Listed firms must appoint a female independent director
According to the gazette, the companies must comply with this directive within one year from the notification’s issuance date
From now on, all the listed companies have to appoint at least one female independent director to their board of directors.
The Bangladesh Securities and Exchange Commission (BSEC) has recently issued a gazette notification to this end. This move aims to promote gender diversity and enhance corporate governance.
According to the gazette, the companies must comply with this directive within one year from the notification's issuance date.
An independent director is a board member who does not have a material relationship with the company apart from board membership, ensuring unbiased and impartial decision-making.
Earlier in March this year, State Minister for Finance Waseqa Ayesha Khan said there should be at least one female independent director in each company listed on the country's stock market.
Then she said the government is working on women's development, and at the same time, the societal mindset towards women needs to change.
Earlier in November last year, the securities regulator issued a notification amending the rules regarding independent directors.
According to this notification, all listed companies must seek prior approval from the BSEC before appointing independent directors to their boards.
This appointment must follow the recommendation of the company's Nomination and Remuneration Committee (NRC).
The notification states that a minimum of two directors or one-fifth of the board members, whichever is greater, must be independent, and in compliance with all other applicable laws.
Additionally, individuals identified as defaulters in the latest Credit Information Bureau (CIB) report of Bangladesh Bank, due to nonpayment of loans, advances, or obligations to a bank or financial institution, will be ineligible for the role of an independent director.