Independent Directors: The Contrasting Cases of Australia and Bangladesh

Abstract

The Bangladesh corporate governance regime is framed by legal rules and requirements, in comparison to those prevailing in such jurisdictions as Australia. However, it is arguable that such legal rules have not necessarily led to major modernisation of structures or to such significant changes to the profile of company boards that would maximise their effectiveness. This study involves analysis and comparison of some of the important characteristics of Bangladeshi and Australian company boards, with a particular focus on independent directors. To provide context for this study, the regulatory framework for corporate governance in Bangladesh is compared and contrasted with that of Australia as an example of a developed country, while the study itself explores directors with reference to diversity, age, remuneration, expertise and experience and governance involvement. The results demonstrate that as well as differences, particularly around diversity, there are surprising similarities as well, principally around age and expertise. What is most marked is the lack of an independent skill development or recruitment facility for Bangladeshi directors such as operates in Australia, a lack that potentially limits the extent to which an open, competitive market for director skills can develop.