With the economic development of Bangladesh, the number of corporate bodies, especially led by the private sector, has increased significantly over the years. Incidentally, many of the businesses are sponsored, managed and controlled by families. Irrespective of its ownership structures, the governance of these business groups is of paramount importance, especially when the entities have been using public money by way of shares subscriptions, bank loans and public deposits.  

The "Pillars of Corporate Governance" is like the backbone of an organisation, and it provides structure, accountability, and a roadmap for ethical decision-making. It is usually built on four pillars that we like to call the 4 Ps: people, processes, performance, and purpose.

In fact, corporate governance is established based on fundamental documents and tools like articles of association, government rules and regulations, company policies and guidelines and so on. It is the responsibility of the board of directors and its committees to ensure good governance. In this process, the role of independent directors is critically important to ensure good governance. The basic requirement to become an independent director is that he/she must be independent by nature, appearance, character, and judgment. His/her qualifications, background, experience, and most importantly knowledge in business are very important for making the role effective and rewarding.

With the above principles, frameworks and general expectations, let us now see what has really happened in Bangladesh recently. First of all, it should be recognised that there are a number of multinational companies (MNCs), foreign companies, listed companies, banks, financial institutions, insurance companies and even a few family business groups which are practicing good corporate governance ensuring fair return to the business partners including public shareholders, repaying loans regularly, paying taxes adequately and regularly and taking care of other stakeholders including customers and employees.

On the contrary, many companies have severely failed to establish and comply with the requirements of corporate governance, misused public money and siphoned out a huge amount of funds in a systematic manner, ultimately at the cost of stakeholders. In some cases, complete breakdown of corporate governance is evident. As a result, the country's economic development and growth have been severely impacted. The question again comes, how did it happen? These are—a) principal owner(s) in the positions of chairman or managing director (CEO) has been overpowered, b) remaining directors have been made inactive, c) appointing loyal and incompetent independent directors, d) appointments of inefficient persons as board member on political consideration, e) appointing auditors with weak ethical standards, f) board committees have been non-functional and ineffective, g) lack of transparency, accountability and misreporting, g) somehow or other managing regulators and so on.

Further, even the management team becomes non-professional and just carry out the orders of their chief/boss. In some cases, overpowered person assigned his/her representative in top position to serve his/her interest. These overpowered chairman or CEO, in the absence of good corporate governance, have systematically misappropriated or syphoned out a huge amount of public money by way of or in the name of—1) acquisition of land and building, 2) import of machinery and raw materials at high prices, 3) fake bank loans, 4) loan to non-performing or less performing subsidiaries or group companies and 5) charging huge personal expenses into company's account and similar other ways.

The silent role and improper practices as well as unwarranted interference and intervention of regulators apart from political interference have also contributed to worsening this situation.

Finally, it is notable that there are sufficient rules, regulations, and guidelines in the country and huge sources of information as available through the internet and global market practices. The question is who are the men behind these corporates? There is no alternative to good corporate governance to protect the public interest, and there should be oversight and appropriate evaluation to avoid further damage in the future.

The writer is a senior partner at Hoda Vasi Chowdhury & Co and a former president of the Institute of Chartered Accountants of Bangladesh