The stock market watchdog has decided to make a list of facilitators to help organise annual general meetings (AGM) and extraordinary general meetings (EGMs) with transparency -- offline and online.
Publicly-listed companies in the country are required to conduct AGMs and EGMs both virtually and in-person since 2021 after the outbreak of Covid to ensure that general shareholders can participate in them even remotely and express their opinions.
However, sometimes the board members of companies hire people who participate in meetings to serve the interest of the board. The practice discourages general investors from exercising their voting rights in those meetings.
Against this backdrop, the Bangladesh Securities and Exchange Commission (BSEC) comes forward to ensure transparency in the voting process.
In the hybrid system, issuer companies need to appoint a software vendor identified as independent service provider (ISP) to build digital infrastructure for online voting and broadcasting of the meetings.
The BSEC wants business entities to select the service provider from a panel of ISPs.
The securities regulator will also make a list of independent scrutinisers, agencies that authenticate the election process and give a report to the Commission within 48 hours after the meetings.
"This is a good decision. This will ensure conformity with professional standards. The service providers will also be accountable and meetings more transparent," said Shahidul Islam, chief executive officer of VIPB Asset Management.
The BSEC in a letter issued on Monday ordered the Institute of Chartered Accountant Bangladesh (ICAB), the Institute of Cost and Management of Bangladesh (ICMAB) and the Institute of Chartered Secretaries of Bangladesh (ICSB) to inform their members of the regulatory move so that they apply to get included in the panels.
"The Commission has taken the move to protect the interest of investors," said BSEC spokesperson Mohammad Rezaul Karim.
"It is also a step forward to making smart Bangladesh," he added.
In Bangladesh, AGMs are often ineffective, meaning general shareholders fail to get their voices heard in situations deliberately turned chaotic so that companies can do what they have already decided.
The hybrid system began when social distancing made it impossible for investors to attend the meetings. Then the securities regulator made it mandatory to organise both offline and online meetings. That enabled general investors to vote from home and the BSEC to monitor the meetings.
Annual general meetings (AGMs) are important for making management of a company accountable and answerable to investors. But vested groups have found a way to skirt around the obligations and influence outcome of the meetings.
The latest measure is expected to seal the loophole.
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