Welcome to our Presentation

Department of Accounting & Information Systems (2 nd Batch)

University of Barisal
A presentation on

Practice of Corporate governance

In Telecommunication sector of Bangladesh

By group no: 02
Group Members
 Name  ID

Sarmin Akter Mitu 13 AIS 002

Tanzila Akter Ripa 13 AIS 054
Sabina Akter 13 AIS 029
Tajim Asadi 13 AIS 041
Md. Mosharrof Hossain 13 AIS 065
Shariful Islam 13AIS 018
Ayesha Siddika Munira 12 AIS 065
Mst. Ruma 13 AIS 076
 Governance & Corporate governance

Governance is:
Some rules and regulations for a country or organization.

Corporate governance is:

“The system by which companies are directed and controlled.”
(UK - Cadbury Report, London, 1992)…
Good governance elements
 Corporate Governance of Telecom
Industry

 Corporate Governance policies and practices of the

telecom Industry are focused on ensuring fairness,
transparency and accountability in the organization as
a whole. Telecom Industries are structured and
systems and processes organized aligned with
accepted Corporate Governance practices and also in
line with guidelines of Bangladesh Bank and the
Bangladesh Securities and Exchange Commission
(BSEC) in this regard. While pursuing the goal of
Shareholders value addition, Telecom Industry
attached utmost importance to setting up of well-
defined compliance oriented organization and
business structure.
Elements of Corporate governance
Why is Corporate Governance Important?

Good Corporate Governance ensures that the business

environment is fair and transparent and that companies
can be held accountable for their actions.
The Benefits of Corporate Governance
 Board of Directors
 Board of Directors of such companies Limited
comprises of 12 (twelve) Members. This is in
conformity of Bangladesh Bank guidelines and also
the Articles of Association . Board includes two
Independent Directors in pursuance with respective
regulatory requirements. Board of Directors is
professionally run forum having Members from various
backgrounds and professions. Board is the apex body
for strategy and policy formulations and for taking
decisions on business, operational and financial
matters besides ensuring compliance and risk
management . This is run professionally following the
guidelines and also within the authorities of the
Memorandum and Articles of Associations .
Management operates within the policies, guidance
and limits approved by the Board. Board holds
 Executive Committee

 Executive Committee of the Board is

formed following the guidelines of in this
respect and comprises of 5(five) Members
nominated by the Board. Executive
Committee operates within the Terms of
Reference (TOR) set by the Board.  
 Audit Committee

 Telecom Industry has been formed in strict

compliance guidelines and accordingly
comprises of 5(five) Members. Chairman of
the Audit Committee is the Independent
Director of the Board. The Company
Secretary acts as the Secretary of the
Committee while other Members of the
Management attends the Committee Meeting
on invitation only. Audit Committee has set
Terms of Reference as contained in
guidelines.
 Regulatory compliance
disclosure
 Telecom Industry has been following related guidelines
on submission of Quarterly, Half-yearly and Yearly
financial statements and other statutory reports.
 Any significant development in the business is forth-with
disclosed through the adherence of proper
rules/guidelines/directive in the form of price sensitive
declarations. Telecom Industy also ensures submission
of returns to regulatory bodies in full-compliance of the
requirements and appropriate disclosures ensuring
transparency and accountability .Board of Directors
ensures adequate disclosures for the Shareholders and
other stakeholders through the Annual Report or other
specific disclosures, if required.
 
 Delegation of Power

 Management of the telecom Industry has

been empowered with appropriate finance
and business decision making . 
Actors of Corporate governance
 Corporate Governance In
Telecom Industry
 Approved by the Board from time to time with levels
of authority and process delegation varied across
the telecom industries .Telecom Industry also has a
well empowered ALCO to deal with funding and
treasury matters. President & Managing Director is
the Executive Head of the telecom industries .
Telecom industries has approved Organizational
Structure (Organ gram) up to the Unit Level with
clear functional segregation and also segregation of
processing and functioning authorities. This
ensures Core Risk Management compliance across
the telecom industry. Telecom industries 's functions
and plans also consider various regulatory limits and
restrictions to be risk compliant as well
 . A Risk Management Division (RMD) has
been formed in compliance with the
relevant guidelines . telecom industries also
has a strong SRP Team in the overall
telecom industries are governed by the rules,
regulations, guidelines, directions and
policies as applicable for the banking
business and operation . Different control
aspects on the basis of regulatory or
business needs are in place which includes
capital adequacy, risk management, market
and liquidity, anti money laundering
compliance, prudential guidelines,
reporting standards, among others.
Business Plan vs Achievements

 Business Plan of the telecom industry

provides for the Working Platform
embodying the growth aspect, profitability,
risk appetite, capital management, etc. It
also embodies accountability in terms of
set KPI's and acts as a roadmap for
Shareholders value addition
Internal Control and Compliance
Division (ICCD):

 Telecom Industry has a separate Division

for Internal Control & Compliance
monitoring. This Division operates
 independently and has given
responsibilities by the Board.
 Head of Internal Control & Compliance
Division is accountable to the Audit
Committee of the Board
 External Audit:

 External Auditors also covered potential

Branches and Head Office as part of the
Annual Audit Program. Auditors covered 80%
of the risk assets. Auditors submitted a
Management Report with a Special Section
on the “Review of Bank’s Internal Control
Environment” of the Bank. The Report was
discussed in the Audit Committee. Audit
Committee referred the Report for detailed
review as to compliance to the Board of
Directors Meeting.
Inspection by Bangladesh Bank:

 Bangladesh Bank conducted the

comprehensive inspection of Head Office
and 10 selected Branches based on 31
December 2014. A Tri party meeting
among Bangladesh Bank, External
Auditors and Management
 Of telecom industries has been conducted
for finalization of annual Financial
Statements. 
 Grameen phone ltd
Condition no Title Compliance Status

2011 2012 2013 2014

1.00 Board of yes yes yes yes

Directors
1.1 Board’s size: yes yes yes yes
should not be less
than 5 (five) and
more
that 20 (twenty)

1.2 (i) Independent yes yes yes yes

Directors: At
least one fifth
(1/5) of the
total number of
directors in the
company’s board
shall
be independent
directors.
1.2 (ii) a) Shareholding less yes yes - yes
than one percent
(1%) shares of the
total paid-up
shares of the
company;

1.2 (ii) b) Any sponsor or yes yes yes yes

director or
shareholder who
holds one
percent (1%) or
more shares of the
total paid-up shares
of the company on
the basis of family
relationship.

1.2 (ii) c) Any other yes yes yes

relationship, yes
whether pecuniary
or otherwise,
with the company
or its
subsidiary/associat
ed
companies;
1.2 (ii) d) who is not a yes yes yes yes
member, director
or officer of any
stock
exchange;

1.2 (ii) e) who is not a yes yes yes yes

shareholder, director
or officer of
anymember of stock
exchange or an
intermediary of
thecapital market;

1.2 (ii) f) who is not a partner yes yes yes yes

or an executive or
was not a partneror
an executive during
the preceding 3
(three) years of
any statutory audit
firm;
1.2 (ii) g) who shall not be an yes _ yes yes
independent
director in more
than 3
(three) listed
companies;

1.2 (ii) h) who has not been yes yes _ yes

convicted by a court
of
competentjurisdictio
n as a defaulter in
payment of any loan
to abank or a Non-
Bank Financial
Institution (NBFI);

1.2 (ii) i) who has not been yes yes yes yes
convicted for a
criminal
offenceinvolving
moral turpitude.
1.2 (iii) the independent yes yes yes yes
director(s) shall
be nominated by
theboard of
directors and
approved by the
shareholders in
the Annual
General Meeting
(AGM).

1.2 (iv) the post of _ yes yes

independent
director(s) can not
remain
vacant for more
than 90 (ninety)
days.

1.2 (v) the Board shall lay yes yes yes yes
down a code of
conduct of all
Boardmembers
and annual
compliance of the
code to
berecorded.
1.2 (vi) the tenure of yes _ yes yes
office of an
independent
director shall
befor a period of
3 (three) years,
which may be
extendedfor 1
(one) term only.

1.3 (i) Qualification of yes yes yes yes

Independent
Director:
Independent
Director shall be
a knowledgeable
individual with
integrity who is
able to ensure
compliance with
financial,regulato
ry and corporate
laws and can
make
meaningfulcontri
bution yesto
business.
1.3 (ii) The person should be a yes yes yes yes
Business
Leader/Corporate
Leader/Bureaucrat/Uni
versity Teacher with
Economics or Business
Studies or Law
background/Profession
als like Chartered
Accountants, Cost &
Management
Accountants,
Chartered Secretaries.
The independent
director must have at
least 12 (twelve) years
of
corporatemanagement/
professional
experiences.

1.3 (iii) In special cases the yes yes _ yes

above qualifications may
be relaxed subject to
prior approval of the
Commission.
1.4 Chairman of the yes yes yes _
Board and Chief
Executive Officer:
The positions of the
Chairman of the
Board and the
ChiefExecutive
Officer of the
companies shall be
filled by different
individuals.

1.5 The Directors’ yes yes yes yes

Report to
Shareholders

1.5 (i) Industry outlook and yes yes yes yes

possible future
developments in the
industry.
1.5 (ii) Segment-wise or product-wise performance. yes yes yes yes

1.5 (iii) Risks and concerns. yes yes yes yes

1.5 (iv) A discussion on Cost of Goods sold, Gross Profit Margin yes yes yes _
and Net Profit Margin.

1.5 (v) Discussion on continuity of any Extra-Ordinary gain or loss. yes _ yes yes

1.5 (vi) Basis for related party transactions- a statement of all related yes yes yes yes
party transactions should be disclosed in the annual report.

1.5 (vii) Utilization of proceeds from public issues, rights issues yes yes yes yes
and/or through any others instruments.

1.5 (viii) An explanation if the financial results deteriorate after the yes yes _ yes
company goes for Initial Public Offering (IPO), Repeat
Public Offering (RPO), Rights Offer, Direct Listing, etc.

1.5 (ix) If significant variance occurs between Quarterly Financial yes yes yes yes
performance and Annual Financial Statements the
management shall explain about the variance on their
Annual Report.
 Banglalink
Condition no Title Compliance Status

2011 2012 2013 2014

1.00 Board of Directors yes yes yes yes

1.1 Board’s size: should not be yes yes yes yes

less than 5 (five) and more
that 20 (twenty)
1.2 (i) Independent Directors: At least yes yes yes yes
one fifth (1/5) of the
total number of directors in the
company’s board shall
be independent directors.
1.2 (ii) a) Shareholding less than one yes yes - yes
percent (1%) shares of the
total paid-up shares of the
company;
1.2 (ii) b) Any sponsor or director or shareholder who holds one yes _ yes yes
percent (1%) or more shares of the total paid-up shares
of the company on the basis of family relationship.

1.2 (ii) c) Any other relationship, whether pecuniary or otherwise, _ yes yes
with the company or its subsidiary/associated
companies;

1.2 (ii) d) who is not a member, director or officer of any stock yes yes yes
exchange;

1.2 (ii) e) who is not a shareholder, director or officer of any member yes _ yes yes
of stock exchange or an intermediary of the capital market;

1.2 (ii) f) who is not a partner or an executive or was not a partner or yes yes _ yes
an executive during the preceding 3 (three) years of
any statutory audit firm;
1.2 (ii) g) who shall not be an independent director in more than 3 yes _ yes yes
(three) listed companies;

1.2 (ii) h) who has not been convicted by a court of competent yes yes _ yes
jurisdiction as a defaulter in payment of any loan to a bank or
a Non-Bank Financial Institution (NBFI);
1.2 (ii) g) who shall not be an independent director in more than 3 yes _ yes yes
(three) listed companies;
1.2 (ii) h) who has not been convicted by a court of competent yes yes _ yes
jurisdiction as a defaulter in payment of any loan to a bank or
a Non-Bank Financial Institution (NBFI);
1.2 (ii) i) who has not been convicted for a criminal offence involving yes yes yes yes
moral turpitude.
1.2 (iii) the independent director(s) shall be nominated by the board yes yes yes yes
of directors and approved by the shareholders in
the Annual General Meeting (AGM).
1.2 (iv) the post of independent director(s) can not remain _ yes yes
vacant for more than 90 (ninety) days.
1.2 (v) the Board shall lay down a code of conduct of all Board _ yes yes yes
members and annual compliance of the code to be recorded.
1.2 (vi) the tenure of office of an independent director shall be yes _ yes yes
for a period of 3 (three) years, which may be extended
for 1 (one) term only.

1.3 (i) Qualification of Independent Director: Independent yes yes yes yes
Director shall be a knowledgeable individual with
integrity who is able to ensure compliance with financial,
regulatory and corporate laws and can make meaningful
contribution yes to business.

1.3 (ii) The person should be a Business Leader/Corporate yes yes yes yes
Leader/Bureaucrat/University Teacher with Economics or
Business Studies or Law background/Professionals like
Chartered Accountants, Cost & Management Accountants,
Chartered Secretaries. The independent director must have
at least 12 (twelve) years of corporate
management/professional experiences.

1.3 (iii) In special cases the above qualifications may be relaxed yes yes _ yes
subject to prior approval of the Commission.
1.4 Chairman of the Board and Chief Executive Officer: The _ yes yes _
positions of the Chairman of the Board and the Chief
Executive Officer of the companies shall be filled by
different individuals.
1.5 The Directors’ Report to Shareholders _ yes yes yes
1.5 (i) Industry outlook and possible future developments in yes yes yes Yes
the industry.

1.5 (ii) Segment-wise or product-wise performance. yes _ yes Yes

1.5 (iii) Risks and concerns. yes yes yes Yes

1.5 (iv) A discussion on Cost of Goods sold, Gross Profit Margin yes yes yes _
and Net Profit Margin.

1.5 (v) Discussion on continuity of any Extra-Ordinary gain or yes _ yes Yes
loss.

1.5 (vi) Basis for related party transactions- a statement of all _ yes yes Yes
related party transactions should be disclosed in the annual
report.
1.5 (vii) Utilization of proceeds from public issues, rights issues yes yes yes Yes
and/or through any others instruments.
1.5 (viii) An explanation if the financial results deteriorate after the yes yes _ Yes
company goes for Initial Public Offering (IPO), Repeat
Public Offering (RPO), Rights Offer, Direct Listing, etc.
1.5 (ix) If significant variance occurs between Quarterly Financial yes yes yes Yes
performance and Annual Financial Statements the
management shall explain about the variance on their
Annual Report.
 We have worked with the 2 telecom industry c
sector of Bangladesh and analyzed with the
Corporate governance policy which the
company provided. Here most of the telecom
industy followed policy. Finally we have seen
that their share or stock prices was high before
the declaration of Corporate governance policy.
But after this, their share or stock prices
become low for a limited time. Later their share
or stock prices become high because their
reputation rises for following corporate
governance policy
Any questions?
Thanks All