197 companies fail to appoint women board members, BSEC keeps them under watch

A total of 197 listed companies in Bangladesh's stock market have failed to comply with the requirement of appointing at least one woman independent director in their boards, according to the Bangladesh Securities and Exchange Commission (BSEC).

Out of 360 listed firms, 163 companies (around 45%) have complied with the directive over the past one and a half years. However, another 66 companies have not responded to the regulator's directive at all.

Among the remaining companies, 131 firms have requested additional time from the Bangladesh Securities and Exchange Commission (BSEC) to comply with the requirement.

BSEC has instructed the non-compliant companies to complete the appointment of women independent directors by 30 June, 2026, in line with the Corporate Governance Code, 2018. The commission has also warned that legal action will be taken against companies that fail to meet the requirement within the deadline.

The instruction was reiterated in a meeting held with company secretaries of non-compliant listed firms. The meeting emphasised strict enforcement of the rule and urged companies to take immediate steps.

According to the amended gazette issued on 29 April, 2024, every listed company is required to appoint at least one woman independent director to ensure better governance and board diversity. Initially, companies were given one year to comply, which was later extended to December 2025. However, as several firms still failed to meet the requirement, the deadline has now been pushed further to June 30, 2026.

BSEC has urged companies to select qualified female professionals from diverse backgrounds for the role. Suggested categories include business leaders, corporate professionals, members of business associations, university teachers, government officials (serving or retired), professionals with relevant degrees, and lawyers from the High Court Division.

BSEC officials stated that increasing women's participation in corporate boards is essential for strengthening corporate governance. They believe it will improve transparency, accountability, and diversity in decision-making processes within listed companies.

At the same time, some market stakeholders argue that a shortage of experienced female professionals in certain sectors is creating challenges for companies. Many firms, especially in manufacturing industries, still operate under traditionally male-dominated board structures, making the transition slower.

However, experts counter that qualified female professionals are widely available in banking, insurance, academia, legal practice, and public administration. They argue that lack of initiative, rather than shortage of talent, is the main reason behind the delay.

BSEC Commissioner Farzana Lalarukh had earlier noted that many companies are still not complying with the mandatory requirement, indicating weak corporate governance practices. She also pointed out issues such as irregularities in appointing company secretaries and the dominance of family-controlled boards, which often limits the effectiveness of independent directors.

She further mentioned that social and family barriers also discourage women from taking leadership roles in corporate boards. The commission is working to develop a stronger pool of qualified women directors and is also considering possible flexibility in appointment policies if needed.

According to BSEC officials, some companies have not prioritised compliance, while using the excuse of not finding suitable candidates.

Industry observers note that ensuring women representation at the board level is not just a compliance requirement but a key part of effective corporate governance. It can improve risk management, ethical standards, and long-term strategic decision-making.

BSEC has already indicated that after 30 June, strict enforcement measures will be taken against non-compliant companies. These may include warnings, monetary penalties, and other administrative actions under securities laws.

Company secretaries attending the meeting were instructed to complete the appointment process within the deadline and formally report compliance to the commission.