manufacturing & Chemicals Companies: First (Golden) -RAK Ceramics Bangladesh Ltd., Second (Silver) - British American Tobacco Bangladesh Company Ltd.; Third (Bronze) - Heidelberg Cement Bangladesh Ltd.

However, commerce minister assured that despite some budget limitations of the government the Commerce Ministry would work for the new law as per the demand of this sector.

For the betterment of the sector the minister, however, emphasized on good governance and self-discipline within the companies. 

“Sound and effective corporate governance cannot rely solely on the legislative framework, but rather requires self-discipline and the proper execution of duties by directors, checks and balances and the promotion of a clean corporate culture”, he said.

Pointing to some loopholes of the existing companies the Minister said, too often there is excessive delegation in the company’s internal control and risk management functions to staff, specifically to legal, compliance, and internal audit personnel, all the while paying little attention to directorial responsibility.

He urged all directors and executive bodies to watch over business operations while taking up the responsibility of corporate governance. 

“Companies should refrain from taking a boilerplate or check-box approach for complying with corporate governance standards”, the minister said.

He suggested that rather than asking “is this legal?” you should rephrase the question and ask yourself “is thistheright thing to do?”

The minister said, good corporate governance doesn’t just keep your company out of trouble. In the long term, it pays off by attracting investors, lowering borrowing costs and leading to potential credit rating upgrades. Ultimately, it helps improve share-price performance of your company.

The commerce minister praised the contribution of ICSB as a pre-eminent institution for promotion and practice of good corporate governance and said, “I am happy to learn that ICSB is leading with key measures to promote and facilitate good governance in the corporate sector of Bangladesh in line with global best practices.”

Meanwhile, the commerce secretary Shubhashish Bose also informed that the government was actively considering revising the Company’s Act while addressing the ICSB award giving ceremony as special guest.

“In this process, valuable opinions given by ICSB and other stakeholders will be given due importance”, the commerce secretary said.

Terming the award giving initiative of ICSB as positive the commerce secretary said that this event was creating awareness about good governance, transparency and accountability in corporate management. 

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