Governance issues are of consequence everywhere
FE Report | Saturday, 5 March 2011
FE Report
Governor of Bangladesh Bank (BB) Dr Atiur Rahman said Thursday governance issues were of concern not to the developing economies alone. Governance lapses and weaknesses in large financial institutions of the advanced markets also figured in significantly as factors responsible for precipitating the recent global financial meltdown, he added. The BB governor noted the standards of corporate governance practices are being reviewed through expert-level consultations in global forums, alongside reviews of standards about accounting, regulation and supervision. He made these comment as the chief guest at the launching ceremony of the Financial Market Recovery Project (GCGF). The Global Corporate Governance Forum (GCGF) of International Finance Corporation (IFC) organised the event. President of the Bangladesh Enterprise Institute (BEI) Farooq Sobhan presided over it. Dr. Atiur Rahman said the focus on reviews of corporate governance standards is based on strengthening safeguards against directors and the senior management personnel, pursuing short-term gains at the cost of longer-term institutional viability and soundness. The governor said the global financial crises showed once again how dereliction of duties relating to risk appraisal and risk management could imperil the very existence of financial institutions. "Our local banks in general are in a state of good health, but you are aware of the recent market events that laid the stresses caused in a few smaller banks by aggressive forays for quick gains in investment made without applying due diligence about assessing the underlying risks" he told the audience at the function. He said the BB will continue its unrelenting efforts for enforcing necessary credit discipline. Boards and senior management of the banks must get their act together in shoring up corporate governance, shunning the habit of lobbying for waivers and exemptions from the regulatory discipline, she observed. He added corporate governance practices prevailing in Bangladesh are yet not up to the international best standards on some important counts like adequate transparency and safeguarding the interests of the minority stakeholders. "Our corporates with aspirations for cross border expansion and capital issues in international markets will need to measure up rapidly in their governance practices," the governor said. He said the initiative for training of trainers will help directors of banks to better understand their roles and responsibilities and motivate them to be pro-active change-agents. This is a timely, welcome step, he felt. Securities and Exchange Commission (SEC) chairman Ziaul Haque Khondker, chairman of Bangladesh Association of Banks (BAB) Nazrul Islam Mazumder, Head of IFC Mr Ian Crosby and GCGF consultant Dr Mary Jo Larson, among others, addressed the inaugural function.
Governor of Bangladesh Bank (BB) Dr Atiur Rahman said Thursday governance issues were of concern not to the developing economies alone. Governance lapses and weaknesses in large financial institutions of the advanced markets also figured in significantly as factors responsible for precipitating the recent global financial meltdown, he added. The BB governor noted the standards of corporate governance practices are being reviewed through expert-level consultations in global forums, alongside reviews of standards about accounting, regulation and supervision. He made these comment as the chief guest at the launching ceremony of the Financial Market Recovery Project (GCGF). The Global Corporate Governance Forum (GCGF) of International Finance Corporation (IFC) organised the event. President of the Bangladesh Enterprise Institute (BEI) Farooq Sobhan presided over it. Dr. Atiur Rahman said the focus on reviews of corporate governance standards is based on strengthening safeguards against directors and the senior management personnel, pursuing short-term gains at the cost of longer-term institutional viability and soundness. The governor said the global financial crises showed once again how dereliction of duties relating to risk appraisal and risk management could imperil the very existence of financial institutions. "Our local banks in general are in a state of good health, but you are aware of the recent market events that laid the stresses caused in a few smaller banks by aggressive forays for quick gains in investment made without applying due diligence about assessing the underlying risks" he told the audience at the function. He said the BB will continue its unrelenting efforts for enforcing necessary credit discipline. Boards and senior management of the banks must get their act together in shoring up corporate governance, shunning the habit of lobbying for waivers and exemptions from the regulatory discipline, she observed. He added corporate governance practices prevailing in Bangladesh are yet not up to the international best standards on some important counts like adequate transparency and safeguarding the interests of the minority stakeholders. "Our corporates with aspirations for cross border expansion and capital issues in international markets will need to measure up rapidly in their governance practices," the governor said. He said the initiative for training of trainers will help directors of banks to better understand their roles and responsibilities and motivate them to be pro-active change-agents. This is a timely, welcome step, he felt. Securities and Exchange Commission (SEC) chairman Ziaul Haque Khondker, chairman of Bangladesh Association of Banks (BAB) Nazrul Islam Mazumder, Head of IFC Mr Ian Crosby and GCGF consultant Dr Mary Jo Larson, among others, addressed the inaugural function.