Subject: Ethics and Corporate Governance (Spring 21)

Subject Code: HRM 512

Submitted By: Iftekharul Alam

Student Id: 202-14-3210

Department: Accounting

Program: M.B.A. (Regular)

Topics: Practices of Corporate Governance in the Education Sector of Bangladesh

Submitted To: Dr. Sheikh Abdur Rahim

Associate Professor, Department of Business Administration

Daffodil International University

Submission Date: 06.04.2021

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 Table of Content

Abstract……………………………………………………………………………………………………………………………………..3

I.INTRODUCTION………………………………………………………………………………………………………………………..3

II.RATIONALITY OF THIS STUDY…………………………………………………………………………………………………..4

III.OBJECTIVES AND METHODOLOGY OF THIS STUDY………………………………………………………………….4

3.1 What is Corporate Governance?..............................................................................................4

3.2 Corporate Governance Scenario in Bangladesh………………………………………………………………………5

3.3 Corporate Governance in education sector in Bangladesh………………………………………………………5

3.4 The Challenges of Governance of Education sector…………………………………………………………………6

IV.RESEARCH FINDINGS………………………………………………………………………………………………………………..7

4.1. School Managing Committee………………………………………………………………………………………………….7

4.2. Integrity Management…………………………………………………………………………………………………………..8

4.3. Internal Control……………………………………………………………………………………………………………………..8

4.4. Procurement………………………………………………………………………………………………………………………….8

4.5. Staff Administration……………………………………………………………………………………………………………...8

4.6. Admission of Students………………………………………………………………………………………………………..…9

4.7. Fund-Raising, Donations and Sponsorships…………………………………………………………………………...9

4.8. Recommendations…………………………………………………………………………………………………………….…10

V.CONCLUSIONS………………………………………………………………………………………………………………………….11

REFERENCES………………………………………………………………………………………………………………………………..11

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 Abstract
This study provides practice of corporate governance in education sector in Bangladesh and insights into
the good governance of the education sector. In this study I mainly focus on the secondary school. Roles
and responsibilities of the head of the institute and members of the school managing committee (SMC)
are discussed. The findings of the study are obtained from qualitative data and analyzing the content of
study of the school. This research has clearly emphasized the negative impact of corruption on the
education sectors especially, secondary schools due to the lack of good governance, reduction of the
efficiency of SMC, head teacher, distortion of the decision-making process and undermining of the social
value as well as the ethical phenomena. This paper suggests that good governance can serve as an entry
point to raising institutional performance in the delivery of education services.

I.INTRODUCTION
The smooth operation of a school is not only involved on the principal and a team of general supporting
staff, but also on the teachers who are assigned administrative duties. Schools are facing challenges on
rise of public expectation for good governance in their operations like any organization receiving
financial assistance from the government. It is therefore, imperative for those responsible persons for
the management of schools to ensure that there is good governance and adequate internal control in
the school’s operations. This study aims to practice of corporate governance in education sector and at
providing a user-friendly guide to help the schools to setup a structure with good governance and to
adopt internal control measures in their operations. Schools are advised to adapt the recommended
measures to suit their respective organizational structure, resource capability and operational
needs. Today, the demand for secondary education worldwide is soaring due to progress towards
universal primary school completion, large cohorts of young people searching for the key to a
better life, and the global demand for an increasingly sophisticated labor force. Of late the
administration system in secondary educational institutions is going on little bit following the modern
democratic approaches in which good governance is existing. Before discussing implementation
of good governance in the secondary schools let us introduce briefly about Bangladesh and its
education system. Bangladesh “The country of Bengal”, officially the People’s Republic of
Bangladesh, is a sovereign country in South Asia. It forms the largest and eastern portion of the ethno-
linguistic region of Bengal and located at the apex of the Bay of Bengal. Bangladesh bordered by India
and Myanmar and is separated from Nepal and Bhutan by the narrow Siliguri Corridor. Bangladesh
is the world’s eighth-most populous country, the fifth most populous in Asia and the third-most
populous among Muslim-majority countries(The Pearson concise general knowledge manual, 2012).
The official Bengali language is the tenth most spoken language in the world, which Bangladesh
shares with the neighboring Indian states of West Bengal and Tripura. Bangladesh has a large
educational system consisting of some 150,000 institutions, 34 million students and over 900,000
teachers(Karim, 2010). There are about 20 million students in the primary education (including
madrasas and non-formal programs) and 11 million at the secondary level (including madrasas)
(Rahman and Hoque, 2014). At university level, there are 35 public and 60 private
universities(Wikipedia, 2016). The nation has achieved an enviable near100% enrollment in primary
education, but, at the same time, the dropout rate is an alarming,50% by the end of the 5-year
primary cycle. It has been observed that a little over 1% of the students acquire the standard
competencies who complete the primary schooling. 25% of the primary graduates drop out at the

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initial stage of enrollment in the secondary education(Karim, 2010).ICTs have been identified as a
key enabler to address the quality component of the education. Attractive e-learning environments
in schools, and distance learning through TV, radio, mobile phones and internet will increase
retention. The government plans to make ICT education compulsory at the secondary level by
2013 and at primary level by 2021(GED, 2012). Teacher training will be increasingly decentralized
through the use of ICTs already in place at the Upazila Resource Centers for the primary education,
and model schools for secondaryeducation.

II.RATIONALITY OF THIS STUDY

Normally a question may arise, why good governance is important in the education sector? It is
because, the traditional modes of organizing and governing the education system will not sustain in the
21stcentury.Long-established forms of governance based on a system of publicly authorized,
funded and operated schools supported by the centrally defined norms and regulations are being
replaced by an array of arrangements of good governance, in which the government continues to
play a central role in steering and monitoring the system. Government and private sectors share
the funding and operation of the schools in the lower-level. Countries with reasonable success in
providing good governance in their secondary education to most of the young people, share four
common elements in governance: transparent and well-known regulations, a sharp definition of
responsibilities, strong public management, and a precise definition of outcomes and measurement
of results(World Bank, 2005).Moreover, secondary education systems now must be flexible and
responsive to the rapidly changing environment, balancing needs of the students with management
issues in the global information age. The outcome of this study may help to adapt the world
education system in Bangladesh by the implementation of good governance in the secondary
educational institutions.

III.OBJECTIVES AND METHODOLOGY OF THIS STUDY

The objectives of the study ensure transparence and accountability in the education sector, to identify
the parameter of good governance, and to examine its impact on the educational institutions.
Methodology in the research deals with the issues of data collection, data processing and data analysis.
It could be qualitative or quantitative or mixed in nature. In this paper, the research issue is studied
qualitatively and the work is accomplished through content analysis method.

3.1 What is Corporate Governance?

Different authors view the meaning of corporate governance differently. For example, one school of
thought describe corporate governance as a “system” by which companies are directed and controlled
(Cadbury and Greenbury Report, CFACG 1992); another school views corporate governance as
“structures and processes for decision making, accountability, control and behavior at the
governing body” (Public accounts and Estimates Committee, 2002); to others corporate
governance is about “finding ways” to ensure effective decision making (Pound 1995). But it must be
kept in our mind that the fundamental concern of corporate governance is to ensure the conditions
whereby a firm’s directors and mangers are held accountable, ensure better and effective protection to
all stakeholders. The World Bank argues that the framework of corporate governance should be based
on four “pillars” – of Responsibility, Accountability, Fairness and Transparency (RAFT).

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However, Kocourek (2003) believes that to counter the accounting, leadership, and governance
scandals, organizations are rushing to institutionalize corporate governance, which may be even be
counterproductive. The drive to more tightly regulate the membership and functions of corporate
boards is already encouraging companies to view governance as a legal challenge rather than a way to
improve performance. By reducing the critically important issue of corporate governance to what
amounts to box-checking exercise, corporate directors and senior executives are addressing the
symptoms, not the root cause, of the governance crisis. Kocourek states that governance begins at
home – inside the boardroom, among the directors. It is embedded in how, when, and why they gather,
interact, and work with one another and with management... in other words, the “soft” stuff. But
qualitative reforms to the behaviors, relationships, and objectives of the directors and CEO are
meaningless unless they are subject to the “hard” mechanisms of performance criteria, processes, and
measurement. According to Kocourek, this combination of soft and hard solutions can turn corporate
governance from vague concept into a means to deliver organizational resilience, robustness, and
continuously improved performance.

3.2 Corporate Governance Scenario in Bangladesh

Corporate governance practices in Bangladesh are quite absent in most companies and organizations. In
fact, Bangladesh has lagged behind its neighbors and the global economy in corporate governance
(Gillibrand, 2004). One reason for this absence of Corporate Governance is that most companies are
family oriented. Moreover, motivation to disclose information and improve governance practices
by companies is felt negatively. There is neither any value judgment nor any consequences for
corporate governance practices. The current system in Bangladesh does not provide sufficient legal,
institutional and economic motivation for stakeholders to encourage and enforce corporate
governance practices; hence failure in most of the constituents of corporate governance is witness in
Bangladesh. Poor bankruptcy laws, no push from the international investor community, limited or
no disclosure regarding related party transactions, weak regulatory system, general meeting scenario,
lack of shareholder active participations is some of the individual constituents that have been identified
by Mamtaz Uddin Ahmed and Mohammad Abu Yusuf in their research study “Corporate
Governance: Bangladesh Perspective” (Mamtaz and Yusuf, 2005).

3.3 Corporate Governance in education sector in Bangladesh

The management of education system in Bangladesh is totally centralized and under the authority
and responsibility of Ministry of Education (Alam, 2007). All public and private universities are
autonomous organization controlled jointly by the Ministry of Education (MOE) and University Grand
Commission (UGC). It has been fixed by law that the prime minister or the President is the chancellor of
university (UGC, 2012). The selection process of Vice chancellor (VC) is different for public and
private universities. In public universities the VC is selected from the faculty members and previous
studied mentioned that the decision of selection is very much influenced by the ruling political
group(WB, 2002; Alam, 2007). On the other hand according to the private university act 1992, the
VC of a private university comes from an entrepreneur body or someone selected by that group. The
act also identified key positions for administrative functions which are exactly similar to public
one just with an additional position that of Director of Finance and Accounts. However many
private universities do not follow the administrative structure prescribed by the act and instead
they follow a new Organogram (Alam, 2009). According to the new act for the regulation of

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international universities all these were brought under UGC authority. Ministry of the Education (MOE)
is the highest authority or decision maker and according to the law UGC plays the role of
developing plan for universities and after the approval of MOE implement those plans. UGC is
responsible for funding of public universities. Though Private universities do not get any
government assistance in terms of funding, they need to receive approval from the UGC to
operate and award degrees. Tertiary colleges are under the authority of National University.
However, the responsibility is limited to setting up curriculum and organizing and administering exams
(ADB, 2012).

The autonomy of the universities of this country was explored by several reports. According to OECD
(2003) autonomy is usually determined by the level of capability and the right of an institution to
decide its own course of action pertaining to institutional policy, planning, financial and staff
management, compensation, students, and academic freedom, without the interference of outside
authorities. OECD(2003) concluded that the term is a relative concept, existing to different degrees in
different contexts. However, the common ground for assessing the level of autonomy of universities
usually consists of such elements as academic freedom, budget or funding implications, staff
management, and quality supervision. In case of Bangladesh the academic freedom is restricted, funding
is controlled, and staff management is absent (Kabir, 2011). In most of the faculty and universities
no specific rule for quality supervision neither internally nor externally. Therefore Alam (2007)
mentioned this as so-called autonomy. Political interference of local administrative body was also
identified. For instance if a local parliamentarian wishes chairperson of a governing body (GB), he
or she may be legally do so, otherwise the local district commissioner (government official) is the
chairperson of the GB (Alam, 2007). As a result political atmosphere always prevails in and affects the
HE sector of this country (Alam, 2003).

3.4 The Challenges of Governance of Education sector

Before elaborating the topic of governance equalizer the broader perspective of governance
needs to be explored. In general governance refers to all processes of governing whether undertaken
by an authoritative body (government), market or network, whether over a family, tribe, formal or
informal organization or territory and whether through laws, norms, power or language.
According to Bevir (2013) the word 'governance' is used in a variety of contexts, but at a general level,
it refers to all forms of social coordination and patterns of rule and the term governance mainly
denotes a formal power given to the policy makers, legislators and key people to control a particular
sector (Alam, 2007). In formal context the process includes all the actors along with government
involved in influencing the decision-making process (such as lobbies, parties, media), is centered on
the relevant "governing body”. Following the participatory approach in present days, the definition of
governance is not only confined in the possession of authority but also identified as away for the
interaction and coordination of an enterprise/sector that helps to correlate both minor and major units,
as well as the personnel of an enterprise, in order to function effectively (Kabir, 2011). Therefore in the
context of higher education the “governance” indicates the formal and informal arrangements
that universities undertake to make decisions and take actions (Kabir, 2011).

Different reports has been published indicating the problems in governance of higher education
in developing countries (WB,2000, Alam, 2007) which highlights that nepotism, cronyism, political
activism and corruption are some of the vital problems that hinder good governance in HE in this

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countries. These problems then upshot poor academic freedom, non-meritocratic selection,
financial instability, non-accountabilityand corrupt governing councils (e.g. Senate, Syndicate and
academic councils).By analyzing student‟s perception of their assessment system in universities
Personal and political connection influence the student‟s assessment practices in Bangladesh and
academics are recruited for their political prejudices(Rabbani &Chowdhury, 2014).

The decision of this sector is highly linked with the existing ruling political party and it change
with the change of government(Rabbani &Chowdhury, 2014). From the very beginning till present
the politics of Bangladesh has a great influence in higher education sector particularly (Ahmmed, 2013).
On the other hand the public universities also had great impact in the politics of Bangladesh for instance
the direct participation of students and teachers in politics (Hossen & Anwar, 2011). There is a high level
of government intervention and interference in university affairs and this is constantly expanding (WB
2002; WB 2013). UGC has been established to play the role of autonomous body (University grant
commission act, 1973) in the HE sector and keep this sector free from any type of biasness and
manipulation. However the increasing government intrusion in different internal activities of university
deviate UGC to perform that role and now it is difficult to separate country‟s HE from politics. In 2010 a
national Strategic plan for HE has been taken for the next 20 years and major problems and challenges
has been highlighted. One of the major reforms suggested by the plan is depoliticization of public
universities (ADB 2012; OECD, 2003) which has been suggested by several other study also (Naser, 2010;
Chauhan, 2008).

IV.RESEARCH FINDINGS
Governance is the process of decision-making and implementing the decisions (LaPorte, 2000). On the
other hand there has no uniform definition of the good governance rather it is only prescribing of the
criteria to justify the level of good governance. Good governance means competent management
of the country’s resources and affairs in a manner that is open, transparent, accountable,
equitable and responsive to people’s needs. The World Bank and other multilateral development
banks address good governance as the management of economic institutions and public sectors
including transparency and accountability, regulatory reform (Alam, 2014).

4.1. School Managing Committee

To ensure the good governance of the secondary school it is necessary to form a school
managing committee (SMC) and to define the roles and composition of the SMC. Under the Education
policy 2010, each aided school is required to establish an Incorporated Management Committee to
manage the school. Schools under the Direct Subsidy Scheme and other types of schools are also
encouraged to set up a School Management Committee(SMC)for the same purpose. The safeguards
which help to ensure accountability of these management committees are specifying the terms of
reference of the management committee, including accountability to the Government and public,
defining clearly the roles and responsibilities of the chairman of the management committee,
school supervisor and the principal including the members of the management committee from
different stakeholders(e.g. school sponsoring bodies, parents, teachers, alumni, etc.) to enhance checks
and balances. Besides the SMC are responsible for the following activities:

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  Defining the quorum for meetings.
 Laying down the meeting frequencies, attendance requirements, and voting arrangements, etc.
 Drawing up meeting schedules and notify members in advance.
 Providing adequate time for members to go through the agenda and discussion papers before a
meeting.
 To prepare minutes of meetings promptly after each meeting.
 To make the school’s operations transparent (e.g. governance of the school, donations received,
etc.), through disclosure in the school prospectus, website, or annual report.
 To publish the objectives of the school, and its achievements towards the objectives.
 To set up a Parent-Teacher Association (PTA), where practicable, to enhance homeschool
cooperation and transparency in the school management

4.2. Integrity Management

A key factor of good governance is to demonstrate that the school is committed to ethical
practices. Schools should issue a Code of Conduct for compliance by the school staff, school
managers, and PTA members. As a commitment to ethical practices the code should include a
statement that the school is committed to good governance and ethical practices, and the schools are in
“zero tolerance” policy towards corruption and fraud.

4.3. Internal Control

Effective internal control is essential to good governance, and is the key to preventing corruption
through reducing risks of malpractice and fraud. Fora sound internal control system major duties
should be segregated as far as practicable to enhance checks and balances. The major key elements
of an internal control systemare:

 Laying down clear policies and procedures for the school’s major operations, such as staff
administration and procurement.
 Defining clearly the respective roles, responsibilities and powers of the staff members
involved in the processes.
 Engaging the staff to keep proper records of the activities carried out and the decisions
made to ensure accountability.
 Reporting any irregularities identified to the management of the school for consideration of the
action to take.
 Where practicable, establishing an audit committee under the school management committee.

4.4. Procurement

School operations entail frequent procurement of goods and services. To achieve value for money
it should be ensured thatched goods and services are purchased in a transparent and competitive
manner. It is essential for schools to have an effective and properly controlled procurement system in
place.

4.5. Staff Administration

Effective staff administration, such as staff recruitment and appraisal, is important toa school, because it
helps to enhance staff morale, minimize opportunities for abuse, and ensure that staffs of the right

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quality are employed. The basic principles for preventing corruption in staff administration are openness
and fairness, clear accountability and impartial enforcement of rules and regulations.

Setting of policies and guidelines

Recruitment of staff

Determination of remuneration

Supervision of staff

Figure 1. The key process of the staff administration of the school

4.6. Admission of Students

Private schools and schools under the Direct Subsidy Scheme are given autonomy in the admission of
students. These schools are free to draw up their own admission criteria and procedures (whereas aided
schools are allowed to select students to fill the discretionary places). It is important to ensure that the
admission process is fair and transparent to avoid allegation of favoritism or abuse.

Invitation of applicants

Shortlisting of applicants

Interviews or written tests

Decisions on admission

Figure 2. The key process of the admission process of the school.

4.7. Fund-Raising, Donations and Sponsorships

Donations and sponsorships, in money or of other kind, may be offered to the schools. From time to
time, schools may also organize fund-raising activities. As acceptance of donations, especially from
parties who have business dealings with the school (e.g.suppliers), may easily give rise to perception of
favoritism or bribes in disguise. It is essential for schools to put in place a transparent mechanism to
ensure the donations or sponsorships received are properly accounted for and are used for the benefit
of students.

Consideration to raise funds or accept

donations/sponsorships

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Approval of acceptance

Management of donations/sponsorships
 Figure 3. The key process of raising the fund by the school.

4.8. Recommendations

It is observed that there are a lot of problems in the secondary school which are severely embargo for
establishing good governance. Most of the corruption was identified to be occurred while recruiting
teachers in the schools. Therefore, our recommendations are based on the corrupt-free recruitment of
teachers in the schools and are as follows:

 A Teachers Selection Committee should be formed as per the Education Policy 2010.
 The School Management Committee, Governing body or the Parent–Teacher Association should
be formed through a fair election process.
 Children’s club should be established in the school.
 There should be a balance between all the institutions of the country. All institutions must
work within the boundary of their limit. It will ensure the proper functioning of the
governmental machinery.
 Job vacancies should be advertised in the national newspapers and on the website of the school.
 Applicants should declare in their application form of the job whether they have any friends or
relatives working in the school or not.
 Shortlisted candidates should be called for the interview based other-approved criteria, such as
years of relevant experience, levels of education attained, results of the written test, etc.
 A recruitment panel should be formed to conduct selection interviews and skill tests as
necessary.
 An assessment form needs to be designed showing the attributes for assessment and the
corresponding marks or weightage, and individual panel members should be assigned to give
marks on their own. The combined scores of each candidate and the comments of the panel
members should be recorded on the form after the interview and the candidates should be
prioritized according to their scores.
 Anti-corruption courts should be established and all the cases of corruption should be decided
on the basis of priority to check the wheel of corruption.
 The procurement methods, procedures and approving authorities for Purchases of different
financial limits should be specified according to the procurement guidelines issued by the
government.
 Detailed rules and code of conduct through discussion in the meetings of the stakeholders
should be developed.
 Social and financial audit reports should be disclosed.
 Student achievements through wall magazines should be published.

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 V.CONCLUSIONS
In the 1950s efforts were made to universalize education of the children. But these earlier
attempts could not be maintained due to some glaring problems such as poor planning, insufficient and
unreliable data and funds, multitude of enrollment, insufficient classrooms, no availability of facilities
and equipment, lack of trained teachers, inadequate supervision. For good governance the emerged
problems should be addressed adequately so as to produce men of conscience and knowledge,
who could take this country to greater heights. The goals of primary, secondary and tertiary
education joined together. Quality education is a sure way to prepare individuals to render quality
services to the nation since individuals must have acquired skills, knowledge and wherewithal to
live in a pluralistic society such as ours. Good governance can be achieved by providing the
welfare of the people, recognizing the feelings of the people, and using the knowledge and skills
acquired to serve as a good citizen and representative of a community. Where schools are well
equipped with suitable teaching aids, facilities and quality teachers, the products of such schools are
expected to serve well in whatever capacity they find themselves. At the same time, itis the
government that will make it possible for effective teaching and learning to take place if they equip
their schools properly and supervise school activities. It is obvious that the two concepts, quality
education and good governance, complement each other.

REFERENCES

The Pearson concise general knowledge manual 2012.India: Pearson Education.

Karim,M. A. (15-16 February, 2010). Digital Bangladesh for good governance.Dhaka:Bangladesh

Development Forum 2010, Bangabandhu International Conference Centre.

Rahaman,R., &Hoque M. R. (2014).Radio for education in Bangladesh: Trends and future scope.Journal
of Business Studies, 35(2), 224,237.

Wikipedia(May 10, 2016). Retrieved fromhttps://en.wikipedia.org/wiki/Public_university

General Economics Division (GED). Perspective plan of Bangladesh 2010-202: Making vision 2021
a reality.(2012). Dhaka: Planning Commission, Ministry of Planning, Government of Bangladesh. Ch. 7, P.
57.

LaPorte, R. (2000). Governance and Public Administration.InH.A.Hye(Ed.),Governance: South Asian

perspectives Dhaka: The University Press Limited.

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