To uphold accountability to shareholders, the stock market regulator has stipulated that a minimum of 25% of board members, including the chairman and managing director, must be physically present at the general meeting of a listed company.
The Bangladesh Securities and Exchange Commission (BSEC) took this directive on December 28 of the preceding year, mandating listed firms to conduct their annual general meetings (AGMs) and extraordinary general meetings (EGMs) with the physical presence of shareholders. The decision was prompted by the observation that a majority of companies were exclusively conducting their general meetings through digital platforms, contrary to BSEC directives, as per sources within the BSEC.
Rezaul Karim, the spokesperson for BSEC, emphasized, “In accordance with commission rules, companies are obligated to conduct general meetings both physically and online. Shareholders desiring physical attendance should have the option, and those opting for online participation should be accommodated. Ensuring corporate governance, shareholders must be provided the opportunity to express their views during the AGM. Companies failing to adhere to BSEC instructions will face necessary actions.”
On March 10, 2021, BSEC issued guidelines for AGMs and EGMs, introducing a hybrid system allowing listed firms to conduct meetings with both physical and online participation of directors and shareholders.
Sources within BSEC reveal concerns about companies neglecting the hybrid system due to a lack of supervision by stock exchanges. The commission is poised to inquire into the negligence of both the Dhaka and Chattogram bourses.
Insiders suggest that some companies exploit the opportunity to hold meetings online as a cover-up for irregularities. The avoidance of in-person meetings helps sidestep shareholder inquiries, particularly for companies accused of manipulations in the capital market.
In 2020, amidst the COVID-19 outbreak, the regulatory body had initially ordered companies to organize any type of meeting, including AGM and EGM, using online platforms. Anonymously, a member of the Bangladesh Association of Publicly Listed Companies highlighted the ease of shareholder participation and cost-effectiveness with digital platforms. He noted that companies sometimes pass agendas without allowing shareholder views via digital platforms, asserting that physical meetings prevent such avoidance.
