Corporate Governance in Bangladesh: A Quest for the Accountability or Legitimacy Crisis?

Abstract

Purpose – This study aims at presenting an overview, development, and process of current corporate governance practices in Bangladesh. Design/Methodology/Approach – Based on New Institutional Sociology (NIS) as a theoretical framework and by using archival data, this study highlights the roles of key institutional forces in reinforcing the existing corporate governance practices in Bangladesh. Findings – This study notes that corporate governance practices in Bangladesh are still at infancy. While Bangladesh is trying to adopt many international corporate governance best practices for institutional legitimacy, the weak institutional enforcement regime, along with the absence of an effective check and balance, poses serious challenges to the firm-level good corporate governance practices in Bangladesh. The absence of isomorphic pressures to regulate the firms leads to many incidences of noncompliance. Practical implications – This study takes part in the following global debate: whether corporate governance in an emerging economy is a reality or an illusion. Originality/Value – This study seeks to contribute to the increasing literature by recognizing the interest of readers, academics, practitioners, and regulators to gain more insight and understanding of corporate governance practices in an emerging economy, such as Bangladesh.