1.1 Origin of the Report
This report is an Internship Report prepared as a requirement for the completion of the BBA Program of the Independent University, Bangladesh (IUB). The primary goal of internship is to provide an on the job exposure to the student and an opportunity for translation of theoretical conceptions in real life situation. Students were placed in enterprises, organizations, research institutions as well as development projects. The program covers a period of 12 weeks of organizational attachment.
After the completion of required courses of academic BBA program and passing the comprehensive exam, I, Shafinaz placed in Citibank N.A., Bangladesh for the internship program under the guidance of my faculty advisor Associate Prof. Dr. Sarwar Uddin Ahmed. As a requirement for the completion of the program I needed to submit this report, which is “Corporate Governance in Banking Sector of Bangladesh”.
1.2 Background of the Report
Corporate governance is a system of structures and processes to direct and control organizations and companies. It is considered to be one of the most critical factors today in improving the overall business practices in the globalized world and in bringing in more value to shareholders and stakeholders. Most countries at present have introduced Codes and Principles of Corporate Governance into the regulatory framework by central bank and the stock exchange regulators. Corporate governance is important for companies and firms as it specifies the distribution of rights and responsibilities among company’s stakeholders (including shareowners, directors, and managers) and articulates the rules and procedures for making decisions on corporate affairs. Thus, corporate governance provides the structure for defining, implementing, and monitoring the goals and objectives of companies, and ensuring accountability to appropriate stakeholders. Special emphasis is being placed in recent years by regulators and other stakeholders, of Banks in Bangladesh, on strengthening the practices of corporate governance. This is because banks play a unique role as the life blood of any economy and therefore the stability of the sectors is critical to the economic development of a country.
1.3 Objectives of This Paper
The main objective of the study is to examine the current study if Corporate Governance in banking sector of Bangladesh and also to identify the general understanding of the corporate governance, commitment to ensure good corporate governance practices, board size & composition, audit committee, transparency and disclosure, accounting practices, training on corporate governance, opinion on ensuring good corporate governance practices, and the relationship between good corporate governance practices and company performance. This unique study will help all the relevant stakeholders’ in Bangladesh (i.e. regulatory bodies, private and public enterprises, NGOs, Media, Academics, researchers, think-tank, students, donor agencies, etc) to know the current level of CG practices of the Banks of Bangladesh.
In the first instance, extensive literary reviews indicated that corporate governance has been addressed, analyzed, and defined from various perspectives. In order to narrow it down the scope the study concentrated on only one sector i.e. banking sector of Bangladesh. After this, a series of discussions were held to identify the focus of the study within the context of Bangladesh. It was found that the key issues related to ensuring good governance in the corporate sector includes a) transparency to all stakeholders, b) accountability of the management and the board, c) fairness in the decision making, and d) responsibility of the management and the board . Ensuring these in a corporate culture requires following rules and regulations both in the spirit and in the practice. Based on the preliminary...