Corporate Governance Structure

General Meeting of Shareholders

Board of Corporate Board of Internal Control Internal Control

Auditors Directors Committee Department

Compensating and
Auditors Office
Nominating Committee

Third Party
Advisory Board
Oversight

Independent
auditor
Outside attorney

Internal Audit Executive Investment Committee

Department Management Meeting

Information Disclosure
Committee
 Corporate Governance System
General Shareholders Meeting

Selection and
Selection and Selection and
Dismissal
Dismissal Dismissal
Report
Accounting
Board of Directors
Auditors
Audit Auditors Report

Selection,
Dismissal Report
Audit Audit
and Audit
Selection
and
Dismissal Representative
Directors

Instruct Report Instruct Report Report

Internal Audit Compliance

Executive Officers
Division Committee
Enlightenment
Instruct Audit Report and Education

Divisions and Group Companies

Practice of Corporate Governance in the Banking
Industry of Bangladesh
 Group: 2

Name ID
1. Abu Naser Md. Shakhawat 11-201
2. Mohammad Ferdaws 11-212
3. Sohanur Rahman Sumon 11-216
4. Mohammad Fakhrul Islam 11-233
5. Jadab Chandra Sarker 11-245
 Banks Surveyed

Southeast Bank Limited

Mutual Trust Bank Ltd.

Standard Bank Limited

Participants of Corporate Governance in Banks
Southeast Bank Limited
 Southeast Bank Limited
Legal Status Public Limited Company

Line of Business Banking

Date of Incorporation March 12, 1995

Authorized Capital Tk. 10,000 million / 2009.

Paid-Up Capital Tk. 3422.64 million / 2009.

Net Profit Tk. 1870.19 million / 2009.

Earning Per Share Tk. 54.64 / 2009

Total Assets Tk. 112,676.98 million / 2009.

Number of Shareholders 22,152

Number of Employees 1402

Number of Branches 56
Southeast Bank Limited

 Defining Corporate Governance

 CG versus CSR
 Southeast Bank Limited

 Defining Corporate Governance

 CG versus CSR
 Participants of CG:
Shareholder Regulatory Authorities
The Board of Directors Management
Customers Employees
 Southeast Bank Limited

 Defining Corporate Governance

 CG versus CSR
 Participants of CG:
Shareholder Regulatory Authorities
The Board of Directors Management
Customers Employees

 Committees of the Bank:

Executive Committee

Remuneration Committee

Appointment Committee

Audit committee

Risk Management Policy

 Southeast Bank Limited

Rights and Equitable Treatment of Shareholders

 Right to participate in fundamental change.

 Set an agenda by minor shareholders

 Vote in person or in absentia and an equal effect

 Agenda set by minority shareholders

 Minor Shareholders Participation

 Southeast Bank Limited

The Responsibility of the Board

 Chairman and Managing Director

Two-tier boards system

 Multiple board memberships

 Perform duties in an even handed manner

 Sufficient number of non-executive board members

 Remuneration and employment handled by special committee

 “Codes of Conduct” for board and executive

 Influence by major investors

 Southeast Bank Limited

Disclosure and Transparency

 “Share Division” to disseminate real time information

 Integrity of reporting system

 Disclosed remuneration policy

 Circular on popular Bengali and English newspaper

 Communication of illegal and unethical practices

Mutual Trust Bank Ltd.
 Mutual Trust Bank Ltd.

Board of directors

 Composition of board
 Delegation of power
 Appointment of directors
 Board nomination and election process
 Ethical standard and independent judgment
 Remuneration of directors
 Mutual Trust Bank Ltd.

Financial Reporting and Audit

 Financial reporting system

 Accounting standard
 Internal audit committee
 External auditor
 Mutual Trust Bank Ltd.

Relation to shareholders

 Communication with shareholders

 Treatment of shareholders
 Ownership right and voting power
 Participation in AGM
 Shareholders influence
 Mutual Trust Bank Ltd.
Title Compliance Status
Complied Not
complied
Board’s size: should not less than five and more than Yes
twenty
Independent directors: at lest 1/10 Yes
Separate chairman of board and CEO and clearly defined Yes
role & responsibilities
Fairness of financial statement Yes
Compliance with international accounting standard Yes
Soundness of internal control system Yes
Declaration of shareholding pattern and dividend Yes
Constitution of audit committee with board members Yes
including the independent director.
External/statutory auditors Yes

Participation if shareholders in AGM Yes

Standard Bank Limited
 Standard Bank Limited

The relationship which stands in between the participants

and the firm’s performance to the common goal of business

Do they really mean it?

 Standard Bank Limited
Shareholders participate in fundamental corporate changes
Neutral
Board performs the duties in an even-handed manner
Neutral
Board has sufficient number of non-executive board members
Neutral
Major investors influence in company matter
Neutral
Board is honest about corporations accounting system
Agree but not strongly agree
Shareholders can freely communicate their concern
Agree but not strongly agree
The disclosed information are very much correct
Agree but not strongly agree
 Standard Bank Limited

The organization discloses the

remuneration policy for board Yes
members & key executives

The organization has codes of

Yes
conduct for the board and the key
executives

The internal auditor working

Yes
independently

The shareholders are informed timely Yes

 Standard Bank Limited

Findings

Shareholders usually do not take Major investors sometimes

part in fundamental corporate influence on the company matter
changes

The bank is somewhat efficient Vagueness arises about the

regarding the disclosure and integrity of the accounting and
transparency financial reporting system

The bank does not really mean what it says about corporate governance
 Comparison among the Three Banks
Criteria Southeast Mutual Standard
Bank Ltd. Trust Bank Ltd.
Bank Ltd.
Shareholders right to participate in fundamental 1 0 0
corporate changes

Perform their duties in an even-handed manner to all 2 2 0

shareholders
How efficient in maintaining the integrity of the 2 2 1
accounting system
Sufficient non-executive board members 2 2 0
How much the disclosed information is correct 2 2 1
Major investors are influencing 1 1 0
Total Score 10 9 2
Desired Score 12 12 12
 Recommendations

The law should permit shareholders to set an agenda for AGM or

EGM.

The remuneration policy should be handled by the independent

directors.

The remuneration committee of the bank should work on a

permanent basis.

The board of directors of the company should not hold majority of

the share.

The laws and regulations of the country should be encouraging for

practicing corporate governance.
Questions?
Thank you