Make corporate governance code mandatory for all: experts
Every public and private entity should follow the corporate governance code to protect stakeholders' interest as part of ensuring sustainable growth of the companies, audit experts said.
The code was made mandatory for listed companies, but non-listed ones should also follow the guideline to bring transparency in auditing and accounting activities, Comptroller and Auditor General of Bangladesh Mohammad Muslim Chowdhury said.
He spoke at a seminar titled “Corporate governance code issued by the BSEC” organised by the Institute of Internal Auditors Bangladesh (IIAB) at the Audit Bhaban in Dhaka on Tuesday. The Bangladesh Securities and Exchange Commission (BSEC) issued the corporate governance guideline in 2006, made it mandatory in 2013 and reissued it under the name “corporate governance code” on June 3, 2018.
The code should be made mandatory for non-listed companies too, Chowdhury said. The Financial Reporting Council can fix a parameter on the size of employee numbers, capital and turnover of a firm so that it can follow the code properly, he said.
The council is formed following the financial reporting act, which was originated in the US 20 years back. The council is now present in 51 countries.
“We should create an environment so that every firm feels inspired to follow the corporate governance code,” he added.
“Family governance is more powerful than corporate governance in our (Bangladeshi) companies,” said Swapan Kumar Bala, a commissioner of the BSEC.
“India has fixed some parameters following which the country compels non-listed big companies too to follow the corporate governance guideline.”
“Corporate governance is a qualitative thing, not quantitative. Everyone should keep the rules in their head for the sake of their own business,” Bala said.
If the internal auditors can play their role actively and independently, then it will be easier for a company to follow corporate governance, he said.
The internal auditors should have a unique character so that they can properly play their roles and the officials of their workplaces feel encouraged to willingly provide them with all necessary audit related information, Chowdhury said.
“Over 20,000 companies are running operations in Bangladesh. Only 305 of them are listed on the Dhaka Stock Exchange,” M Nurul Alam, secretary general of the IIAB, said at the seminar.
“So we should concentrate more on all the non-listed companies.”
K Atique-e-Rabbani, president of the IIAB, was also present.