Introduction:

Corporate governance is a concept that has drawn attention from the corporate world globally in the last decade. Corporate governance has become a popular discussion topic in developed and developing countries. The widely held view that corporate governance determines firm performance and protects the interests of shareholders has led to increasing global attention. the recent wave of business scandals and ethical lapses heightened people, press and investor security of companies, creating demand for a culture of integrity driven performance and a new corporate transparency. Management and boards now feel compelled to ensure that proper governance processes are in place to protect corporate reputation, brand image, shareholder value. Because of this reasons the importance of corporate governance has grown up.

What is Corporate Governance?

Corporate governance is a system by which companies are directed and controlled. It is actually a framework which ensures the satisfaction or trade off of every stakeholder group shareholders, employees, community, customers, government, suppliers etc. In a narrow sense, corporate governance involves a set of relationships amongst the companys management, its board of directors, its shareholders, its auditors and other stakeholders. These relationships, which involve various rules and incentives, provide the structure through which the objectives of the company are set, and the means of attaining these objectives as well as monitoring performance are determined. Thus, the key aspects of good corporate governance include transparency of corporate structures and operations; the accountability of managers and the boards to shareholders; and corporate responsibility towards stakeholders. But it must be kept in our mind that the fundamental concern of corporate governance is to ensure the conditions whereby a firms directors and mangers are held accountable, ensure better an effective protection to all stakeholders. The World Bank argues that the framework of corporate governance should be based on four pillars of Responsibility, Accountability, Fairness and Transparency (RAFT).

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The Necessity of Corporate Governance:

While corporate governance essentially lays down the framework for creating long-term trust between companies and the external providers of capital, it would be wrong to think that the importance of corporate governance lies solely in better access of finance. Companies around the world are realizing that better corporate governance adds considerable value to their operational performance. To protect the stakeholders interests, to ensure they can exercise their rights properly To ensure information regarding the corporations activities and performances are adequately and properly disseminated to every related party To ensure a transparent, responsible & caring way out for the progress of the corporations there must be well clarified, well defined and generally accepted principles & guidelines. Strong corporate governance maintains investors confidence, as a result of which, company can raise capital efficiently and effectively. improves strategic thinking at the top by inducting independent directors who bring a wealth of experience, and a host of new ideas rationalizes the management and monitoring of risk that a firm faces globally assures the integrity of financial reports limits the liability of top management and directors, by carefully articulating the decision making process Corporate governance practices can not only benefit individual organizations, but also the specific sectors addressed by this Code, as well as the nation as a whole. Helps in brand formation and development. A positive impact of that company in share market.

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Corporate Governance in Bangladesh

Corporate Governance and Bangladesh: There has been a momentum for Bangladesh for the last couple of years. The issue of corporate governance has been largely discussed, analyzed, propagated in many ways by specialists, researchers, government bodies and also development partners. In the existence of weak form of efficiency of financial market, the emergence of corporate governance framework for the financial sector of Bangladesh has been well acknowledged. Since information asymmetry, moral hazard these two major but common problems of our financial sector is prevailing at large, ensuring corporate governance has become more in light with the growth of the country. Practitioners and specialists therefore have devoted their efforts to formulate some basic principles and guidelines to ensure a strong corporate governance framework for Bangladesh. In 2005 March, a conference, first of its kind labeled International Conference on Corporate Governance in Bangladesh was organized jointly by Dhaka Stock Exchange, Center for Corporate Governance and Finance Studies at Department of Finance of the University of Dhaka, the Organization for Economic Co-operation and Development (OECD) and The Asia Foundation. This was one major and well organized effort for promoting corporate governance in Bangladesh to come up with some recommendations, suggestions, policies and principles. OECD has proposed some principles on corporate governance to strengthen the corporate sector. These are known as OECD Principles of Corporate Governance. Another specialist institution Bangladesh Enterprise Institute (BEI) has detailed a full code of corporate governance for Bangladesh. This code presented in 2004 shows major divisions of principles such as board issues, role of shareholders, financial reporting, auditing and non-financial disclosures. The codes also show sector specific principles and guidelines such as for Sate Owned Enterprises (SOEs), Private Enterprises etc. As a matter of fact, BEI has been working with deep insight of the principles related to every stakeholder.

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Practical Implementation of CG in Bangladesh:

BOARD ISSUES: The Board of Directors is the central entity in a functioning corporate governance system since it is the governing body of any organization. The board is accountable to the shareholders and/or stakeholders of the organization. To meet its organizational objectives the board must provide strategic policy and direction to the management, but should not be involved in day-to-day operational decisions. Management is accountable to the board, and therefore information systems that provide relevant, transparent, and material information to the board are imperative. Individual boards must find the best way to adapt the guidelines and requirements of the Code to their organizations. The provisions of the Code may be incorporated into a Board Charter that defines the objectives, roles, and responsibilities of the board.

Issues include arei. Mission of the Board of Directors ii. Duties of the Board iii. Board Membership Criteria iv. Nomination of New Board Members v. Training vi. Separation of Chairman and CEO vii. Board Composition viii. Board Compensation ix. Board Agenda x. Committees (Type, Structure, Responsibilities) xi. Directors Report xii. Code of Conduct xiii. Company Secretary/Compliance Officer xiv. Access to Senior Management, Outside/Professional Advice xv. Evaluation of Board Performance
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Role of Shareholders This section of the Code of Corporate Governance applies primarily to public companies; however many of the same principles of transparency and accountability are relevant to private companies that have minority shareholders. Public listed companies should comply with all legal and regulatory requirements; some, but not all, of those requirements are highlighted within this Code. Issues included areI. Shareholders Handbook II. General Meetings III. Voting Rights and Duties FINANCIAL REPORTING, AUDITING AND NON-FINANCIAL DISCLOSURES Financial reporting and disclosures provide the tools by which stakeholders can monitor and evaluate an organizations corporate governance practices. In Bangladesh, the first hurdle that must be overcome is to improve the quality and reputability of financial statements and disclosures. This process must be a joint undertaking of the regulators, self-regulatory organizations (primarily the Institute of Chartered Accountants of Bangladesh ICAB), and organizations themselves. If companies begin to demand more from their own accounting personnel and their auditors, the quality of accounts and audits will improve. Simultaneously, the accounting profession must focus on ensuring compliance with audit standards, enforcing self-regulation, and increasing the number of qualified Chartered Accountants. These two movements can be further complimented by supporting actions on the part of regulators. Such a combination of reforms will create a virtuous circle of quality disclosures and increase demand from investors for more transparent financial statements. Accounting and auditing scandals around the world in recent years have shown how important this profession is to safeguard investor funds and ensure transparency. Without reform, the corporate sector in Bangladesh may be heading towards such disasters as weve seen in other regions; at the very least, the accounting and auditing profession will lose all credibility and prestige. Issues included areI. Accounting Standards II. Preparation of Accounts III. External Auditors IV. Internal Audit V. Disclosures

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SECTOR-SPECIFIC PROVISIONS: FINANCIAL INSTITUTIONS AND SOES

The following two sections detail corporate governance provisions that should be followed by specific types of organizations, namely, financial institutions (FIs) and state owned enterprises (SOEs). These sections address issues that are unique to each sector, but are to be considered in addition to the provisions outlined in the previous sections of the Code of Corporate Governance. 1. Financial Institutions: This section of the Code can be applied to all banks, including Nationalized Commercial Banks (NCBs), and non-bank financial institutions Financial Institutions (FIs) should follow the provisions laid out in the previous sectionsI. Duties to Depositors and Customers II. Disclosures III. Board of Directors IV. Credit Assessment and Asset Monitoring V. Debt Recovery VI. Risk Management VII. Corporate Governance Compliance 2. State-Owned Enterprises: Corporate governance is necessary for the government to exercise its ownership of SOEs in a transparent and accountable manner. I. Some additional provisions for SOEs II. Application of the Code of Corporate Governance III. Legal mandate and Monitoring IV. Statement of Corporate Intent V. Board of Directors VI. Board and Management VII. Reporting VIII. Remuneration

Basic Checklist for Implementation of the Code of Corporate Governance:

Below is a simplified summary of specific recommendations for implementation of the Code of Corporate Governance. The basic checklist below is drawn from the Code but is not an exhaustive list of steps that could be taken to improve corporate governance. I. Board of Directors 1. Develop a Director Job Description including roles, rights, responsibilities, and required qualifications. 2. Develop and agree to a Board Code of Conduct. 3. Create Committees of the Board of Directors as appropriate.
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4. Initiate a board performance review process. If a review has not previously evaluated the size of the board, director re-election policy and term limits, such items should be included in the review. 5. Create and affirm a Statement of Going Concern and Compliance Certificate. 6. Develop a Board Charter, which establishes the roles, responsibilities, and specific annual objectives of the board. From the Board Charter, a board work plan can be developed. 7. Develop a program of training of individual directors and the board as a whole. Particular focus should be given to new directors. II. Employees 1. Develop an Employee Code of Conduct. 2. The Code of Conduct should be incorporated into employment contracts and be a requirement of employment. 3. An enforcement program should identify and punish violations of the Code of Conduct. III. Shareholders 1. Create and distribute a Shareholders Handbook. 2. Examine procedures for AGM notice, setting the AGM agenda, voting practices, and recording the results of the AGM. 3. Review procedures for nomination of directors and nomination of the external auditors to ensure adequate and appropriate opportunities for shareholder participation. IV. Disclosures and Reporting 1. Make appropriate changes in auditor appointment guidelines to institute a rotation of audit firms or partners. 2. Expand the annual report to include disclosures as provided in the Sample Contents of an Annual Report. V. Financial Institutions 1. Develop and publish a Code of Best Practice for Customers. 2. Develop and publish a Code of Corporate Social and Environmental Responsibility. 3. Expand disclosures in the Annual Report and other public documents to comply with the Code of Corporate Governance. 4. Initiate a risk management review, if such a review is not already practiced. 5. Review credit assessment process to incorporate corporate governance into credit decisions. 6. Develop and affirm an attestation from the CEO/MD that material risks are being effectively identified, monitored, and managed. VI. State Owned Enterprises 1. Define shareholder(s) and monitoring agency. 2. Develop a Statement of Corporate Intent and negotiate and agree such statement with the responsible monitoring agency. Develop a process for
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reporting and performance appraisal based on the Statement of Corporate Intent. 3. Develop statement of directors duties and responsibilities. 4. Review internal control systems, auditing, and reporting and disclosure practices for compliance with the Code of Corporate Governance. VII. Institutional Investors 1. Develop and publish investment principles and practices. 2. Develop voting guidelines and procedures. Establish a record-keeping system for proxy voting performance monitoring. 3. Develop guidelines for taking an active role in corporate governance of companies in which investments are made. 4. Publish corporate governance principles and practices which are expected from companies in which investments are made.

Sample Terms of Reference for a Finance and Audit Committee:

1. Membership The Board shall appoint members of the Committee. The Committee shall be made up of at least 3 members. All members of the Committee shall have recent and relevant financial experience. The Chairman of the Board shall not be a member of the Committee. 2. Quorum: The quorum necessary for the transaction of business shall be 3 members. 3. Frequency of Meetings: The Committee shall meet at least three times a year at appropriate times in the reporting and audit cycle and otherwise as required. 4. Notice of Meetings Meetings of the Committee shall be summoned by the Secretary of the Committee at the request of any of its members or at the request of external or internal auditors if they consider it necessary. 5. Minutes of Meetings: The Committee Secretary shall minute the proceedings and resolutions of all meetings of the Committee, including recording the names of those present and in attendance. 6. Annual General Meeting: The Committee should carry out the following duties as explained below: Financial Reporting Internal Controls and Risk Management Systems internal Audit External Audit 7. Authority: The Committee is authorizeda. To seek any information it requires from any employee of the organization in order to perform its duties

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b. To obtain, at the organizations expense, outside legal or other professional advice on any matter within its terms of reference and c. To call any employee to be questioned at a meeting of the Committee as and when required.

Corporate Governance in India

The Indian corporate scenario was more or less stagnant till the early 90s. The position and goals of the Indian corporate sector has changed a lot after the liberalization of 90s.Indias economic reform program made a steady progress in 1994. India with its 20 million shareholders is one of the largest emerging markets in terms of the market capitalization. In India, these issues of corporate governance have come to the fore only in the last couple of years. Naturally, the debate in India has drawn heavily on the British and American literature on corporate governance. There has been a tendency to focus on the same issues and proffer the same solutions. For example, the corporate governance code proposed by the Confederation of Indian Industry (Bajaj, 1997) is modeled on the lines of the Cadbury Committee (Cadbury, 1992) in the United Kingdom. This paper argues however that the crucial issues in Indian corporate governance are very different from those in the US or the UK. Consequently, the corporate governance problems in India require very different solutions at this stage of our corporate development. One finds increasing concern about improving the performance of the Board. In 1996, Confederation of Indian Industry (CII), took a special initiative on Corporate Governance. The objective was to develop and promote a code for corporate governance to be adopted and followed by Indian companies, be these in the Private Sector, the Public Sector, Banks or Financial Institutions, all of which are corporate entities. this initiative by CII flowed from public concerns regarding the protection of investor interest, especially the small investor, the promotion of transparency within business and industry. BOARD OF DIRECTORS A. APPOINTMENT OF DIRECTORS A.1 Appointments to the Board: Companies should issue formal letters of appointment to Non- Executive Directors (NEDs) and Independent Directors - as is done by them while appointing employees and Executive Directors. The letter should specify: 1. The term of the appointment; 2. The expectation of the Board from the appointed director; the Board-level committee(s) in which the director is expected to serve and its tasks; 3. The Code of Business Ethics that the company expects its directors and employees to follow;
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4. The list of actions that a director should not do while functioning as such in the company; Such formal letter should form a part of the disclosure to shareholders at the time of the ratification of his/her appointment or re-appointment to the Board. This letter should also be placed by the company on its website, if any, and in case the company is a listed company, also on the website of the stock exchange where the securities of the company are listed. A.2 Separation of Offices of Chairman & Chief Executive Officer: To prevent unfettered decision making power with a single individual, there should be a clear demarcation of the roles and responsibilities of the Chairman of the Board and that of the Managing Director/Chief Executive Officer (CEO). The roles and offices of Chairman and CEO should be separated, as far as possible, to promote balance of power. A.3 Nomination Committee: The companies may have a Nomination Committee comprising of majority of Independent Directors, including its Chairman. A.4. Number of Companies in which an Individual may become a director For reckoning the maximum limit of directorships, the following categories of companies should be included:public limited companies, private limited companies that are either holding or subsidiary companies of public companies. In case an individual is a Managing Director or Whole-time Director in a public company the maximum number of companies in which such an individual can serve as a Non-Executive Director or Independent Director should be restricted to seven. B. INDEPENDENT DIRECTORS B.1 Attributes for Independent Directors The Board should put in place a policy for specifying positive attributes of Independent Directors such as integrity, experience and expertise, foresight, managerial qualities and ability to read and understand financial statements. Disclosure about such policy should be made by the Board in its report to the shareholders. Such a policy may be subject to approval by shareholders. All Independent Directors should provide a detailed Certificate of Independence at the time of their appointment, and thereafter annually. This certificate should be placed by the company on its website, if any, and in case the company is a
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listed company, also on the website of the stock exchange where the securities of the company are listed. B.2 Tenure for Independent Director An Individual may not remain as an Independent Director in a company for more than six years. ii. A period of three years should elapse before such an individual is inducted in the same company in any capacity. iii. No individual may be allowed to have more than three tenures as Independent Director in the manner suggested in 'i' and 'ii' above. iv. The maximum number of public companies in which an individual may serve as an Independent Director should be restricted to seven. B.3 Independent Directors to have the Option and Freedom to meet Company Management periodically i. In order to enable Independent Directors to perform their functions effectively, they should have the option and freedom to interact with the company management periodically. ii. Independent Directors should be provided with adequate independent office space and other resources and support by the companies including the power to have access to additional information to enable them to study and analyze various information and data provided by the company C. REMUNERATION OF DIRECTORS C.1 Remuneration C.1.1 Guiding Principles-Linking Corporate and Individual Performance The companies should ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully. Remuneration Policy for the members of the Board and Key Executives should be clearly laid down and disclosed. C.1.2 Remuneration of Non-Executive Directors (NEDs) The companies should have the option of giving a fixed contractual remuneration, not linked to profits, to NEDs. The companies should have the option to: (a) Pay a fixed contractual remuneration to its NEDs, subject to an appropriate ceiling depending on the size of the company; or (b) Pay up to an appropriate percent of the net profits of the company C.1.4. Remuneration of Independent Directors (IDs) In order to attract, retain and motivate Independent Directors of quality to contribute to the company, they should be paid adequate sitting fees which may depend upon the twin criteria of Net Worth and Turnover of companies.
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The IDs may not be allowed to be paid stock options or profit based commissions, so that their independence is not compromised. C.2 Remuneration Committee Companies should have Remuneration Committee of the Board. This Committee should comprise of at least three members, majority of whom should be non-executive directors with at least one being an Independent Director

Responsibilities of the Board

A. Training of Directors i. The companies should ensure that directors are inducted through a suitable familiarization process covering, inter-alia, their roles, responsibilities and liabilities. Efforts should be made to ensure that every director has the ability to understand basic financial statements and information and related documents/papers. There should be a statement to this effect by the Board in the Annual Report. B. Enabling Quality Decision making The Board should ensure that there are systems, procedures and resources available to ensure that every Director is supplied, in a timely manner, with precise and concise information in a form and of a quality appropriate to effectively enable/ discharge his duties. The Directors should be given substantial time to study the data and contribute effectively to Board discussions C. Risk Management i. The Board, its Audit Committee and its executive management should collectively identify the risks impacting the company's business and document their process of risk identification, risk minimization, risk optimization as a part of risk management policy or strategy. D. Evaluation of Performance of Board of Directors, Committees thereof and of Individual Directors The Board should undertake a formal and rigorous annual evaluation of its own performance and that of its committees and individual directors. The Board should state in the Annual Report how performance evaluation of the Board, its committees and its individual directors has been conducted. E. Board to place Systems to ensure Compliance with Laws In order to safeguard shareholders' investment and the company's assets, the Board should, at least annually, conduct a review of the effectiveness of the company's system of internal controls and should report to shareholders that

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they have done so. The review should cover all material controls, including financial, operational and compliance controls and risk management systems. AUDIT COMMITTEE OF BOARD A. Audit Committee Constitution The companies should have at least a three-member Audit Committee, with Independent Directors constituting the majority. The Chairman of such Committee should be an Independent Director. All the members of audit committee should have knowledge of financial management, audit or accounts. B. Audit Committee Enabling Powers: i. The Audit Committee should have the power to have independent back office support and other resources from the company; have access to information contained in the records of the company; and obtain professional advice from external sources. ii The Audit Committee should also have the facility of separate discussions with both internal and external auditors as well as the management. C. Audit Committee - Role and Responsibilities i. The Audit Committee should have the responsibility to monitor the integrity of the financial statements of the company; review the company's internal financial controls, internal audit function and risk management systems; make recommendations in relation to the appointment, reappointment and removal of the external auditor and to approve the remuneration and terms of engagement of the external auditor; AUDITORS A. Appointment of Auditors i. The Audit Committee of the Board should be the first point of reference regarding the appointment of auditors. ii. The Audit Committee should have regard to the profile of the audit firm, qualifications and experience of audit partners, strengths and weaknesses, if any, of the audit firm and other related aspects. iii. To discharge its duty, the Audit Committee should: discuss the annual work program and the depth and detailing of the audit plan to be undertaken by the auditor, with the auditor; examine and review the documentation and the certificate for proof of independence of the audit firm, and recommend to the Board, with reasons, either the appointment/reappointment or removal of the statutory auditor, along with the annual audit remuneration.
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B. Certificate of Independence i. Every company should obtain a certificate from the auditor certifying his/its independence and arm's length relationship with the client company. C. Rotation of Audit Partners and Firms i. In order to maintain independence of auditors with a view to look at an issue (financial or non-financial) from a different perspective and to carry out the audit exercise with a fresh outlook, the company may adopt a policy of rotation of auditors which may be as under: Audit partner - to be rotated once every three years Audit firm - to be rotated once every five years. ii. A cooling off period of three years should elapse before a partner can resume the same audit assignment. This period should be five years for the firm. D. Need for clarity on information to be sought by auditor and/or provided by the company to him/it i. With a view to ensure proper and accountable audit, there should be clarity between company management and auditors on the nature and amount of information/documents/ records etc and periodicity/frequency for supply/obtaining such information/ documents/ records etc. ii. In any case the auditor concerned should be under an obligation to certify whether he had obtained all the information he sought from the company or not. In the latter case, he should specifically indicate the effect of such non receipt of information on the financial statements. E. Appointment of Internal Auditor In order to ensure the independence and credibility of the internal audit process, the Board may appoint an internal auditor and such auditor, where appointed, should not be an employee of the company SECRETARIAL AUDIT Since the Board has the overarching responsibility of ensuring transparent, ethical and responsible governance of the company, it is important that the Board processes and compliance mechanisms of the company are robust. To ensure this, the companies may get the Secretarial Audit conducted by a competent professional. The Board should give its comments on the Secretarial Audit in its report to the shareholders INSTITUTION OF MECHANISM FOR WHISTLE BLOWING Since the Board has the overarching responsibility of ensuring transparent, ethical and responsible governance of the company, it is important that the Board processes and compliance mechanisms of the company are robust. To
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ensure this, the companies may get the Secretarial Audit conducted by a competent professional. The Board The companies should ensure the institution of a mechanism for employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the company's code of conduct or ethics policy. ii. The companies should also provide for adequate safeguards against victimization of employees who avail of the mechanism, and also allow direct access to the Chairperson of the Audit Committee in exceptional cases. should give its comments on the Secretarial Audit in its report to the shareholders.

Comparison of CG between Bangladesh and India:

Although India has some similarities with Bangladesh in the way that the financial sector and private sector have developed historically, India has recognized the importance of corporate governance and increased transparency in the corporate sector but Bangladesh has not recognized that yet.

Subject Composition of Board

India Optimum combination of executive and non executive directors with not less than fifty percent of the BOD comprising of Non-executive directors. Provisions relating to the composition of BOD of the holding company are applicable to the composition of BOD of subsidiary companies. At least one independent director on the BOD of the holding company shall be a director on the BOD of the subsidiary company.

Bangladesh A public-listed company to have a minimum of seven and a maximum of fourteen directors, comprising of directors representing various categories of shareholders. The directors representing sponsors should not be more than seven, of which not more than three should be relatives. There should be one director representing institutional investors or lenders. If there is no institutional investor or lender, the vacancy should be filled up from amongst the general public. The CEO, by whatever name called, should be an ex-officio director.
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Subject Number of Independent Directors

India In case of a nonexecutive chairman, at least one-third of board should comprise of independent directors In case of an executive chairman, at least half of board should comprise of independent directors.

Bangladesh There should be at least two independent directors.

Who is Independent Director

Who apart from receiving directors remuneration: Does not have any material pecuniary relationships or transactions with the company, its promoters, its senior management or its holding company, its subsidiaries and associated companies. Is not be related to promoters or management at the board level or at one level below the board. Must not have been an executive of the company in the immediately preceding three financial years and is not a partner or an executive of the statutory audit firm or the internal audit firm that is associated with the company, and has not been a partner or an executive of any such firm for the last three

An independent director is a nonexecutive director (i.e., is not a member of management), who: is not a whole-time director or a managing director of a company; has no transaction with the company or its directors or managers in connection with business / profession or in any other capacity; is not a relative of any directors or mangers of the company; does not hold or has not held any post in the company within the preceding five years; has not been an auditor or consultant of the company during
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Subject

India years. This will also apply to legal firm(s) and consulting firm(s) that have a material association with the entity. Is not a supplier, service provider or customer of the company. Is not a substantial shareholder of the company, i.e. owning two percent or more of the block of voting shares. Institutional directors on the boards of companies shall be considered as independent directors whether the institution is an investing institution or a lending institution.

Bangladesh any of the five preceding financial years; is not or has not been a supplier or vendor or customer of the goods or services of the company; does not hold any ordinary shares of the company; has not been a director or an independent director for a consecutive period of six years or more; is not a member of a stock exchange; or is not engaged in the business of brokerage or dealings in the securities of listed companies; has not been convicted by a court as a defaulter in payment of any loan to a bank or financial institution.

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Subject Chairman / Lead Director

India He may or may not be an Executive. However in both the situations the number of independent directors would be different (as discussed above). A non-executive Chairman should be entitled to maintain a Chairmans office at the companys expense and also allowed reimbursement of expenses incurred in performance of his duties. Compensation to Independent and NonExecutive (including Executive Directors CEO), Non-Executive and Fixed by the BOD and Independent Directors approved in AGM. Limits shall be set for the maximum stock options that can be granted to nonexecutive directors in any financial year and in aggregate. The stock options granted to the nonexecutive directors shall vest after a period of at least one year from the date such nonexecutive directors ceases as member of BOD.

Bangladesh The chairman should be an independent director. The roles of chairman and chief executive officer should not be exercised by the same individual.

The company should design its human resources policy: motivates directors and management to pursue the longterm growth and success of the company within an appropriate control framework. demonstrates a clear relationship between key executive performance and remuneration. The Directors to ensure that payment of equity based executive remuneration is made in accordance with thresholds set in plans approved by shareholders.
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Subject Tenure of BOD and election of directors

India Both Executive and NonExecutive Three years

Bangladesh The names of candidates submitted for election as director should be accompanied by: biographical details, including competencies and qualifications; details of relationships between the candidate and the company and the candidate and directors ; directorships held; particulars of other positions which involve significant time commitments; the term of office currently served by any directors subject to reelection. Non-executive directors should be appointed for a three years term subject to re-election. Re-appointment of directors should not be automatic. No non-executive director should be elected consecutively for more than two terms.

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