Ninth International Conference On Advances In Economics, Social Science And Human Behaviour Study - ESSHBS 2019
Author(s) : YESMIN SULTANA
In today's neoliberal world of globalization, financialization, and shareholder value maximization, companies often prioritize profit generation to proper governance practices, thus in cases leading to the demise of the business entities in the longer run. Similar incidents in the growing mobile telecommunication industry of Bangladesh such as the demise of the pioneering operator and tax compliance issues of the market leader have drawn attention to the level of corporate governance compliance of the companies operating in this industry. This paper specifically aims at measuring the level of compliance with corporate governance code by the mobile telecommunication companies in Bangladesh. This is measured from the score obtained on a modified corporate governance index (CGI) constructed based on five broad aspects of corporate governance, namely i) the board of directors; ii) management; iii) sub-committees; iv) reporting & disclosure; and, v) external auditing and these aspects were selected in light of the Corporate Governance Code issued by the Bangladesh Securities and Exchange Commission in 2018. The score of each of the broad categories were summed to obtain the total index score of the companies. In collecting relevant factual corporate governance related information, various secondary sources such as company websites, annual reports, policy documents, and other various relevant publications were utilized. Based on the CGI scores, the study finds out that all of the companies comply with majority of the guidelines although the degree of compliance varies among companies. The highest degree of compliance was identified in the case of Grameenphone, the largest and only publicly listed operator. On the contrary, Teletalk, the stat-owned operator, was found to be on the lower end of the CGI spectrum. The findings of the study are expected to assist regulators in developing further policies to ensure effective governance in the industry. However, the CGI may be modified further where perception of key stakeholders in relating to the various corporate governance related issues prevailing in the company may also be included to better capture the impact and interplay between numerous factual and perceptual factors in determining the CGI scores.