Corporate Governence Guidlines

Corporate Governence Guidlines



Corporate governance plays a pivotal role in shaping the success, transparency and sustainability of any organization. Karnaphuli Insurance Company Limited (KICL) is a prominent insurance company that operates in Bangladesh. This essay aims to explore the corporate governance practices implemented by KICL, emphasizing their commitment to integrity, accountability and transparency.

It is the system of processes, customs and policies of internal control which protect the interests of shareholders. The company believes in adopting the best practices in the area Corporate Governance and follows the principals of transparency and accountability, integrity, ethical behavior. The Board of directors formulates the Vision, Objectives & strategic goals and the Management executes the directive in a professional way and safeguards the asset of the Company.


Board Composition:


The Board comprises 14 members, including three Independent Directors, who possess exceptional professional skills and extensive experience.  Their proficiency, personal attributes, and collective capabilities enable them to execute their duties effectively and contribute to the Company’s strategy, policy formulation and steady growth. Shareholders in the AGM will appoint directors from public shareholders. According to the Articles of Association, one third of the Directors retires from the Board every year at the AGM but remain eligible for reelection. Moreover, the Chairman of the Board is elected by the board members. You can find the list of Directors and their Profiles at our annual report (Page 35 to 42).


Role & Responsibilities of the Board of the Directors:


As per the Articles of Association and relevant laws and regulations, the Board is collectively accountable to the Company’s shareholders. The Board formulates the Company’s Strategy and policies, overseas its operations and enforces Corporate Governance best practices. Additionally, the Directors offer prudent advice in the Insurance Business domain.

Board of Directors takes the necessary steps to ensure the Company’s success by directing its business and financial matters. They assess the Company’s progress towards its vision and mission b y contemplating future opportunities, weaknesses and risks.

During the AGM, the Board of Directors provides a performance report and presents the Company’s plans and strategic development. They delegates authority to the management to execute, supervise and implement the Company’s policies, strategies and business plans. The Board also acknowledges its employees, who demonstrate exceptional performance in their areas of expertise. Furthermore, they maintain a robust relationship with the shareholders and policyholders.


Role of the Chairman:


The Board of Directors elects the Chairman, who serves as the non-Executive Director and leader of the Board. The Chairman holds the most senior position in the Company and is responsible for ensuring the Board’s proper functioning. Their role involves facilitating the active participation of all Directors, ensuring the Board exercises full control over the Company’s business and remain vigilant about its obligations to the Company, shareholders, management and policyholders as required by the law. The Chairman takes charge of setting the agenda for board meetings and the AGM. Under their strong leadership, the Board adopts a prompt and constructive decision-making approach, regularly reviewing and monitoring the Company’s strategic policies and development. The chairman ensures the both Board and committee meetings are conducted efficiently, effectively and with a clear focus. They also ensure that Company’s corporate governance practices align with the regulations set forth by the BSEC. Acting as the principal of the Board and counselor to the CEO, the Chairman assists in problem definition, strategy review, accountability maintenance, and maintaining a positive relationship with shareholders and others stakeholders. Additionally the Chairman evaluates and monitors the performance of the CEO.


Role of the Chief Executive Officer (CEO):


The Board of the Directors has clearly established the roles of the Chairman and Managing Director in accordance with the requirements set forth by the Bangladesh Securities & Exchange Commission (BSEC) code.

The appointment of the CEO is subject to the approval of the Insurance Development Regularity & Authority (IDRA) and is carried out the Board of the Directors. The duties and responsibilities of the CEO are explicitly outlined in the Articles of Association and the IDRA guidelines. In each board meeting, the CEO is responsible for presenting the Company’s financial and businesses status to ensure that the Directors have a clear understanding and can provide appropriate guidance.

The CEO holds overall responsibility and accountability for managing the company’s day-to-day financial and operational activities, as well as implementing the Board’s strategies and policies. Within the authority delegated by the Board, the CEO exercises prudent leadership, ensuring that a team of talented executives operates efficiently.

The aforementioned team works within the boundaries of the power granted by the Board, demonstrating efficient performance under the CEO’s guidance.


Role of Independent Director:


The Company has adhered to the guidelines outlined in the notification of the Bangladesh Securities and Exchange Commission Corporate Governance Code concerning the composition of the Board. In line with this, the company has appointed three Independent Directors, which constitutes one-fifth of the total number of the Directors. These individuals are not involved in any business ventures and do not have any financial ties with the Company. This ensures that they can exercise independent judgment and provide impartial advice.

The Board has full confidence in the experience and knowledge of these Independent Directors, believing that they will make valuable and constructive contributions to the company.


Role of the Company Secretary:


The responsibility of organizing board meetings and creating the agenda lays with the Company Secretary, who collaborates with the Chairman of the Board of Directors, the Chairman of various committees, and the Chief Executive Officer. The agenda, along with the relevant supporting documents, is shared in advance of the meeting. The Company Secretary is answerable to the board for ensuring adherence to board procedures and compliance with relevant rules and regulations.

During the meetings the Company Secretary attends regularly and diligently records the proceedings to prepare accurate minutes. Acting as a link between the Board, Management and shareholders, The Company Secretary plays a vital role in facilitating effective communication. Additionally, the Company Secretary serves as the Member Secretary of the audit committee


Reports of corporate Governance