Concept of Independent Director in South Asian Developing Countries: The Case of Banking Sector in Bangladesh

Abstract

Purpose: The study aims to identify the perception of the independent director in Bangladesh's banking sector and the concept and implications in different developing countries and international standards by reviewing existing literature justifying theoretical contribution. Methodology: Listed 32 banks of Dhaka Stock Exchange are included as a population where 36 respondents from 6 listed banks as a broad stakeholder group are interviewed through convenience and snowballing technique. The study is descriptive with content analysis to justify the understanding of previous studies about the independent director. Findings: Considering Bangladesh as a South Asian developing country, this study indicates differences in corporate governance infrastructure, independent director policies and practices with family orientation, policy coordination and implementation related to other developing countries of South Asia, and international standards. Moreover, the findings expressed somewhat different perceptions and challenges independent directors faced in an actual situation in Bangladesh's banking sector. Practical Implication: This study might help identify the accurate perception of the independent directors and trends and challenges in Bangladesh's banking sector. The report might guide code formulators and policy coordinators to understand why and how the policies addressing independent directors' rules and responsibilities should look in Bangladesh's banking sector. Originality: There is no such previous study highlighting this issue. Now it urges the need to understand the perception of the concept of independent director among the broad stakeholder groups of the banking sector of Bangladesh to identify whether the actual scenario and policies are aligned or questionable. Limitations: This paper includes a small number of respondents which should not be the case. Here, only the listed 32 banks of DSE are included as a population where 36 respondents from 6 listed banks as a broad stakeholder group are interviewed through convenience and snowballing technique which is not mentioned here as the data has confidentiality issue and is not found in the archival.