News

Roll out BSEC corporate governance rules in phases
01 Oct 2026
Source: The Daily Star

Stakeholders have called for a phased and practical rollout of the proposed Bangladesh Securities and Exchange Commission (BSEC) Corporate Governance Rules 2026, saying stricter requirements could be difficult for companies to implement without adequate preparation and institutional capacity.

The call came at a roundtable titled “Strengthening Corporate Governance in Bangladesh”, organised by SMAC Advisory Services Ltd in Dhaka on Tuesday evening.

Hossain Sadat, a BSEC commissioner, attended the event as the guest of honour, alongside regulators, company representatives, professional bodies, academics and journalists.

Participants reviewed the draft Corporate Governance Framework 2026, stressing that it should go beyond formal compliance to ensure effective oversight by boards and their committees.

Zareen Mahmud Hosein, chairman of SMAC Advisory Services, compared the proposed rules with governance practices in other regional markets.

Participants reviewed the draft Corporate Governance Framework 2026, stressing that it should go beyond formal compliance to ensure effective oversight by boards and their committees

The draft introduces reporting requirements covering environmental compliance, corporate social responsibility (CSR) policies, and CSR budgets and spending.

Zareen recommended adopting a common international framework for sustainability reporting to avoid overlapping requirements. She also questioned whether companies, consultants and auditors were adequately prepared for the new rules and who would verify or certify environmental, social and governance (ESG) disclosures.

“Phased implementation is necessary,” she said, calling for clearer definitions and valuation requirements for related-party transactions, proportionate risk oversight and a roadmap for sustainability disclosures aligned with international standards.

Independent directors emerged as a major implementation concern. Under the draft, the maximum number of listed companies on whose boards an independent director can serve would be reduced from five to three.

The minimum general experience requirement would rise from 10 to 12 years, while independent directors would have to make up at least one-third of a board or three directors, whichever is higher.

The draft would also extend the cooling-off period for former executives from two to three years and introduce mandatory training for independent directors.

However, Zareen cautioned that increasing the number of independent directors would not automatically ensure genuine independence. She called for transparent nomination processes, disclosure of those proposing candidates and clear evidence that nominees meet independence criteria.

Snehasish Barua, managing director of SMAC Advisory Services Ltd, also emphasised the role of independent directors.

“Ensuring the independence, accountability and transparency of independent directors is one of the primary foundations of institutional good governance, stakeholder trust and long-term value creation,” he said.

Prof Melita Mehjabeen of the Institute of Business Administration stressed that boards should balance their oversight responsibilities with each organisation’s structure and circumstances.

M Nurul Alam, president of the Institute of Internal Auditors Bangladesh, highlighted the importance of directors’ professional knowledge and understanding of operational needs, alongside transparency and accountability.

In his closing remarks, BSEC Commissioner Hossain Sadat said the commission would consider stakeholder feedback and the long-term implications of policy decisions in developing a framework that protects investors and supports investment.

He underscored the importance of transparency and safeguarding investor rights, even amid resource constraints, adding that the commission aimed to formulate an investment-friendly corporate governance framework within this year, taking into account the interests of domestic and foreign investors.

The BSEC first issued corporate governance guidelines in 2006 and revised them as the Corporate Governance Code on June 3, 2018.

The code requires listed companies to comply with provisions on board composition, the appointment of independent directors, directors’ reports to shareholders, audit and remuneration committees, and corporate websites.

Earlier this year, the commission published the draft Bangladesh Securities and Exchange Commission (Corporate Governance) Rules 2026 for stakeholder feedback.

 
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