Poor corporate governance and a lack of quality manpower are major barriers to foreign investment in Bangladesh, analysts said yesterday.
Bangladesh has huge potential but still the country is suffering from a lot of barriers, said Daisuke Arai, country representative of Japan External Trade Organisation (JETRO).
“Lack of corporate governance is the biggest barrier in Bangladesh for Japanese investors.”
The government should address the issues to attract foreign investors, Arai said while addressing a seminar on the “Role of corporate governance in investment decision making with Japanese stakeholders”.
International Finance Corporation (IFC), a member of World Bank Group, organised the seminar with Japanese stakeholders at hotel Amari Dhaka.
The number of Japanese companies in Bangladesh increased 10 times to 269 in 10 years, said Takeshi Ito, deputy chief of mission at the Japanese embassy in Bangladesh.
In a welcome address, Takeshi said Bangladesh should prioritise issues of corporate governance to make the environment more investment friendly.
Investors want healthy balance sheets to decide in investing into a company, said Khalid Qadir, CEO of the Brummer and Partners.
Accounting systems need to be improved to bring transparency in balance sheets, he said.
He said there was a culture of investors making investment in an attempt to get dividend, as if dividends were their only right.
A cultural shift is needed among investors alongside that in focus on building the best corporate governance practices in the board, he added.
In the seminar, one from the audience raised a question on whether independent directors were playing their due role in boards.
In response, Swapan Kumar Bala, member of the Bangladesh Securities and Exchange Commission, said it was a challenge for independent directors to work independently.
He questioned whether the regulator can do anything if independent directors do not play their due roles willingly.
The condition of corporate governance has much improved in the past one decade, he said. Board and management of business firms should work to improve governance, said ASM Mainudding Monem, deputy managing director of Abdul Monem Ltd.
He said the education system needs to be developed for generating skilled manpower.
The seminar was held in two sessions. The first, “Corporate governance practices in Bangladesh-investor perspective”, was moderated by Sanaa Abouzaid, senior corporate governance officer of IFC.
The second, “Challenges of family businesses in improving corporate governance practices in Bangladesh”, was moderated by Tareq Rafi Bhuiyan, secretary general of the Japan-Bangladesh Chamber of Commerce and Industry.