University of Dhaka

Department of International Business

Assignment -1
Assignment on corporate governance and view of EXIM
bank
Course: Corporate Governance

Prepare for:
Dr. Chowdhury Saima Ferdous
Professor
Dept. Of International Business
University of Dhaka

Prepare by:
Group Fusion
MBA 11th Batch
Dept. Of International Business
University of Dhaka

Date: January 27, 2019

 Group Profile
Name Id Contribution
Khaza Mainuddin 19 Defination of CG
Rana Molla 20 Defination of CG
Md. Bahar Uddin 22 Basel III & CG
Md. Arif Hossain 23 EXIM Bank CG and accumulation
Mehedy Mubasher 24 EXIM bank CG

Contents
What is corporate governance? ...................................................................................... 3
BASEL Guideline for corporate Governance of bank ................................................... 4
Corporate governance and EXIM Bank ......................................................................... 5
A decade ago, the term ‘corporate governance’ was barely heard. Today, like climate
change and private equity, corporate governance is a staple of everyday business
language and capital markets are better for it.

What is corporate governance?

1. Corporate governance is, “the framework of rules, relationships, systems and
processes within and by which authority is exercised and controlled in corporations.”
It encompasses the mechanisms by which companies, and those in control, are held to
account.

2. Corporate governance influences how the objectives of the company are set and
achieved, how risk is monitored and assessed, and how performance is optimized.
Effective corporate governance structures encourage companies to create value,
through entrepreneurialism, innovation, development and exploration, and provide
accountability and control systems commensurate with the risks involved (ASX
Corporate Governance Council, 2nd Edition).

3. Corporate governance is the system by which companies are directed and

controlled. Boards of directors are responsible for the governance of their companies.
The shareholders’ role in governance is to appoint the directors and the auditors and
to satisfy themselves that an appropriate governance structure is in place (ICAEW).

4. The act of steering, guiding and piloting—describes what boards [should] do when
in session. It does not describe and is not a proxy for the board itself, nor any other
party or activity outside the boardroom. Regulators (to set rules), proxy advisers
(lobbyists on behalf of shareholders and other interests), and shareholder meetings
(communications) are all important, but none is corporate governance. (Peter Crow,
On ‘corporate governance‘: Is our understanding flawed?, 9/12/2015)

5. Corporate Governance refers to the way a corporation is governed. It is the

technique by which companies are directed and managed. It means carrying the
business as per the stakeholders’ desires. It is actually conducted by the board of
Directors and the concerned committees for the company’s stakeholder’s benefit. It is
all about balancing individual and societal goals, as well as, economic and social
goals.
6. Corporate Governance is the interaction between various participants (shareholders,
board of directors, and company’s management) in shaping corporation’s
performance and the way it is proceeding towards. The relationship between the
owners and the managers in an organization must be healthy and there should be no
conflict between the two. The owners must see that individual’s actual performance is
according to the standard performance. These dimensions of corporate governance
should not be overlooked.

7. Corporate Governance deals with the manner the providers of finance guarantee
themselves of getting a fair return on their investment. Corporate Governance clearly
distinguishes between the owners and the managers. The managers are the deciding
authority. In modern corporations, the functions/ tasks of owners and managers
should be clearly defined, rather, harmonizing (“Parch Juneau”, Reviewed by
Management Study Guide).

BASEL Guideline for corporate Governance of bank

Effective corporate governance is critical to the proper functioning of the banking
sector and the economy as a whole. While there is no single approach to good
corporate governance, the Basel Committee's revised principles provide a framework
within which banks and supervisors should operate to achieve robust and transparent
risk management and decision-making and, in doing so, promote public confidence
and uphold the safety and soundness of the banking system.

The Committee's revised set of principles supersedes guidance published by the

Committee in 2010. The revised guidance emphasizes the critical importance of
effective corporate governance for the safe and sound functioning of banks. It stresses
the importance of risk governance as part of a bank's overall corporate governance
framework and promotes the value of strong boards and board committees together
with effective control functions. More specifically, the revised principles:

 expand the guidance on the role of the board of directors in overseeing the
implementation of effective risk management systems;
  emphasize the importance of the board's collective competence as well as the
obligation of individual board members to dedicate sufficient time to their
mandates and to keep abreast of developments in banking;
 strengthen the guidance on risk governance, including the risk management
roles played by business units, risk management teams, and internal audit and
control functions (the three lines of defense), as well as underline the
importance of a sound risk culture to drive risk management within a bank;
 provide guidance for bank supervisors in evaluating the processes used by
banks to select board members and senior management; and
 Recognize that compensation systems form a key component of the
governance and incentive structure through which the board and senior
management of a bank convey acceptable risk-taking behavior and reinforce
the bank's operating and risk culture.

Corporate governance and EXIM Bank

Exim bank is doing well. They want to assure that the right of each and every
shareholder are guaranteed and investment is safeguarded here. The bank always
targets quality growth. The qualitative and quantitative information presented in this
Bank are ample proofs of their ability and resilience in difficult situation.

Exim bank corporate governance follow classical two tire management system. They
have director and independent director as well. Chairman of the bank mostly focus on
shareholder interest and try to ensure good governance in every system.

The net asset value per share of the bank was BDT 19.58 in 2017 which was BDT
18.74 in 2016. Return of equity and other key parameters were also good. Net profit
after provision and tax stood BDT 3298.43 million in 2017 which was BDT 3039.76
in 2016. Earing per share in 2017 was also higher than that of previous year...

They have also maintain capital adequacy ratio well above the required level. This
year they are putting more stretch on collecting low cost deposit arresting non
performing investment, prudent risk management practice, more fee based income,
more diversification of the investment and making our human resource more trained
and technically developed so that they can outshine their past achievement,
Investment deposited ration was within the required level. Chairman of EXIM bank
said, “Our aim is not to suffer liquidity crisis and on the other hand, not to keep
surplus fund idle.

EXIM bank are continuously develop their compliance and follow BASEL III and
Bangladesh bank Guideline. Exim bank develop green banking policy for sustainable
development and taken care of environment. They believed that someone is sitting in
the shade today because someone planted tree a long time ago.

CSR activity of Exim bank also very vast. Donating money among refugees,
rehabilitate the pirates of the coastal area into normal socio economic life, donate
minister relief fund and also in education sector.

This organization proves the sustainability of its growths by its steady progression
along vertical and horizontal line. In 2017 the bank expanded its business to fresh
areas across the opening 5 new branches.

The number of deposited amount account increase by 12.03% in 2017 from the
previous years.

Export Import bank of Bangladesh Limited popularly known as EXIM Bank is a

comprehensive Islamic financial institution that combines the Islamic values with the
highest levels of banking services; a leading banking organization that offers its
clients the best of services and personalized products to meet and exceed their
expectations; and a fully-fledged entity that reassures clients of the continued integrity
of its Islamic products reflecting one constant philosophy – "Solid Principles,
Innovative Solutions".

Since its commencement in the year 1999, the Bank strives untiringly to reflect
diversity, modernity, justice and transparency in every single service it has offered. A
comprehensive array of Sharia-compliant banking solutions is modernly formulated
through a growing network of 113 branches located throughout the country and 2
foreign outlets- one in United Kingdom (the fully owned subsidiary company of
EXIM Bank as well as the first entity of any private commercial bank from
Bangladesh in UK) and another one in Canada, while always striving to develop
services and update products in accordance with the Islamic rules. Moreover, a
comprehensive range of banking finance solutions and customized Islamic programs
(i.e., 72 deposit products & 46 investment products) are offered for medium to large
sized businesses to serve this very important category. Moreover, EXIM Islamic
Investment Ltd. (EIIL)-another subsidiary company of the Bank has also been formed
towards development of sound and solid ground for organized capital market in
Bangladesh.

They work to make things easier for our customers – whether individual savers or
large enterprises – and at the same time to build confidence in a highly complex
system. Those two goals converge in the common ground of trust. And as they win
and sustain the trust of all our stakeholders, the services they provide become
inherently more valuable.

Solid financial results are only part of the story - in fact, without our customers there
wouldn't be much of a story to tell. They have learned over the years that our
customers enjoy interacting with our team members. They believe, it is very important
to provide a work environment where they can focus on growing our team. They
invest many hours into our training program, focusing on personal growth and
learning and understanding new rules and regulations and making the employees
understand about the importance to work as a team. Our current theme is "Together
towards Tomorrow" to encourage our team to take personal responsibility for their
attitudes, words and actions.

EXIM Bank is very much responsive and interested to involve themselves both
directly and indirectly with the development process of the banking industry and
national economy. As they believe the development of small and medium-size
enterprises plays a pivotal role in the growth and prosperity of a nation. Although
large-scale corporations, particularly industrial concerns contribute sizably/ largely in
Gross Domestic Products (GDP) and other economic variables of prosperity but the
significance of SMEs is widely recognized around the globe. SMEs make a
substantial contribution towards GDP, revenue collection in the form of taxes,
fostering entrepreneurship culture, employment opportunities, income generation,
skills development of human resources, poverty alleviation, and improving the
standard of living and quality of life. Above all the prime economic benefits of SMEs
development include encouraging perfect competition and fair distribution of wealth.
If there are only large-scale corporations either, then there will be a monopoly in an
industry, with a single suppliers, or oligopoly with only few suppliers, or
monopolistic competition with only some suppliers, then the major portion of national
income and wealth will move within the hands of big capitalists. SME sector,
however, begets fair competition and equitable distribution of wealth.

In a word, EXIM bank are performing for their all stakeholder interest and that’s why
they are improving in doing business.
Reference

1. Corporate Governance Principles and recommendations with 2010

Amendments, ASX Corporate Governance Council, 2nd Edition).
2. http://www.eximbankbd.com/report/baseliii_2017.pdf
3. https://www.bis.org/publ/bcbs294.pdf