Lack of adequate incentives is an obstacle to wider application of corporate governance in the country, Finance and Planning Adviser Mirza Azizul Islam said yesterday.
However, the Bangladesh Bank (BB) and other regulators are making efforts to encourage the practice here, added the adviser.
His comments came at the inaugural function of Corporate Governance Week 2008, organised by the Bangladesh Enterprise Institute (BEI), in Dhaka.
Entrepreneurs are reluctant to practise corporate governance now since it involves costs for implementation, but the practice will definitely benefit corporate bodies in the long run, Azizul said without elaborating.
Bangladesh Bank Governor Salehuddin Ahmed said the BB has taken initiatives to ensure corporate governance practices in banking and financial sectors.
"We have made credit rating mandatory for all banks," he added.
Micro-credit Regulatory Authority (MRA) is going to frame a set of norms for micro-finance institutions to ensure governance practices, said the BB governor, who is also the chairman of the MRA.
Faruq Ahmad Siddiqi, chairman of the Securities and Exchange Commission that has introduced corporate governance guidelines for listed companies, said the SEC is getting good responses from companies.
Faruq Ahmad also said the practice of corporate governance is relatively a new phenomenon in Bangladesh where corporate entities are dominated mostly by family ownerships.
Farooq Sobhan, president of BEI, said the BEI has initiated a project with the support of the Netherlands embassy in Dhaka to raise awareness and set standards of corporate governance in Bangladesh.
The theme of the corporate governance week is ‘Corporate Governance for Growth, Development and Sustainability’.
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