BSEC extends female independent director appointment deadline to Dec

Amid the failure of some companies, the Bangladesh Securities and Exchange Commission (BSEC) has extended the deadline by eight months for listed companies to appoint at least one female independent director to their boards.

To comply with the corporate governance code issued by the regulator, listed companies were mandated to appoint one female independent director in their board by 29 April this year.

After the expiration of the stipulated time by around three months, on 29 June, the regulator allowed the extension up to December. So, listed companies will get around five months to comply with the guideline. 

An official at the Bangladesh Association of Publicly Listed Companies (BAPLC) said that they had earlier applied to the commission to reconsider the issue, as many companies are struggling to find skilled and qualified women to appoint to their boards. 

"In addition, there is a restriction allowing one female to serve on the boards of a maximum of five listed companies," he added. 

Corporate governance code stipulates, "At least 2 directors or one-fifth (1/5) of the total number of directors in the company's board, whichever is higher shall be independent directors; any fraction shall be considered to the next integer or whole number for calculating number of independent directors.

"Provided that the board shall appoint at least one female independent director in the board of directors of the company."

A gazette notification published on 4 April mandating the decision to be complied with within 1(one) year from the date of issuance of this notification.

In a letter to the BSEC chairman and taskforce, BAPLC wrote to the commission, "We propose to keep the provision of the number of independent directors as like as earlier one-fifth of the total number of directors and seeking waiver from the compulsion of appointing at least one female independent director."

It said, "There are many listed companies that are maintaining a minimum board with one independent director. They run their businesses profitably with name and fame. The amendments now require that each company have a minimum of two independent directors including one female. Appointing additional independent director will be cumbersome, cost intensive for those companies and will also pose a barrier to their business operations."

"Moreover, availability of the competent/qualified female Independent Directors is another challenge. This provision was included to promote gender diversity and improve corporate governance, however, the shortfall of qualified female directors and their unavailability will illustrate a contrasting/reverse scenario, the proposal reads.