Corporate governance essential for sustainable economic growth: Minister

Commerce Minister Khandakar Abdul Muktadir has described corporate governance as an essential foundation for sustainable economic development, institutional transparency and greater business competitiveness.

"Corporate governance is no longer merely a matter of legal obligation or regulatory compliance; rather, it is one of the key preconditions for an institution's long-term sustainability, investor confidence and a responsible business environment," the minister made the remarks while speaking at the "13th ICSB National Award 2025 for Corporate Governance Excellence," organised by the Institute of Chartered Secretaries of Bangladesh (ICSB) at a city hotel on Thursday night.

He said financial success alone, without good governance and accountability, cannot ensure the sustainable progress of any organisation.

In a fast-changing global business environment, an organisation's success cannot be judged by profit or financial growth alone, the minister noted. Transparency, accountability, ethical leadership and responsible decision-making are equally important, he added.

Effective corporate governance, he said, plays a vital role in running organisations by balancing the interests of shareholders, board members, management, employees, customers, creditors, regulators and other stakeholders.

The commerce minister said the practice of good governance must not be confined to private institutions, and its effective application must also be ensured in public institutions and service delivery systems.

Establishing transparency and accountability in both public and private sectors would boost public confidence and bring dynamism to investment and economic activities, he added.

Expressing concern over weak corporate governance in the country's banking sector, Muktadir said measures such as limiting the number of board members and restricting representation of members from the same family were once introduced to ensure transparency in bank management.

However, subsequent changes and relaxation of those policies weakened governance in the sector, affecting the financial stability of several banks, he said.

Highlighting the importance of consumer protection in banking, he said financial institutions operate on the money and trust of customers, yet there is a lack of an effective and independent ombudsman system to protect their rights and interests.

He stressed the need to strengthen corporate governance and effective oversight to ensure the resolution of customer complaints, fair redress and sustained trust in financial institutions.

Identifying administrative complexities as a major obstacle to creating an investment-friendly environment, the minister said delays in obtaining licences, approvals and clearances at various stages of starting and running a business, along with a lack of coordination among different agencies, were discouraging investors.

Many investors come to Bangladesh seeing its potential but lose interest within a short time because of such hurdles, he observed.

To overcome the situation, he emphasised simplifying public services, digitalising administrative processes and reducing the need for direct interaction with service seekers.

A technology-driven and transparent service system would reduce scope for irregularities and make doing business easier, he said.

Praising the ICSB's initiative, the minister said the awards, which recognise organisations achieving excellence in corporate governance, are playing an important role in nurturing a culture of integrity, professionalism and accountability in the country.

He said the honour is not only a recognition of institutional success but also an acknowledgement of ethical leadership, responsible management and commitment to good governance.

Congratulating the awardees, he said their achievements would inspire other organisations to follow best practices in governance.

Commending the ICSB's 16 years of activities, Muktadir said the organisation is playing a significant role in promoting corporate governance and enhancing professional skills in the country.

He said the government is actively considering the organisation's demand for further strengthening the ICSB's institutional position under the Companies Act.

The minister expressed hope that the Ministry of Commerce and the ICSB would continue to work together to spread a culture of good governance in the corporate sector.

Muktadir later handed over the "13th ICSB National Award 2025 for Corporate Governance Excellence" to representatives of various organisations that achieved excellence in corporate governance.