Listed cos say few female candidates up for board positions

Listed companies are yet to comply with the mandatory provision of appointing at least one female independent director in their boards but they put the blame on lack of eligible candidates.

Only a handful of organisations among those listed, including BRAC Bank, have already hired women in the position of independent director. Nearly 360 more listed firms need at least 360 female candidates by April next year to serve as independent director in the organisations.

Talking to the FE, representatives of several companies said the regulatory obligation to hire women in the independent director positions was an additional challenge facing them amid a scarcity of competent or qualified female candidates especially in the corporate sector.

A senior official of Eastern Bank Ltd, requesting not to be named, said the bank must expect banking-related intellectual inputs from an independent director. Female candidates, who may be able to play the role, are hard to find, he added.

Moreover, listed companies are not allowed to appoint someone who has been working for any of their corporate clients.

Also, the companies, which have become infamous for corrupt practices and scams, will find it even more difficult to hire women amid the shortage of candidates.

Preferring anonymity, a senior official of the Bangladesh Association of Publicly Listed Companies (BAPLC) said the association would request the recently-formed task force to waive the requirement.

"We are in favour of gender equity, but the reality is different," said Riad Mahmud, a former vice president of BAPLC and managing director of National Polymer Industries.

However, Managing Director of Berger Paints Rupali Chowdhury said the companies should compromise on the eligibility criteria but hire women for the sake of gender equality.

Qualifications sought after

The eligibility criteria set for the positions of independent director is the same irrespective of gender.

Companies search for candidates who have 10 years' experience working as a business promoter or director or have worked as a top executive not below the position of managing director or chief executive officer in any non-listed firm having a paid-up capital of at least Tk 100 million.

Any former female official of government or statutory or autonomous or regulatory body, who served in a position not below 5th grade, or who worked as university teacher with at least a bachelor degree in economics or commerce or business studies or law, meets the requirement for hiring.

Female advocates who have practised law in the High Court, or worked as chartered accountant, chartered financial analyst, or certified public accountant can also be appointed as independent director in a listed company.

The BAPLC officials said the number of non-listed companies having a paid-up capital of Tk 100 million or more is not significant. Also, those who have been a director of a company with default records will not qualify. Female teachers of the business and economic faculties of Dhaka University will not be as many as required for the position of independent directors in listed firms.

Ruling out the concern, Ms Rupali said companies should consider female teachers of other public and reputed private universities too.

Why hiring of women mandatory

A study by the International Finance Corporation (IFC) in 2022 revealed that the boards of Bangladeshi listed firms had 18 per cent female representation, highest in South Asia.

However, the country still was behind the global average of 19.7 per cent.

Insiders say most of the companies in Bangladesh are family oriented and owners place female family members in the boards, which is the reason for high women representation.

While women constituted 19 per cent of the board members of listed companies in 2023, independent women directors accounted for 6 per cent only.

The IFC, Dhaka Stock Exchange (DSE), UN Women and the United Nations Global Compact have been jointly organising programmes to promote female participation in the boards of listed firms.

Waseqa Ayesha Khan, a former state minister for finance, said in a programme last year that all listed companies should have at least one female independent director for bridging the gender gap in corporate entities.

The securities regulator was also keen on ensuring gender equality.

In November last year, the Bangladesh Securities and Exchange Commission (BSEC) amended the provision of appointing independent directors, including the requirement of hiring women.

As per the revised provision, at least two directors or one-fifth of the total number of directors in a company's board, whichever is higher, shall be independent directors, with the condition that the board shall appoint at least one female independent director.

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