Kalpo's Blog

Digital Signature electronically authenticates the author of any document. It encrypts documents with digital codes which is almost impossible to duplicate. For example, a CEO can provide approval to any project through email with digital signature. Digital Signature ensures that the email is not altered in the way and the CEO cannot deny his approval. Digital Signature Industry of Bangladesh Digital Signatures are provided by Certifying Authorities (CA). As Bangladesh Economy is growing and getting digitized, need of digital security is also increasing. Here is the current situation. 2011: Digital signature is controlled by Controller of Certifying Authorities(CCA) that was established in 2011 . National Information & Communication Technology Policy- 2009 provides directions to introduce Digital Signature earlier. It is regulated by Information and Communication Technology (Amended) Act, 2006. 66% vs. 6 : A research revealed that internet adoption in business will be...

Digital Economy refers to the new economy which is based on information communication and computer technology. It is also called Internet Economy. Everything is going digital. Earlier there was giant computers on big rooms. Now we use smart technology products as hand band, mobile, tab, glasses etc. Presence of digital infrastructures and widespread adoption of technologies in daily life is transforming our work, entertainment, education, transportation, communication, healthcare and business. This changes brought new phase of economy which is called digital economy. Significance of Digital Economy Digital Economy has opened new horizons. Now you can work for an American firm sitting in Bangladesh. Technology brings us closer in terms of ease of communications. It also opens millions of windows of innovations and opportunities. A website now can earn a billion and generates thousands of jobs. Even you can get your dream project funded by crowd with the help of internet. Dig...

Bangladesh is the 8 th most populated country in the world. Having 536 billion GDP (PPP) and around 170 million people, the country is the 31 st largest economy of the world. But the country’s economy is growing at more than 5% since 2004. So, how will be the economy of Bangladesh in 2050? In recent study titled “ The World in 2050 - Will the shift in global economic power continue ” projected the followings: Bangladesh will be the 23 rd largest economy in 2050 in terms of GDP PPP The country’s GDP might be $1,291 billion in 2030 which is more than double compared to $536 billion of 2014 The GDP might be $3,367 billion in 2050 which is more than 6 times compared to 2014 PWC researched 32 country's economy which contributes 84% of whole world’s GDP. Bangladesh is one of the eight countries included in this research for the first time. Here are some other projections: World’s economy might grow at average 3% per year in the period 2014 to 2050. Though the growth...

I conducted a survey on 2010 for my graduation research. A part of the survey was focused on investors' role in corporate governance in Bangladesh. The investors are directly affected by the corporate governance. They also have responsibilities. Here I have described the survey findings. Investors Attending AGM or EGM It is surprising that only 14% of the respondents attended any AGM or EGM and only 2% ever voted for electing or removing directors. It indicates that most of the investors don’t have interest in performing their roles or responsibilities in corporate governance. Their only motive is earning money. They hardly care about the performance of the companies. Participation in Initial Public Offerings The respondents were assumed to be secondary market participant but 84% of them were found also active in primary market. Not only they use their own BO account for applying in Initial Public Offer (IPO) but also they operates multiple BO accounts in others names. On average e...

As my graduation internship report, I did a research to find out whether the market price of equities is sensitive to corporate governance or not. If the investors rely on fundamental analysis then corporate governance should affect equities’ price. A set of declarations and their impact on equities price were surveyed among a sample of 100 investors. This research didn’t focus on degree of impact of corporate governance on equities price. They survey findings are illustrated below. Trading Experience 51% of the respondents stated that they started investing in stock market less than one year ago. On the other hand 32% started between 1 to 3 year ago and 17% started more than 3 years ago. That shows that last year there was huge interest in investing in stock market. Average Investment Average investment of the respondents is 445,760.50 and mode value is 200,000. These indicate tight portfolio of most of the investors. Tight portfolio is believed to have a more risk propensity as inves...

Inception of Corporate Governance In Bangladesh, Corporate Governance is relatively new idea. The first initiative was taken by a private consulting firm, Bangladesh Enterprise Institute (BEI), in August 2003 when it conducted a diagnostic study in this field. Based on the study, the BEI published the corporate governance code for Bangladesh in March 2004. Subsequently the Institute of Chartered Accountants of Bangladesh (ICAB) came up with principles and rules to be followed. In January 2006, the SEC issued an order for complying with a number of governance codes. However those conditions are imposed on ‘comply or explain’ basis. The companies listed with any stock exchange in Bangladesh should comply with those conditions or shall explain the reasons for non-compliance. One reason for the slow progress in adopting corporate governance in Bangladesh is that most of the listed companies in Bangladesh are owned by family members or peers. The owner becomes the chief executive officer an...

Private university industry of Bangladesh experienced a boom within first 20 years as the rise of universities accelerated. In 2013, the total number of private universities was 79, with 10 new private universities waiting for approval from government in 2014. Opportunities of  private university industry of Bangladesh Due to political instability private universities have better image than public universities Public universities cannot fulfill the demand of higher education In order to get social recognition, top most business entrepreneurs becoming interested to be the members of the Board of Trustees. As a result donors’ donation can be utilized in quality improvement of various sectors Most of the private universities are in commercial area Most of the private universities have less number of full-time faculties Education standard of private universities is increasing Projects and assignment assigned to the students are more practical and realistic Course Cu...

Agency Problem in Bangladesh Agency problem is very common in Bangladesh. It might be inherited in our culture. Most of the young people interested in govt. jobs are looking for secured a job with less challenges in daily work life. They don't want a goal oriented or target driven work environment. Though there are many exception, like defense. law enforcement, local administrative jobs etc. National private companies have mixed job environment. Many organizations are still in primitive stage. They pay the least amount to employees when labor union is very uncommon. Practice of good corporate governance and tools of agency problem reduction is getting evolved in leading group of companies. There is a long way to go in this issue. Agency Theory Under the Principal-Agent theory there is a trade-off between incentives and risk sharing. Managers are motivated to work hard through “high powered” incentives. They are also protected from risk through “low-powered” incentives. For example,...

The edifice of corporate governance includes, among others, board composition, relationship between the board and the management, internal control mechanisms, independent audit committee etc. The OECD principles of corporate governance cover six key areas of corporate governance – Ensuring the basis for an effective corporate governance framework; The corporate governance framework should promote transparent and efficient markets, be consistent with the rule of law and clearly articulate the division of responsibilities among different supervisory, regulatory and enforcement authorities. The rights of shareholders; The corporate governance framework should protect and facilitate the exercise of shareholders’ rights. The equitable treatment of shareholders; The corporate governance framework should ensure the equitable treatment of all shareholders, including minority and foreign shareholders. All shareholders should have the opportunity to obtain effective redress for...

Corporate governance is relatively newer idea in Bangladesh. It became an area of huge interest worldwide after collapses of few giant firms. Ill practice in accounting is one of the main sources of bad corporate governance which ultimately hamper the investors’ interest. Corporations are republics. The ultimate authority rests with voters (shareholders). These voters elect representatives (directors) who delegate most decisions to bureaucrats (managers). There is widespread evidence that good corporate governance is associated with greater firm performance. It is positively correlated with operating performance, market valuation, and dividend payout. the direction of causality is likely to flow from corporate governance to performance rather than the other way round. Numerous studies also find that more specific governance attributes, such as board structure, are associated with higher firm performance. Bangladesh is an emerging economy. The stock market of Bangladesh is said to be re...

Private universities of Bangladesh started functioning in 1992. The industry has gone through continuous growth over the period. Many new organizations came forward with new universities. Political, Economic, Social & Technological analysis of the industry is described here. Political and Legal Environment Political leaders for their own benefit sometime exploit the students. Public universities’ students are the target group of political leaders. Those universities are so much politicized that for example, exams cannot occur in time. The student cannot pass their exam in time. In this aspect private universities are in much better truly they don’t have any external political influence. This one of main reasons that the students are becoming interested for private university day by day. Economic Environment To set up a private university a big amount of money should be deposited to the government fund. And private universities are fully dependent the donor’s donation and the money ...