BSEC warns of action as most listed firms fail to appoint women independent directors

Over 62% of listed companies have failed to appoint at least one woman independent director to their boards, despite the extended deadline of December 2025 set by the Bangladesh Securities and Exchange Commission (BSEC). The commission has warned that regulatory action will be taken against non-compliant firms.

Speaking at a roundtable held at the Institute of Chartered Accountants of Bangladesh (ICAB) in the capital today (11 December), BSEC Commissioner Farzana Lalarukh said that only 138 out of 360 listed companies have appointed women independent directors. Even though the deadline was extended to 31 December, most companies have yet to meet the mandatory requirement.

According to a gazette notification issued on 29 April 2024, every listed company was required to appoint at least one woman independent director by 29 April 2025. Many companies failed to meet this target, prompting the extension of the deadline to 31 December 2025.

Lalarukh highlighted several long-standing weaknesses in corporate governance, saying that many companies still do not have a properly appointed company secretary, while some even attempted to designate their CFOs for this role – an unacceptable and non-compliant practice. 

"Many non-compliant companies behave like 'backbenchers.' BSEC has become a babysitter; we want to act as a true regulator," she added.

The roundtable titled "Advancing Inclusive Governance – Independent Directorship" was jointly organised by the ICAB and the International Finance Corporation (IFC). 

ICAB President NKA Mobin, FCA, presided over the programme, while Jerin Mahmud Hossain, FCA, chairman of ICAB's Gender Inclusion and Leadership Committee (GILC), moderated it.

Commissioner Lalarukh emphasised that family values and social norms significantly influence women's leadership, which affects board-level representation. In many family-owned companies, independent directors have limited scope to act effectively due to weak compliance, inadequate training, and low governance standards. However, companies with stronger governance frameworks allow independent directors to perform their duties properly.

She also noted that BSEC is working to create a strong pool of women independent directors and may consider some flexibility in appointment criteria if enough qualified candidates are available. She stressed the importance of enhanced training, especially for directors of family-run listed companies who often face weak compliance frameworks.

Syed Mahbubur Rahman, MD & CEO of Mutual Trust Bank, highlighted delays in BSEC approvals for independent director appointments and called for greater transparency and regulatory flexibility.

Syed Nasim Manzur, managing director of Apex Footwear, said, "Independent directors play a crucial role in protecting minority shareholders. The presence of women enhances board diversity and effectiveness. Boards must be truly diversified and empowered to ensure compliance and drive profitability."

ICAB President NKA Mobin said, "The rule preventing independent directors from chairing audit committees after three consecutive terms should be reviewed. At least one finance or Chartered Accountant–qualified independent director should be present on each board. Mandatory director training is also essential, as many directors still lack clarity on ESG reporting and their fundamental roles as independent directors."

Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) President Kamran T Rahman emphasised the need for training, saying, "Women independent directors strengthen gender balance and diversity on boards. BSEC's required documentation is often excessive and should be simplified. Training for all directors is crucial, as many still lack a clear understanding of their responsibilities."

Institute of Chartered Secretaries of Bangladesh (ICSB) President Hossain Sadat said, "Director appointments must be based on professional competence, free from political or family influence. Independent directors should have opportunities to provide feedback and speak at AGMs to enhance transparency and accountability."

Economic Reporters Forum (ERF) President Doulot Akter Mala added, "Current eligibility criteria for independent directors are too strict and should be more flexible. Boards should also move toward a 50:50 gender ratio to ensure inclusivity."

Farzana Chowdhury, MD & CEO of Green Delta Insurance, noted that individuals involved in family businesses often have strong leadership abilities. While their formal education may be limited, their experience is significant. Therefore, special provisions should be made to allow them to serve as independent directors.

When asked why companies struggle to appoint a woman independent director, Riad Mahmud, newly elected chairman of Bangladesh Association of Publicly Listed Companies (BAPLC) and MD of National Polymer, said that companies are genuinely trying to comply with BSEC rules, but implementation is challenging. 

He explained, "Even if a qualified candidate is available, many hesitate to take on the role. For those interested, meeting all requirements is often difficult. If the rules are slightly relaxed, many companies would comply more easily."

IFC ESG Officer Lopa Rahman highlighted that gender-diverse boards are directly linked to strong governance and improved financial performance. Global evidence shows that companies with women in leadership generally perform better in financial metrics and governance standards.

Sanzida Kasem, FCA, managing partner of A Kasem & Co and a member of ICAB's GILC, presented the latest ICAB survey results. She noted that currently, 21 women chartered accountants serve on boards across nine sectors, and 134 additional women FCAs are fully prepared for independent director roles. Moreover, 75% of ICAB's women members hold postgraduate degrees, reflecting strong educational and professional depth. ICAB has also built a robust pipeline of future women leaders ready to contribute effectively at the board level.

Both ICAB and IFC emphasised that increasing women's participation as independent directors is not just a compliance requirement but a strategic opportunity to improve governance, strengthen board oversight, and enhance long-term corporate performance.

The organisations also reaffirmed their commitment to continue collaboration with regulators, professional bodies, corporate leaders, and development partners. Their focus includes: Expanding board appointment opportunities for qualified women. Supporting structured governance and leadership training programs.

Establishing a transparent, merit-based national pipeline of independent directors, open to both men and women, to promote inclusive and effective corporate governance across Bangladesh.