Strengthening governance in Bangladesh

Governance is essential at all levels, whether in a family, a company or a government. It is not rocket science but a matter of standard operation and administration. This includes, among other things, compliance with rules, regulations and policies, with due importance placed on avoiding misrule and mismanagement, and ultimately protecting the public interest. These are basic requirements.

Where these have not been properly followed, both the country and the economy have suffered. A small group of individuals has gained disproportionately, putting the present and future of the nation in a fragile and uncertain state. Sometimes an economy can recover with rehabilitation measures, but many companies find no way out of the damage caused by poor or absent governance. One of the clearest examples is the banking and financial sector in Bangladesh, where some banks and non-bank financial institutions are facing a severe liquidity crisis.

The question is why Bangladesh has reached this stage. There are enough laws and regulations, but they were not followed as they should have been. Leadership often prioritised personal interest and gain over the broader national interest. Independent institutions were left weak or used for self-serving purposes. Media reports were ignored. Ethical standards, professionalism, transparency and accountability hit rock bottom.

Among many contributing factors, leadership is of paramount importance. When those at the top engage in corruption and focus on personal interest, their family members and close associates are encouraged to do the same. Corruption then spreads uncontrollably, as has been witnessed in recent years. If the top leadership refrains from such practices, most of the problems do not arise.

Leaders, whether in politics or business, must act as custodians of public resources, not as figures of power who misuse the responsibilities entrusted to them. It is also essential that wrongdoers are brought to justice through an independent judiciary. This is the only way to prevent these damaging patterns from repeating.

Similarly, the corporate sector has suffered heavily due to poor governance. Fundamental practices such as complying with internal policies, ensuring independent and competent board appointments, conducting proper internal audits and adopting credible external auditors have been overlooked. Many institutions still lack digital systems, and board members, including independent directors, have often been selected based on personal preference rather than competence. All this has contributed to the worsening of corporate governance in Bangladesh.

There is a direct link between weak governance and corruption. Without improving governance, corruption cannot be contained within even a tolerable level, let alone eradicated. If no action is taken against wrongdoing, criminal behaviour and misappropriation, governance is bound to deteriorate further.

Over time, the overall culture of governance and the management of public interest have declined to an alarming degree. There is no alternative but to reverse this trend. The current government has introduced reform agendas across several sectors. Encouragingly, the general public has expressed support for these interim efforts, knowing full well that governments formed through political parties rarely give serious attention to such issues. Lack of competent leadership and a preference for group or personal interests often take priority. Political pressures from within parties have discouraged strict adherence to governance norms.

What is needed now is strict compliance with rules and policies, the appointment of ethical and capable individuals, strong oversight, swift enforcement of laws and timely disciplinary measures. These are vital tools to curb corruption and improve the overall situation.

In the end, the four pillars of governance, people, purpose, process and performance, must be upheld and enforced consistently. Legal and punitive measures must follow without exception. This is the only way to move forward.

The writer is a senior partner of Hoda Vasi Chowdhury & Co and former president of ICAB