Project proposal: Compliance status of the corporate governance codes by the listed firms in Bangladesh Research proposal

7/30/2019 Project proposal: Compliance status of the corporate governance codes by the listed firms in Bangladesh Researc

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Project proposal:

Compliance status of the corporate governance codes by the listed firms in Bangladesh

Table of Contents

Contents Page No

Executive Summary 2

Problem statement 2

Research objectives 3

Literature Review 3

Benefits of the study 4

Methodology 4

Data collection 5

Data Management 5Data Analysis 5

Work Plan 6

Budget 7

Limitations of the project 7

Appendix 8

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Executive Summary:Corporate governance means a framework which ensures the satisfaction or trade off of

every stakeholder group shareholders, employees, community, customers, government,

suppliers etc. The aforementioned stakeholders have different goals while they engage

with a corporation. Corporate Governance ensures that there is congruence of goals the

organizations goal is set considering the individual goal of every stakeholder. The goal

congruence leads the corporation to tradeoff among all stakeholder groups. By a good

corporate governance framework, an organization is administered and operated in a

transparent, accountable and responsible way. Thus, it helps the stakeholders to protect

their interest in a corporation and exercise their every right which they deserve.

But this concept does not have a long history in the corporate world of Bangladesh. Thisconcept is in a pre-matured stage in our corporate world. So, various regulatory

institutions like SEC, DSE, Bangladesh Bank and one private institution BEI are working

to formulate suitable codes of corporate governance. On 20th February, 2006 the

Securities and Exchange Commission introduced some conditions on Board of Directors,

Chief financial officer, Head of internal Audit, Audit committee, External/ Statutory

Auditors, Reporting the compliance in the directors report as comply or explain basis.

This research shall be conducted to find out the present compliance status of these codes

of corporate governance by the listed firms.

Problem statement:

The issue of corporate governance has been largely discussed, analyzed, propagated in

many ways by specialists, researchers, government bodies and also development partners.

In the existence of weak form of efficiency of financial market, the emergence of

corporate governance framework for the financial sector of Bangladesh has been well

acknowledged. Since information asymmetry, moral hazard these two major but

common problems of our financial sector is prevailing at large, ensuring corporate

governance has become more in light with the growth of the country.

This survey will provide an understanding of the corporate governance practices and

board effectiveness among different organizations in Bangladesh, and will show in which

aspects of corporate governance are considered to be most important by the organizations.

This study is also useful because it will provide critical information regarding the extent

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to which the firms in Bangladesh currently confirm to the principles of the codes of

Corporate Governance for the listed firms.

Research objectives:

The general objective of the proposed study is to know the compliance and practice status

of the Corporate Governance codes by the listed companies of Bangladesh. To achieve

this objective, the specific objectives are

1. To be familiar with the various codes of corporate governance imposed by various

technical institutions.

2. Understand the governance pattern of the organizations.

3. Examine the main problems faced by the firms for the implementation of the

codes of corporate governance.

4. Determine the awareness level regarding the code of corporate governance in the

management level.

5. Recommend measures to overcome the problem by the effected parties.

Literature Review:

Literature review is a precondition for an effective and efficient movement for any

research. Review of the relevant literature prompts and strengthens to assess approaches

to the problem and revise the plan accordingly. It will provide a fair chance of providing

credibility. I shall go through the book Incentives, control and development-governance

in private and public sector with special reference to Bangladesh by Dhiman Chowdhury

for better understanding the concept of Corporate Governance. Again the article

Corporate governance & listing by listed companies in Bangladesh by Md. Salim

Uddin, Draft code of corporate governance-Bangladesh by J U Ahmed, Corporate

governance: Bangladesh perspective by Mamtaz Uddin Ahmed and Md. Abu Yusuf and

a research topic on A comparative analysis of corporate governance in South Asia:

Charting a roadmap for Bangladesh by Bangladesh Enterprise Institute. I shall also try to

review the related articles published by SEC, Bangladesh Bank, DSE, CSE, ICMAB,

ICAB and BEI.

This review will help to focus on the shortcomings of the previous works, tools and

techniques used by them for research, weakness of their methodology and to reduceduplication of works.

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Benefits of the study:

Code of corporate governance has been introduced in the year 2006 by the Securities and

Exchange Commission of Bangladesh. But we do not know even now how the companies

are reacting to this new concept. This study will help us to understand the present

compliance status of the corporate governance codes by the firms in Bangladesh.

Besides, this study will make us familiar with various rules and regulations imposed by

the various regulatory bodies for better practice of this concept by the firms. This research

will also provide the opinions and suggestions by various private institutions like BEI

form their point of view.

At the end, this research will try to find out the major problems faced by the firms, their

suggestions and opinions. Beside this, this will also provide information about the role of

various agents related with the capital market.

Methodology:

In Dhaka Stock Exchange, total 288 companies were listed on 1st September, 2008 under

thirteen (13) categories. These categories are Banks, Investment, Engineering, Food and

Allied, Fuel and Power, Jute, Textiles, Pharmaceuticals and chemicals, Paper and

Packaging, Services, Miscellaneous, Insurance and Debentures.

My ultimate sampling units are these listed firms. As 10% of the listed firms, twenty nine

(29) firms will be selected from these using a systematic sampling procedure with a

random start. The annual reports and various publications of these selected firms shall be

examined for understanding the compliance status of the codes of corporate governance.

Beside this, representatives of various regulatory authorities like Securities and Exchange

Commission, Bangladesh Bank and Dhaka Stock Exchange should be interviewed for

their opinion about the topic. Along with, Bangladesh Enterprise Institute, one and only

private institution for such research topic, may be another source of data collection.

Data collection:

A structured questionnaire will be prepared for the shareholders and CEOs of the firms to

collect primary data related to the research topic. I shall also try to go through the various

publications, annual reports and internal reports produced by the firms annually and

semiannually. I shall also try to focus on the important rules and regulations imposed by

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the SEC, Company Act,1994, Banking Act, 1991, Bangladesh Bank and Bangladesh

Enterprise Institute for better understanding of the codes of Corporate Governance. I shall

also take interviews of the representatives of the DSE, SEC, Bangladesh Bank, BEI &

also the ICB, the only institutional investor in Bangladesh, for understanding their views

and opinions.

Data Management:

All questionnaires will be manually edited. After collecting the required data from the

primary and secondary sources, data will be computerized.

Data Analysis:

The collected data will be analyzed by personal computer following a planned analysis

strategy. This plan will largely follow the objectives of the survey. From the answer

papers of the questionnaire, the current status, codes of corporate governance, roles of

various regulatory bodies and problems of implementation should be identified. Annual

report and publications should be checked for finding the compliance status of the codes

of corporate governance during the projected year. I shall also try to find out the reasons

for non compliance of those codes and any new concept developed from the practical

experience of the corporate world.

Work Plan:A tentative time schedule displaying the major activities in shown below:

Activities Required weeks

1. Planning and preparatory work 1

2. Literature review 2

3. Preparation and finalization of the questionnaire 1

4. Field interviewing and collection of secondary data 25. Data editing, cleaning and entry 1

6. Data processing 1

7. Data analysis 1

8. Preparation of draft report for key result 2

9. Finalization of the report 1

There will of course overlaps of the activities listed above. In any event, the study will be

completed in Twelve (12) weeks.

A simple 12 week work plan is given in the following Grantt chart:Work plan Week

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Activities 1 2 3 4 5 6 7 8 9 1

0

1

1

12

Planning and preparatory work

Literature review

Preparation and finalization of

the questionnaire

Field interviewing and

collection of secondary data

Data editing, cleaning and

entry

Data processing

Data analysis

Preparation of draft report for

key result

Finalization of the report

Budget:Budgeted costs for performing the research have been determined on the basis

of the present market price of the items. Materiality and reliability have been ensured here

as much as possible.

Cost items Amount required (BDT)

A. Materials, supplies and computer service:

1. Questionnaire printing 300

2. Project proposal preparation and printing 200

2. Paper, pencil, pen and eraser 500

3. Internet service 200

4. Report printing and mailing 400

5. Report binding 200

Sub-total 1800

B. Conveyance: 1000

Sub-total 1000

C. Data collection costs:

1. Photocopy 2002. Annual report collection costs 500

3. Literature review 300

Sub-total 1000

D. Miscellaneous 1200

Sub-total 1200

Total estimated costs 5000

Limitations of the project:

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Limitation is a common phenomenon of any research study. But these limitations create

the bases for creation of further research and knowledge. I also hope to face some

limitation/ hindrances to perform my research topic.

The limitations may be:

1. The representatives of the firms may not want to provide the internal data by

saying confidential

2. Corporate governance concept may not be very clear for all of the representatives.

3. Not muck work may be done before on this topic.

4. The concern persons may be so busy to provide the related information

5. Load at work place may also be a barrier to do my research.

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Appendix:

A: Bibliography

1. Chowdhury, Dhiman (2004),Incentives, Control and Development-Governance

in private and public sector with special reference to Bangladesh, 1st edition,Nilima printers.

2. Ahmad, J.U (2004), Draft code of corporate governance-Bangladesh, Quartely

journal of the Institute of Chartered Accountants of Bangladesh, October-

December.

3. Ahmed, Mamataz Uddin and Yusuf, Md. Abu, Corporate Governence:

Bangladesh perspective,Journal of Institute of Cost And Management

Accountants if Bangladesh, Vol No 6, November-December 2005, pp. 18-26.

4. Bangladesh Enterprise Institute (BEI-2003),A comparative analysis of corporate

governance in South Asia: Charting a Roadmap for Bangladesh.

5. www.dscbd.org

6. www.bei-bd.org

7. www.sec.gov

8. www.bangladesh_bank.org

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http://www.dscbd.org/http://www.bei-bd.org/http://www.sec.gov/http://www.dscbd.org/http://www.bei-bd.org/http://www.sec.gov/


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B: List of acronyms

1. DSE = Dhaka Stock Exchange

2. BB = Bangladesh Bank

3. SEC = Securities and Exchange Commission4. BEI = Bangladesh Enterprise Institute

5. CG = Corporate Governance

6. ICMAB = Institute of Cost and Management Accountants of Bangladesh

7. ICAB = Institute of Charted Accountants of Bangladesh

8. ICB = Investment Corporation of Bangladesh

9. CEO = Chief Executive Officer

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Project proposal: Compliance status of the corporate governance codes by the listed firms in Bangladesh Research proposal