Disclosure of Corporate Governance Compliance of State Owned Commercial Banks in Bangladesh and Stakeholders’ Expectation

Abstract

This paper aims to find the extent of Disclosure of Corporate Governance Compliance of State OwnedCommercial Banks (SOCBs) in recent years in Bangladesh. Dichotomous and Partial compliance method areused to find out the compliance of corporate governance notification provided by Bangladesh Securities andExchange Commission (BSEC) and Bangladesh Bank (BB) by SOCBs). Annual reports of 2013 for four StateOwned Commercial Banks one of which is listed in Dhaka Stock Exchange (DSE) have been used to conductthis study. Firstly, 95 disclosure variables from Bangladesh Securities and Exchange Commission (BSEC)notifications and 73 disclosure variables from Bangladesh Bank (BB) Corporate Governance Guidelines havebeen identified as disclosure variables. Secondly, 95 variables from BSEC have been converted into 7 mainvariables and 73 variables from BB have been converted in to 3 main variables. Then to find compliance statusof notifications of SOCBs provided by BSEC and BB cross tabulation and descriptive statistics are presented byusing SPSS. The results of the study conclude that compliance of corporate governance notification by SOCBs inBangladesh is not satisfactory. In case of, disclosure of corporate governance compliance notifications issued byBSEC we have found that it is 59% in Dichotomous Approach and 54% in Partial Compliance Approach. In caseof disclosure of corporate governance notifications issued by BB it is 37% according to Dichotomous Approachand 29% in terms of Partial Compliance Approach. It is also found that there is no separate notification based onstate owned concept for SOCBs in Bangladesh. Lack of corporate governance in SOCBs in Bangladesh is alsoone of the reasons of recent financial scam in SCOBs. This research will be helpful to minimize this sort of scamin the banking sectors in countries like Bangladesh. This study will create values not only to those state ownedcommercial bank’s authorities but also to the other stakeholders who are related to banking sector in BangladeshKeywords: Corporate Governance, BSEC, BB, Compliance, Disclosure