Corporate Governance Practices in Private Commercial Banks-A Study on Khulna City
International Journal of Economic Behavior and Organization
Volume 2, Issue 3, June 2014, Pages: 37-48
Received: Jun. 24, 2014; Accepted: Jul. 14, 2014; Published: Jul. 30, 2014
Views 3177      Downloads 432
Shanta Kar, Business Administration Discipline Khulna University Khulna-9208, Bangladesh
Mithun sarker, Pubali Bank, Limited, Dhaka, Bangladesh
Article Tools
Follow on us
Corporate governance (CG) is an important effort to ensure accountability and responsibility and is a set of principles, which should be incorporated into every part of the organization. Financial institutions like banks have a significant role to play in the economy of any country. Banking sector should follow the Corporate Governance codes for Bangladesh. So, this paper has tried to evaluate the present scenario of Corporate Governance practices by the private banks in Bangladesh. The study has been conducted to attain some objectives. The primary objective of the study is to evaluate the practices of Corporate Governance codes by the Private Commercial Banks of Bangladesh. In order to do the study, the major issues were focused like rights and disclosure of information, disclosure and transparency, board issues, disclosure and transparency, financial reporting and HRM practices.7 hypotheses have been developed in order to identify whether the private banks are complying corporate governance issues or not. And making the study convenient an assumption was made using subjective probability technique that 70% or more of private banks of Bangladesh are maintaining 90% or more CG codes for Bangladesh (Alam, K, 2011). Only 50% of the major issues like disclosure and transparency, financial reporting and audit practice have met the assumption. Of which 100% of the CG codes regarding financial reporting are practiced by the 70% or more private banks and it was 83.33% for audit practice. In contrast the major issues of CG codes namely shareholders’ rights and disclosure of information, board issues and HRM issues are not properly exercised by the private banks. It follows that rights of shareholders are despoiled by the private banks the reason why only 60% of the issues have been met by 70% or more private banks. Likewise the board and HRM issues have also failed to meet the assumption. In these two cases the conformance percentages were 60% and 50% correspondingly. Consequently the study recommends some approaches that are well thought out for the practice of corporate governance codes by the private commercial banks of Bangladesh.
Corporate Governance, Hypotheses, Private Banks, Khulna City
To cite this article
Shanta Kar, Mithun sarker, Corporate Governance Practices in Private Commercial Banks-A Study on Khulna City, International Journal of Economic Behavior and Organization. Vol. 2, No. 3, 2014, pp. 37-48. doi: 10.11648/j.ijebo.20140203.12
Alam, K (2011), “Evaluation of Corporate Governance Practices by the Banking Sector of Bangladesh”, A Research Study Report, Available at SOMBA Seminar Library, Khulna University, Khulna, pp. 3.
Arun, T.G. and J. Turner (2003), “Corporate Governance of Banks in Developing Economies: Concepts and Issues”, Corporate Governance: An International Review, Vol. 12, No. 3, pp. 371-377.
Cadbury Committee, (1992), "Report of the Committee on the Financial Aspects of Corporate Governance", Gee Publishing, London, U.K.
Clarke, R. (1988), “Remarks in Comptroller of the Currency News Release”, No. NR88-5,Washington DC.
Douglas A. Lind, William G. Marchal, “Statistical Techniques in Business and Economics”, Fourteenth Edition, pp. 146-147.
Fama,E. and M. Jensen (1983), “Separation of Ownership and Control”, Journal of Law and Economics, Vol. 26, pp. 301-325.
Gupta, S. P. and M. P. Gupta (2006-2007), “Business Statistics”, New Edition, Sultan Chand & Sons, New Delhi, India, p. 506.
Greuning, H. and S. Bratanovic (2003), “Analyzing and Managing Banking Risk: A Framework for Assessing Corporate Governance and Financial Risk”, World Bank, Washington DC.
Jensen, M.C. and Meckling, W.H. (1976), “Theory of the Firm Managerial Behavior, Agency Costs and Ownership Structure”, Journal of Financial Economics, Vol. 3 No. 4, pp. 305-360.
Kocourek, P. F, (2003), “Corporate Governance: Hard Facts about Soft Behaviors”, Strategy & Business, Issue 30, First Quarter.
Mamtaz and Yusuf, (2005), “Corporate Governance: Bangladesh Perspective”, The Cost and Management, Vol. 33 No. 6 November-December 2005, pp. 18-26.
Principles of corporate governance, OECD, 2004, OECD publications service, France
W.G. Zikmund, (2010-2011), “Business Research Method”, Eighth Edition, pp. 395-396.
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186