The SEC should create a CSR index of the corporates are created and disseminated in the market.
It would help increase the investment environment in Bangladesh. It will create an incentive for the business houses to implement good corporate governance
"SEC becomes financially self-reliant for first time" - it was a headline of a news item in todays newspapers. A good news.
SEC should consider to introduce something similar to
Corporate Governance Quotient (see below for details) to ensure that market is benefited from an increasing governance structure. It can consider inviting the
RiskMetrics Group to implement this CGQ. SEC can also include AIMS, BEI and other market players in implementing this.
We are adding few more news item following this article which highlights the same issue.
If you thought some of the ideas are worth of your reading time, please forward it to others. If you have an ear to the columinsts in regular traditional media, please forward it to them. If you have an ear to the journalists and news editors of the electronic media, discuss it with them. Hope they would look at the suggestions and give due diligence.
Also, if you thought the article was important enough so it should come under attention of the head of the government please forward the message to them.
Email address for the Chief Advisor:
feeedback@pmo. gov.bd (please let us know if you think its not correct address)
or at
http://www.cao. gov.bd/feedback/ comments. php Thanks for your time,
Innovation Line
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Note: This is a freelance column, published mainly in different internet based forums. This column is open for contribution by the members of new generation, sometimes referred to as Gen 71. If you identify yourself as someone from that age-group and want to contribute to this column, please feel free to contact. Thanks to the group moderator for publishing the article.
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Corporate Governance Quotient (CGQ®)
Source: http://help. yahoo.com/ l/us /yahoo/finance/ tools/forms /research-57. html/
Corporate Governance Quotient (CGQ®), a corporate governance rating system provided by Institutional Shareholder Services (ISS) on over 8,000 companies worldwide, evaluates the strengths, deficiencies, and risks of a company's corporate governance practices and board of directors.
CGQ uses a comprehensive set of objectives and consistently applied criteria for each of the companies rated. The database features corporate governance rankings on more than 8,000 companies worldwide, and includes underlying data points for up to 63 corporate governance variables, categorized under four areas of focus: 1) board of directors, 2) audit, 3) anti-takeover provisions, 4) executive and director compensation. Some of the variables are reviewed together under the premise that corporate governance is enhanced when selected combinations of these variables are adopted. To facilitate analytical comparison, each company is scored individually, relative to its market index and its industry group.
The data provided in CGQ is derived primarily from public disclosure documents, press releases and corporate websites. It then goes through a rigorous verification process by ISS' senior corporate governance analysts and is put in to the CGQ database.
Two CGQ ratings are generated on each company. Each company's CGQ is compared with other companies in the same index and industry group.
All scores are relative (percentile basis):
- CGQ Index Score: Compare to relevant market index including: S&P 500, Mid-Cap 400, Small-Cap 600, Russell 3000, ISS Small-Cap, S&P/TSX
- CGQ Industry Score: Compare to industry peer group using 24 Standard S&P "GICS" groups
Users can access CGQ data on Yahoo! Finance's Company Profile pages.
SEC becomes financially self-reliant for first time
Sarwar A Chowdhury
The Securities and Exchange Commission (SEC) has become financially self-dependent for the first time, thanks to fee imposed on beneficiary owners (BO) account.
During the first six months [July-December] of the current fiscal year, the stock market regulator has already generated Tk 7 crore in income that is Tk 1.5 crore higher than the budget allocation from the government for the fiscal year 2007-08.
The total budget allocation for this fiscal has been fixed at Tk 5.5 crore by the government.
"Since our journey in 1993, we have a vision of becoming financially self-reliant and now we achieve the target," said Farhad Ahmed, executive director of SEC.
"We do not want to be a burden on the government exchequer," he said.
The commission is already using its revenue for its yearly expenditure and taking only the required amount from the government, he said.
Of the Tk 7 crore income, Tk 5 crore was received from BO account fee, which was imposed by the SEC in August last year. The SEC introduce the annual maintenance fee of Tk 300 on each BO account in a bid to stop fake or shadow BO accounts by using other person's information.
Of the Tk 300, the SEC gets Tk 50,while a depository participant get Tk 100 and Central Depository Bangladesh Ltd Tk 150.
BO account is like a bank account, where customer will deposit their scripless securities. While bank account contains money, BO account contains securities, or shares.
The rest Tk 2 crore was received from other income generating sources including initial public offering (IPO) consent fees, registration fees and penalties.
The increased revenue indicates that the SEC does not need to depend on government's budgetary allocation.
In 2004-05, the total expenditure was Tk 3.16 crore of which 56.18 percent was used from the commission's revenue, he said, adding that in 2005-06, of the total expenditure of Tk 4 crore, Tk 3.17 crore, or 78.27 percent, was used from the SEC's revenue.
In 2006-07, the commission's total expenditure was Tk 4.17 crore and of the amount Tk 3.36 crore was used from its revenue fund, he said.
BEI seminar on corporate governance
Source: http://thedailystar .net/story .php?nid=19323
A seminar on corporate governance for board members and management of financial institutions was held at Bangladesh Enterprise Institute (BEI) in Dhaka yesterday.
Murshid Kuli Khan, deputy governor of Bangladesh Bank, inaugurated the seminar as chief guest, while Farooq Sobhan, president of BEI, presided over the meeting, says a press release.
"Bad governance practices will weaken the financial system's ability to lower the risk of financial fraud," Khan said.
YRK Reddi and Padma Kumar from India were resource persons at the seminar.
Lack of incentives obstacle to wider application of corporate governance
Finance adviser tells opening of Corporate Governance Week
Star Business Report
Source: http://thedailystar .net/story .php?nid=19152
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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Deep condolence for the Sadr victims. May Almighty give the family members of victims enough strength to recover from this great loss soon. Let us extend our hand to them the way we can.
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