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Vol
4: Issue No.10 : October, 2004 |
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| Hony.
Editor |
| Dr.
Bindi Mehta
Professor
& Chairperson (Research & Publications)
Narsee Monjee Institute of Management Studies
(Deemed University) |
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Corporate
governance code vital to cutting corruption -
Speakers observe at BEI-Junior Chamber seminar |
Speakers
at seminar called for formulating a national corporate governance
code to bring in transparency and reduce corruption in corporate
sector.
They said the comprehensive code should cover private sector
as well as state-owned enterprises and non-governmental
organisations.
"Corporate governance ensures ethical business practices
helping to cut corruption in society," Junior Chamber
International (JCI) President Fernando Sanchez-Arias said
speaking at the seminar on corporate governance.
Bangladesh Enterprise Institute (BEI), a local think tank,
and Junior Chamber International (JCI) Bangladesh, local
chapter of JCI, a federation of world's young leaders and
entrepreneurs, organised the seminar.
The discussants said many of the companies are family-run
which maintain little corporate practices. The directorship
in many companies is still an honorary position, they said
calling for developing professionalism in directorship.
Lack of corporate governance in listed companies hinders
smooth growth of country's capital market and erodes investors'
confidence, they observed.
The JCI president said, "For implementation of corporate
governance, the government and private sector need to work
together. Corporate governance and corporate social responsibility
are so important because they benefit the society as a whole."
The company management and employees should be given extensive
training and education to practise corporate code, he suggested.
Moderating the seminar, BEI President Farooq Sobhan said
government cannot force companies to practise corporate
governance, but regulators like Securities and Exchange
Commission and Bangladesh Bank can play role in this regard.
International Chamber of Commerce-Bangladesh President Mahbubur
Rahman said corporate governance in companies in a country
depends on how the country is governed.
The country should practise good governance and companies
inside it international standard corporate governance, he
suggested.
Anne Marshal, charge d'affaires of European Commission delegation
in Bangladesh, said corporate code should also cover labour
standards, working environment, workers' right, consumer
rights and compliance with other international conventions.
Chief Financial Officer of Siemens Bangladesh Christian
Laufer said it is hard to practise corporate governance
but it shoull be practised as it benefits not only the particular
company and its employee but also the country.
"What the companies need is change of mindset to adopt
corporate governance," he said.
American Chamber of Commerce in Bangladesh President Aftab-ul
Islam said corporate governance code should cover other
issues like intellectual property rights.
Foreign Investors' Chamber of Commerce and Industry President
Mahbub Jamil said many multinationals and local companies
are practising corporate governance in Bangladesh and this
should be projected properly.
Wendy Werner, corporate governance working group member
of BEI, Data Magfur, JCI National President, Syed Almas
Kabir, former national president of JCI Bangladesh and Rumi
Saifullah, JCI national executive vice-president, also spoke.
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| PeopleSoft
and Deloitte Launch New Service to Address Corporate Governance |
PeopleSoft
Inc. recently introduced Governance Jumpstart, a combination
of software and services that will enable organizations to
more effectively address evolving regulatory and compliance
requirements. The new service combines Deloitte's expertise
in risk management and internal controls with PeopleSoft's
experience in applying best practices to automate financial
processes for compliance. Governance Jumpstart addresses IFRS,
Sarbanes-Oxley and Basel II regulations for compliance and
will initially be offered in the United Kingdom.
Governance Jumpstart provides organizations with a compliance
benchmarking analysis from Deloitte and PeopleSoft. The benchmark
analysis will assess an organization's compliance systems
and processes currently in place, and provide recommendations
to improve business processes and the supporting IT infrastructure.
"Over the next two years companies will face a dramatic
increase in the volume of regulatory reporting," said
Jeffrey Mann, vice president at META Group, a leading provider
of IT research, advisory services and strategic consulting.
"European organizations should be working now to develop
robust, stable, and auditable IT environments to avoid a frantic,
wasteful scramble to meet deadlines."
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| Directors’
pay: European Commission recommendations |
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The European Commission adopted two Recommendations
relating respectively to directors’ pay and the role of independent
directors. Neither will be binding on Member States, but both
seek to converge practices within Europe.
The Recommendations form part of the Commission’s Company Law
Action Plan, adopted in May 2003, which aims to promote the
creation of a dynamic and flexible corporate governance framework
within the EU.
The Action Plan contains a set of initiatives aimed at strengthening
shareholders' rights, reinforcing protection for employees and
creditors, increasing the efficiency and competitiveness of
European business and boosting confidence on capital markets.
Public consultation on the Action Plan as a whole, which ended
in mid-September 2003, revealed consensus behind its main measures.
The Commission then committed itself to further open consultation
on each of the key measures, as a result of which the Commission
has now issued the two Recommendations.
Director’s Pay
According to the Commission, this Recommendation takes due account
of efforts already made by several Member States, including
the UK, and aims to foster these developments by identifying
best practices to ensure greater convergence in the EU.
The Commission recommends that Member States ensure that listed
companies disclose their policy on directors’ remuneration and
tell shareholders how much individual directors are earning
and in what form. It invites Member States to adopt measures
in four areas i.e. Remuneration Policy, Shareholders' Meeting,
Disclosure of the remuneration of individual directors, and
Approval of share and share option schemes.
Majority of audit committees, 83 % now perform self-evaluations,
compared with 17 % in the earlier study. In other changes, 90
% of companies now have board evaluation policies, as compared
to 35 % in 2002. Director training is being provided by 80 %
of companies compared with 14 % in the earlier study.
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