BSEC to form panel of independent directors for listed companies

The securities regulator has decided to form a panel of independent directors who will be appointed in the boards of listed companies.

The Bangladesh Securities and Exchange Commission (BSEC) took the decision in last week to ensure the due role of independent directors for the overall interest of shareholders.

As per the corporate governance code (CGC), at least one-fifth board members of the listed companies will be independent.

After enactment of the relevant provision, the listed companies will have to appoint independent directors from the panel formed by the securities regulator.

Mohammad Saifur Rahman, a BSEC executive director, said the securities regulator will formulate a guideline to form the panel of independent directors.

"The guideline, which will include the qualification of independent directors, will be formulated after reopening the office," Mr. Rahman said.

He said the panel of independent directors will be like the panel of auditors earlier formed by the BSEC.

A few years ago, the securities regulator formed auditors' panel which is revised time to time.

The listed companies appoint their auditors from the BSEC's panel.

"The panel of independent directors will also be revised time to time in line with the criteria mentioned in the guideline," Rahman said.

He said the criteria of independent directors have been mentioned in corporate governance code which is mandatory for the listed companies.

"The criteria of independent directors will be specified further in the guideline of forming the panel of independent directors," said BSEC executive director Mr. Rahman.

Asked about the benefit of listed companies, Mr. Rahman said the panel will ease the listed companies' job of appointing independent directors avoiding controversy.

As per the corporate governance code, total board members of a listed company shall not be less than five and more than 20, and at least one-fifth of the directors will be independent.

And an independent director of a company is a director who either does not hold any share or hold less than 1.0 per cent shares of total paid-up shares of the company.

Presently, there are 321 companies listed on the stock exchanges.

Sometimes, there were criticisms regarding appointing such type of independent directors who fail to play due role for the interest of shareholders.

Different seminars were also held on the role of independent directors.

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