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The Regulatory Conundrum: Achieving Corporate Governance Reforms in Developing Countries

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Corporate Governance in Emerging Markets

Part of the book series: CSR, Sustainability, Ethics & Governance ((CSEG))

Abstract

Based on an extensive review of existing literature, the chapter attempts to identify some unique characteristics of the developing markets with a view to understanding whether such socio-political and cultural traits may actually act as deterrents to the ongoing globalisation efforts Bangladesh is used as an example to highlight the distinctive characteristics of socio-political environment existing in many developing economies. Overall analysis suggests that the developing countries are different than developed economies. The corporate governance infrastructure in countries like Bangladesh has elements of both shareholder and stakeholder perspective, but none of them alone could solve the unique governance issues prevailing in developing countries. Also, low audit fees appear to be major hindrance of quality audit.

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Notes

  1. 1.

    such as globalization, liberalization of market, demands of foreign investors.

  2. 2.

    The twelve standards are data dissemination, fiscal transparency, transparency in monetary and financial policies, banking supervision, securities market regulation, insurance supervision, payments and settlements, anti-money laundering, corporate governance, accounting, auditing, and insolvency and creditor rights (World Bank 2004).

  3. 3.

    The probe committee report mentioned that systematic failure had allowed massive manipulation of stock markets in Bangladesh in 2011, and identified the SEC, Dhaka Stock Exchange, the Investment Corporation of Bangladesh, issuers, valuers, and auditors as those who had colluded in ‘turning the market volatile’ (Yahoo News, April 7, 2011).

  4. 4.

    Companies Act 1994, Part (iv) 82. “Penalty for default in complying with Section 81 – If default is made in holding a meeting of the company in accordance with sub- section (1) of Section 81, or in complying with any directions of the Court under sub-section (2) thereof, the company and every officer of the company who is in default, shall be punishable with fine which may extend to ten thousand taka and in case of a continuing default, with a further fine which may extend to 250 taka for every day after the first day during which such default continues”.

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Author information

Authors and Affiliations

  1. Manchester Business School, University of Manchester, Manchester, UK

    Javed Siddiqui

  2. University of Dhaka, Dhaka, Bangladesh

    Chowdhury Saima Ferdous

Authors
  1. Javed Siddiqui
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  2. Chowdhury Saima Ferdous
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Correspondence to Javed Siddiqui .

Editor information

Editors and Affiliations

  1. Department of Accounting and Finance, Champagne School of Management (Groupe ESC Troyes en Champagne), Troyes, France

    Sabri Boubaker

  2. IPAG Research Lab, IPAG Business School, Paris, France

    Duc Khuong Nguyen

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Siddiqui, J., Ferdous, C.S. (2014). The Regulatory Conundrum: Achieving Corporate Governance Reforms in Developing Countries. In: Boubaker, S., Nguyen, D. (eds) Corporate Governance in Emerging Markets. CSR, Sustainability, Ethics & Governance. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-44955-0_18

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