Independent directors of listed companies should move boldly to protect general investors' interests, said market regulators and professionals.
They made the observation at a seminar titled "The role of independent directors to protect the interest of minority shareholders" organised by Dhaka Stock Exchange at a hotel in the capital on Tuesday.
The discussion focused on the state of corporate governance in Bangladesh with a call for independent directors' proper role in the boards of different public companies.
Prof Md Helal Uddin Nizami, commissioner of the Bangladesh Securities and Exchange Commission (BSEC), was present at the event as the chief guest.
He said the independent directors of listed companies should keep a deeper attachment with regulators to better play their roles with courage.
AKM Ziaul Hasan Khan, chief regulatory officer of the DSE, said if the statutory auditors and independent directors did not overlook corporate activities and the reports that misled general shareholders, scams like Satyam Computers in India or Enron in America would not happen.
An independent director, who must not be a shareholder or a related party to the company, is appointed to oversee all the activities and disclosures of the organisation so that general shareholders' interest is best protected, according to the Corporate Governance Code for the listed companies.
However, the independent directors needed a strong will to act properly in the boards, said DSE Director Minhaz Mannan Emon.
"Otherwise, only the governance code alone cannot protect the interests of minority shareholders," he said.
Reasons behind insufficient role of independent directors Masud Khan, a prominent professional accountant and a corporate veteran, pointed out the reasons behind the poor role of independent directors.
The appointment process of independent directors is the key reason among many others, he said.
Besides, directors' knowledge of business is an important factor.
They should be a knowledgeable person and should have good business knowledge, he said.
Poor remuneration for attending board meetings is also believed to be another reason.
In India, there are many experienced professionals who earn over one crore Indian rupee each year for their services to public companies as independent directors.
But, in Bangladesh, it was too poor for a sound professional, said chartered accountant Snehashish Barua.
He also called for regulators' intervention when an auditor or independent director is fired for their role that goes against the interest of the company.
The seminar was a part of observing the second day of World Investor Week 2019.
A number of senior BSEC and DSE officials along with independent directors at various public companies took part in the discussion.
The BSEC as an "A" category member of the International Organization of Securities Commissions is leading the programmes to increase awareness about investors' rights and interests.