Corporate Governance in Bangladesh

A TRW Law Firm Guide for Boards, Founders, CFOs, and Global Investors

Corporate governance is how strategy becomes stewardship. It is the system of rules, relationships, and practices by which a company is directed and controlled—so capital is allocated wisely, management is accountable, risks are known (and priced), and disclosures win the confidence of lenders, investors, and regulators. For more than a decade, TRW Law Firm has helped boards across Bangladesh—and cross-border groups with operations here—design, operationalize, and continually improve governance that stands up to auditors, ratings agencies, and stock exchanges. As Bangladesh’s largest cross-border firm, with on-the-ground teams in Dhaka and coverage across London and Dubai, we bring an uncommon blend of local fluency, international standards, and execution scale.

This guide distills what “good governance” looks like in Bangladesh, how it connects to law and regulation, what boards should do quarter by quarter, and how TRW structures engagements so your governance is practical, audit-ready, and investor-grade.

What Corporate Governance Really Means (and Why It Pays)

At its core, governance aligns purpose → strategy → oversight → disclosure. When it works, you get lower borrowing costs, faster regulatory approvals, stronger valuations, and greater resilience in crises. When it fails, even good businesses suffer: disputes escalate, financing stalls, and auditors insist on costly remediation.

Good governance delivers five concrete advantages:

🟩 Better capital access: Lenders and investors price certainty. A board that can evidence controls, policies, and committee work unlocks cheaper money.
🟩 Deal readiness: Diligence goes quicker, reps and warranties become narrower, and integration risk falls.
🟩 Regulatory trust: File once, right—avoid circular queries, hold-ups, or penalties.
🟩 Crisis posture: Clear escalation lines, tested continuity plans, and a trained incident team.
🟩 Talent magnet: Ethical culture, fair rewards, and transparent growth paths attract and retain top managers.

The Governance Landscape in Bangladesh (Plain-English Map)

Corporate governance in Bangladesh is grounded in statutory and regulatory frameworks that vary with company type and sector. In practical terms, boards interact with:

• Companies Act & RJSC practice (incorporation, registers, meetings, resolutions, filings).
• Stock-market regulation (for listed issuers: corporate governance code, audit & nomination/remuneration committees, insider lists, PSI controls, related-party disclosures).
• Tax & VAT regimes (board oversight of compliance and public-interest reporting).
• Foreign exchange rules (Bangladesh Bank reporting for capital, dividends, royalties, and services).
• Sector regulators & investment authorities (BIDA/BEZA/BEPZA, telecom, power, financial services, etc.).
• Emerging expectations around ESG, data protection, cybersecurity, whistleblowing, and human rights in supply chains.

TRW monitors law/circulars, updates client calendars and templates, and recalibrates board packs so your oversight stays current without adding noise.

Governance Architecture: The Building Blocks

1) The Board of Directors

• Role: Stewardship of strategy, risk, capital, and culture; appointment, evaluation, and succession of the CEO and key executives; approval of significant transactions.
• Composition: Skills matrix (finance, operations, industry, legal, technology, risk). For listed/regulated entities, independence thresholds and fit-and-proper criteria apply.
• Information rights: Robust, timely management packs; dashboards that blend financial, operational, risk, and compliance KPIs.
• Evaluation: Annual board and committee self-assessments; periodic external evaluation for listed or larger private groups.

2) Board Committees (Typical)

• Audit Committee: Financial reporting integrity, internal controls, internal audit plan and independence, external auditor liaison, whistleblowing & investigations.
• Nomination & Remuneration (NRC): Board/leadership skills, appointments, succession, and pay architecture aligned with long-term value.
• Risk Committee: Enterprise risk appetite, registers, stress tests, capital and liquidity oversight (often integrated with Audit for smaller companies).
• ESG/Sustainability: Non-financial reporting, climate and social risk oversight, supply-chain human rights and anti-corruption posture.

TRW designs charters, annual work plans, reporting lines, and meeting cadences so committees actually reduce risk rather than generate paperwork.

3) Policies & Codes (Board-Approved, Staff-Lived)

• Code of Conduct & Ethics (with conflict-of-interest and gifts/hospitality rules).
• RPT (Related-Party Transactions) Policy (approval thresholds, pricing, and disclosure).
• Insider Trading & PSI Controls for listed issuers; Disclosure Policy for all.
• Delegation of Authority (DoA) mapping who can commit the company and how.
• Risk Management & Internal Control Framework, including BCP/DR (business continuity/disaster recovery).
• Anti-bribery & Corruption, Whistleblowing, Data & Cybersecurity, Supplier Code (especially for export/manufacturing).

4) The Control Environment

• Internal Audit: Risk-based plan, independence (reporting line to Audit Committee), and follow-up tracking.
• Internal Controls over Financial Reporting (ICFR): Process maps, control matrices, walkthroughs, and testing cycles.
• Compliance Function: Regulatory mapping, returns calendar, and exception escalation.
• Risk Function: Heat maps, scenarios, KRIs, and risk appetite statements approved by the board.

5) Disclosure & Engagement

• Financial reporting that reconciles tax/VAT and FX evidence with the GL.
• Non-financial reporting (ESG/ sustainability) aligned to investor expectations.
• Stakeholder communication—from lenders and institutional investors to employees and suppliers—with consistent, pre-approved lines.

TRW’s Governance Operating Model (How We Make It Real)

Design → Paper → Implement → Assure → Improve.

1. Design: We run a targeted diagnosis—board structure, policies, committees, control maturity, and disclosure practices—against your size/sector/ambition. Output: a “Governance Architecture Blueprint” with now/next/later actions.
2. Paper: Charters, policies, codes, and DoA drafted with cross-references; resolutions and board minutes that evidence intent and authority.
3. Implement: Committee calendars, management pack templates, risk registers, ICFR control matrices, and whistleblowing channels.
4. Assure: Internal audit plan, testing of key controls, remediation trackers; pre-audit health checks ahead of year-end.
5. Improve: Annual board/committee evaluations; policy refreshes; training for executives and “control owners.”

Because TRW is a full-service cross-border firm, we integrate governance with company secretarial (RJSC filings), tax/VAT, FX reporting, and transactional workstreams. One team, one tracker, one record of truth.

Governance by Company Stage

Early-Stage / Founder-Led

• Right-sized structure: A small but skilled board; basic Audit remit (controls, cash, related-party hygiene).
• Essential policies: Code of Conduct; DoA; RPT; anti-bribery; vendor onboarding controls.
• Cadence: Quarterly board; monthly management pack; “light” risk register.
• Value unlock: Cleaner cap table actions, simpler investor diligence, better cash discipline.

Growth / PE-Backed

• Committees: Formal Audit and NRC; working Risk register and internal audit co-sourced.
• Remuneration: Performance-aligned pay and ESOP oversight; succession planning.
• Data & cyber: Strengthened change management and access controls.
• Value unlock: Refi at better pricing, smoother bolt-on acquisitions, faster closes.

Listed / Regulated

• Independence & committee compliance per the governance code.
• ICFR maturity: Documented process narratives, testing, remediation SLA.
• PSI & insider controls: Blackout calendars, deal teams, and approvals.
• ESG: Non-financial metrics integrated into risks and disclosures.
• Value unlock: Stable market perception, fewer regulator queries, better ratings.

The Board Calendar: A Bangladesh-Tuned Template

Q1 (Year-start)
🟩 Approve annual plan and KPIs; refresh risk appetite.
🟩 Internal audit plan and ICFR testing scope.
🟩 Committee charters and DoA review.

Q2
🟩 Strategy deep-dive (capex, M\&A, financing roadmap).
🟩 ESG and supply-chain review (human rights, environment).
🟩 Mid-year risk scenarios and stress tests.

Q3
🟩 Succession planning; NRC review of remuneration structures.
🟩 Data/cyber posture test; BCP/DR exercise.
🟩 Policy refresh (RPT, whistleblowing, anti-bribery).

Q4 (Year-end)
🟩 Year-end close plan; pre-audit health check.
🟩 Board and committee evaluations; training needs.
🟩 AGM/EGM planning and disclosure timetable.

TRW supplies agendas, minute templates, and management pack checklists for each meeting so nothing falls through the cracks.

Related-Party Transactions (RPT): The Audit Magnet

RPTs are legitimate but risky: they blur lines between corporate and personal interests. A defensible RPT framework includes:

• Policy & thresholds: What needs prior approval; what’s prohibited; pricing evidence.
• Process: Conflict declarations; independent director review; committee recommendation; board approval; shareholder approval where required.
• Disclosure: Notes to the financial statements; exchange filings for listed issuers.
• Monitoring: Quarterly RPT register with variance analysis.

TRW drafts the policy, sets up the register, trains finance/legal, and helps design forms so every RPT leaves a clean evidence trail.

Internal Controls Over Financial Reporting (ICFR): From Paper to Practice

A credible ICFR framework is grounded in process maps (order-to-cash, procure-to-pay, record-to-report, treasury, payroll, capex), key controls (segregation of duties, reconciliations, approvals, access), and testing cycles. We help you:

• Identify key risk statements (what could go materially wrong).
• Map control owner → control → evidence.
• Run walkthroughs and operating effectiveness tests.
• Track findings → remediation → re-test.

Outcome: fewer audit surprises, faster closes, and better lender confidence.

Culture, Ethics, and Speak-Up

Ethics is measurable—by hotline volume, resolution times, trend analyses, and survey data. We operationalize culture through:

• Code of Conduct with practical scenarios.
• Whistleblowing: independent intake (hotline/email), non-retaliation, investigation SOP.
• Training for managers and high-risk roles (procurement, sales, finance).
• Metrics to the Audit Committee: case types, closure days, root causes, and remediation.

ESG & Sustainability: From Compliance to Advantage

Governance is the “G” inside ESG. Boards should ensure:

• Materiality assessment links environmental & social risks to strategy.
• Supply-chain due diligence for labor standards and anti-corruption.
• KPIs and targets integrated into management incentives where appropriate.
• Disclosure discipline: what you publish must reflect systems you operate.

TRW builds ESG governance that is practical for Bangladesh operations and credible to global investors.

Data, Privacy, and Cybersecurity

Boards increasingly own cyber risk—breaches are financial, legal, and reputational events. We implement:

• Data governance framework (classification, retention, access).
• Security policies & technical standards dovetailed with IT practice.
• Incident response plan with roles, legal privilege strategy, and disclosure triggers.
• Third-party risk management for vendors with system access.
• Board dashboards: leading indicators and incident post-mortems.

Family-Owned Groups: Professionalizing Without Losing Soul

Many Bangladeshi champions are family-owned. We help professionalize governance while preserving founder DNA:

• Balanced board: Independent perspective plus family stewardship.
• Clear boundaries: RPT discipline, dividend policy, and capital allocation rules.
• Succession: Criteria, development plans, and emergency contingencies.
• Family charters that align generational aspirations with corporate needs.

Cross-Border Groups: One Company, Many Jurisdictions

When Bangladesh is part of a regional or global footprint:

• Harmonize charters & policies with HQ standards—translate them to Bangladesh practice.
• Manage permanent-establishment (PE) risk via clear service agreements.
• Align FX proof & tax documentation so remittances and dividends move cleanly.
• Consolidate reporting—financial and non-financial—without overloading local teams.

TRW’s Dhaka–Dubai–London mesh lets us solve conflicts between home-jurisdiction policies and Bangladesh realities quickly.

What “Best Practice” Looks Like (Boardroom Snapshot)

• A skills-matrix board with independence where required and meaningful debate.
• Committee calendars tied to a living risk register and internal audit plan.
• Clean RPT and DoA frameworks; zero “shadow authority.”
• CFO dashboards unifying financials, tax/VAT, FX, and controls status.
• Crisis playbooks rehearsed; cyber tabletop exercises executed.
• Quarterly investor-grade packs combining financial and ESG signals.
• Board evaluation outcomes driving next-year training and refresh.

TRW Engagement Models (Built for Outcomes)

1) Governance Health Check (4–6 weeks)
A diagnostic against law/regulation and international norms. Deliverables: gap map, prioritized action plan, and quick-win policy suite (RPT, Code, DoA).

2) Board & Committee Build-Out (6–10 weeks)
Charters, work plans, calendars, management-pack templates, and induction/training; whistleblowing and investigation SOP; risk & ICFR starter kits.

3) Assure & Improve (Quarterly/Annual)
Internal audit plan (co-sourced), ICFR testing, pre-audit checks, board/committee evaluation, policy refresh, and crisis tabletop.

4) Governance for Transactions
Pre-IPO uplift, M\&A diligence & remediation, lender/rating-agency readiness, and disclosure choreography.

Pricing is transparent: fixed fees for design/build; retainers for operate/assure; ring-fenced budgets for transactions.

TRW in the Room: Why Clients Pick Us (and Stay)

• Scale & speed: Bangladesh’s largest cross-border bench means we can stand up the right team—governance, CS, tax/FX, disputes—without delay.
• Standards that travel: We translate UK/US/EU standards to Bangladesh practice, so multinationals get coherence without over-engineering.
• Paper that proves: Our minutes, charters, policies, and registers are built to satisfy auditors, regulators, and exchanges.
• Execution discipline: One tracker, one data room, one set of proofs—across governance, secretarial, tax/VAT, and FX.
• Problem-solvers: We’ve regularized legacy issues—from missing registers to messy RPTs—without disrupting operations.
• Board-friendly style: Clear options, crisp risks, and an implementation plan you can monitor.

Frequently Asked Questions (FAQs)

Q1: How many independent directors do we need?
This depends on your listing/sector status and applicable governance code. TRW calibrates independence thresholds and committee memberships to your facts.

Q2: We’re private—do we still need committees?
Yes, scaled appropriately. Even a combined Audit/Risk committee with a simple work plan significantly improves control discipline and lender confidence.

Q3: What is the one policy we should adopt first?
A robust Delegation of Authority (DoA) with RPT hygiene. These two alone prevent most avoidable governance failures.

Q4: Can TRW act as our corporate secretarial manager?
Yes. We integrate board/committee work with RJSC filings, registers, and calendars—so governance and compliance move together.

Q5: How do we start building ICFR?
Map key processes, assign control owners, define evidence, and test quarterly. TRW provides templates and co-sourced testing capability.

Q6: How do we handle whistleblowing sensitively?
Independent intake, clear investigation SOPs, and non-retaliation in practice (not just on paper). Audit Committee receives anonymized metrics and remediation reports.

Q7: What does a good board pack look like?
Concise dashboards, trend lines, risks and mitigations, policy exceptions, and decisions required—with appendices for deep dives. TRW templates keep meetings focused.

How to Start With TRW

Most clients begin with a Governance Health Check and a Board Calendar. Within a quarter, you have functioning committees, a tested whistleblowing channel, a live risk register, and cleaner board minutes. Within a year, you should be investor-grade: ready for bank syndication, PE diligence, or a listing roadmap.

Explore our wider corporate practice at TRW Law Firm – Corporate & Commercial.

TRW Contact & Global Presence

Contact Numbers
+8801708000660
+8801847220062
+8801708080817

Emails
info@trfirm.com
info@trwbd.com
info@tahmidur.com

Global Law Firm Locations

• Dhaka: House 410, Road 29, Mohakhali DOHS
• Dubai: Rolex Building, L-12 Sheikh Zayed Road

Summary Table — Corporate Governance by TRW

Final Word

Great governance is not bureaucracy—it is decision speed with proof. It turns board time into value, reduces the cost of capital, and keeps your license to operate secure. TRW builds governance that is lived by management and trusted by regulators and investors, backed by the largest cross-border legal platform operating from Bangladesh. When you are ready to move from compliance to competitive advantage, we are ready to lead.

This guide is for general information only and is not legal advice. For tailored advice, please contact TRW.