Bangladesh did remarkably well in achieving its Millennium Development Goals (MDGs). Our strategic focus now is on the Sustainable Development Goals (SDGs) adopted by the UN General Assembly on September 25, 2015 as MDGs' successor to have a poverty and hunger-free peaceful planet.  There are 17 goals and 169 targets set in the UN resolutions to be achieved by countries by end of 2030. Goal number five of the resolution calls for achieving gender equality and empowerment of all women and girls. Nine targets have been set under this agenda. Target five requires countries to 'ensure women's full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life'. 
Developing women leadership and ensuring their effective participation in different spheres of the society call for political commitments, legislative support and pro-women attitude. In this context, leadership of women in corporate world deserves special attention. Women around the world are very poorly represented in decision-making levels of structured business organisations. Different countries are, therefore, pursuing policies to address the problem. The issue requires no mention for countries like Bangladesh. Women represent around 50 per cent of our population. Almost 35 per cent of our students at tertiary level are female. But in terms of leadership in economic, social or political arena, they lag far behind their male counterparts. Development in business or economy like other social sectors will not be sustainable unless we bring this vast segment of our population to the front. Under the SDG, we are committed to ensuring their full and effective participation and equal opportunities for leadership at all levels. But as the saying goes, "You can't make unequal equal by treating them equally. You have to act unequal to make them equal". This is why we need policy intervention to pull up those who are lagging behind.  
In Bangladesh, we are driving strategies to remove impediments to women entrepreneurship development. Specific policies, including easing their access to finance, special incentives for women entrepreneurs, etc. are in place to help them in their efforts for business ventures and integrate them in the economic process. However, our fiscal, regulatory and strategic policies are mostly directed towards economic empowerment of women through small and micro entrepreneurship. It is at the same time important that we design policies that ensure women empowerment and their involvement in decision-making in corporate forms of business as well. Policy to bring in gender diversity in the corporate boards is one of the ways we can demonstrate our commitment to give equal opportunities to women in decision-making at corporate level. 
In the Anglo-American model of corporate governance, the board of directors is the highest level of decision-making authority. The formation and functioning of the board, including eligibility of the members, is determined by the relevant law which in our case is the Companies Act 1994 and for banking and non-banking financial institutions (NBFIs) the Banking Companies Act 1991. Additionally, for listed companies, there are codes of corporate governance issued by Bangladesh Securities and Exchange Commission which provide guidelines as to size, composition, qualifications and disqualifications of the members of the board of directors.  None of the statutory provisions currently in force in the country contains any directives as to the issue of gender diversification, not to talk of gender equality in the board of corporate bodies. Despite the fact that the listed companies in Bangladesh are predominantly owned and controlled by family, there is little representation of women in boards of the companies. It should be mentioned here that as per Banking Companies Act, no director can continue his office of directorship for a continuous period of maximum six years. Consequent to this, sponsors of such companies, in order to maintain their family dominance, often transfer the shares in the name of their close relatives like wife or daughters. It might be due to this reason that female members are more visible in the boards of banking companies as compared to other companies. 
Under the existing law, directors are elected by shareholders through voting in the annual general meeting.  Given the level of development of female entrepreneurship in the country and the fact that the number of female entrepreneurs lag far behind their male counterparts, it is most unlikely that gender diversity in the boards of companies can be brought in through the normal process and without policy intervention requiring preferential treatment for women.  
The codes of corporate governance issued by Bangladesh Securities Exchange Commission (BSEC) initially in 2006 on comply-or-explain basis and subsequently making it mandatory in 2012 for the listed companies of Bangladesh require, among others, inclusion of Independent Directors (IDs) in the boards of the companies. According to the corporate governance code, at least 20 per cent of the members of the board should be IDs who hold preferably no shares in the company or if they hold at all, it is less than 1.0 per cent of the shares outstanding. It also lays down the qualification and disqualification of the IDs. But there is nothing in these codes as to the representation of women. A provision of minimum women quota could have been in line with our commitment to empower women and give them the opportunity for leadership in the decision-making process at corporate level.  A small survey carried out by this scribe among 32 companies listed with Dhaka Stock Exchange reveals that out of 57 independent directors appointed in the board complying with BSEC's code of corporate governance, only four are female members. It can be safely concluded without any detailed survey that the percentage of females in corporate boards of listed companies will be much lower than the same as aforesaid if all directors are taken into account. 
The issue of gender diversity in the board is a much-discussed issue even in developed and developing countries. Regulatory authorities of different jurisdictions are trying to inject more female members in the corporate boards. Up to 2010, women represented only 11.9 per cent of the total board members of large-scale listed companies in the European Union (EU). From 2003 to 2010, rate of growth of women in the board was only 0.03 per cent. The EU took the issue of equality between men and women as a political agenda and in 2011 they called for self-regulatory measures by companies to increase percentage of female members in the board. After reviewing that the progress is not satisfactory and self-regulatory measure did not work, one year later in 2012, the EU Commission drafted law requiring companies to improve gender diversity of the boards. The law requires 40 per cent mandatory quota for women in the boards of companies. The UK has voluntary quota of 25 per cent for all FTSE companies. The number of female directors in the Malaysian listed companies was 8.3 per cent in 2013 when the government initiated a programme to improve the gender diversity of the board and set a target to achieve 30 per cent representation by the end of 2016. Just one year after initiating the programme women members in the boards of Malaysian companies rose to 12.5 per cent. 
In India, female representation in the boards of companies listed in the National Stock Exchange (NSE) was 5.5 per cent in 2010 which almost doubled by 2015 to 11.2 per cent. India introduced a law that requires at least one female director in the boards of the companies which were effective from January 2015. The latest statistics shows that 12.8 per cent of all directors of NSE-listed 1,624 companies are women. In 2016, almost 76 per cent of the NSE-listed 500 companies have at least one woman director in the board. 
It is evident that policy-induced approach is necessary to bring women to the decision-making levels of the companies even in the developed countries. In the context of our socio-economic and cultural perspectives, low level of managerial or decision-making positions held by female members in the formal corporate sectors and the barriers faced by them to reach the decision-making levels, the need for such a policy is more intensely felt to achieve the goal of gender equality and women empowerment. The government is now drafting a new Companies Act. The code of corporate governance issued by Bangladesh Securities and Exchange Commission is also in the process of revision. It is, therefore, high time for our policymakers to consider the issue of   gender diversity in the corporate boards of the country.
Jamal Ahmed Choudhury FCM is the President of the Institute of Cost and Management Accountants of Bangladesh (ICMAB). jacmamun@gmail.com
  [Read More]

—–
Source: The Financial Express