Highlights:

• BSEC extends compliance deadline to 31 December 2026
• 180 of 360 listed firms have complied so far
• Regulator warns of legal action after deadline
• Companies cite shortage of eligible candidates
• Experts blame resistance to independent oversight
• Rule aims to strengthen board diversity and governance

Half of the companies listed on Bangladesh's stock market are yet to appoint at least one female independent director despite the requirement becoming mandatory more than two years ago.

As a large number of firms have failed to comply, the Bangladesh Securities and Exchange Commission (BSEC) has extended the compliance deadline for the third time.

Under the latest decision, the previous deadline of June 2026 has been extended by another six months to 31 December 2026. However, the regulator has warned that legal action will be taken against companies that fail to comply within the revised deadline.

According to the latest BSEC data, 180 out of 360 listed companies have so far appointed female independent directors. Another 131 companies have sought additional time or have yet to complete the appointment process, while the remaining companies have not submitted their compliance status to the regulator. As a result, 180 companies are still outside full compliance with the requirement.

The requirement was introduced through an amendment to the Corporate Governance Code published in the official gazette on 29 April 2024, making it mandatory for every listed company to appoint at least one female independent director.

BSEC officials said the objective is not merely regulatory compliance but strengthening corporate governance. According to the regulator, greater female representation on corporate boards will improve diversity in decision-making, enhance transparency and accountability, and make independent directors more effective in performing their oversight role.

The commission has encouraged companies to appoint qualified women professionals from diverse backgrounds, including business leaders, corporate executives, members of business associations, university teachers, serving or retired government officials, lawyers, and other professionals with relevant expertise.

However, many listed companies argue that the practical situation remains challenging.

Earlier, the Bangladesh Association of Publicly Listed Companies (BAPLC) informed the commission that finding qualified female independent directors has become a major challenge for many companies. The association noted that the existing rule allowing one individual to serve as an independent director on a maximum of five listed company boards has further narrowed the pool of available candidates.

Company representatives also say that many experienced and qualified women decline board positions due to time commitments, legal responsibilities, and personal considerations.

Speaking to The Business Standard, Riyad Mahmud, President of BAPLC, said nearly half of the listed companies have already complied with the requirement, while the remaining firms needed additional time.

"The BSEC has granted that extension, which is a positive step for companies," he said.

He added that companies are making efforts to comply and that the remaining firms will also meet the requirement once they are able to identify suitable candidates who satisfy the regulator's eligibility criteria.

Mahmud also noted that the proposed amendments to the Corporate Governance Code would increase the minimum number of independent directors on company boards.

"Previously, companies were required to have two independent directors. Under the proposed amendments, the minimum will increase to three. Our association has requested the regulator to reconsider this proposal because implementing it will be very challenging," he said.

On the other hand, corporate governance experts argue that Bangladesh does not lack qualified female professionals. They point to the country's banking, insurance, academia, legal profession, chartered accountancy, public administration and corporate sectors, where many experienced women are capable of serving effectively as independent directors.

According to them, the slow progress is less about a shortage of talent and more about the reluctance of many family-controlled companies to bring genuinely independent voices into their boards.

Market observers say ensuring women's representation at the board level is not merely a compliance issue but an internationally recognised principle of good corporate governance. More diverse boards are associated with stronger risk management, better strategic decision-making, improved accountability and greater long-term sustainability.

The regulator hopes that the extended deadline, along with continued engagement with listed companies, will help the remaining firms complete the appointment process and strengthen corporate governance, transparency, accountability and inclusive leadership across Bangladesh's capital market.