Corporate governance reforms in emerging countries: A case study of Bangladesh

Abstract

This article considers three related research questions, all in the context of an emerging economy, Bangladesh: What is the history of corporate governance (CG) reform in Bangladesh? What explains the introduction of CG guidelines in Bangladesh? and How have the country-level initiatives to improve CG influenced the firm-level practices of CG? By analysing the agency environment and CG reforms in Bangladesh, this article finds that, in spite of the number of reform initiatives undertaken since the early 1990s, there is substantial scope for further improvement, particularly in monitoring and enforcement by regulators, both external bodies, particularly the International Financial Agencies, and domestic forces have both affected the extent of CG reform in Bangladesh; and CG regulations take effect over time as companies gradually update their CG practices to comply with the national guidelines. The introduction of annual awards by the professional institutions also seems to have motivated companies to improve their governance practices.