Rationality, traditionalism and the state of corporate governance mechanisms: illustrations from a less developed country

Purpose ? The purpose of this research is to provide an account of corporate governance practices in Bangladesh. This paper demonstrates that the traditionalist culture mediates the rationalist/legalist framework of corporate governance in Bangladesh. Design/methodology/approach ? A series of semi-structured interviews were conducted. Observations and the personal working experience of one of the researchers, along with documentation, provided rich sources of information for the paper. Findings ? The findings show that families have a dominant presence in all aspects of corporate governance. Boards of directors in companies play a significant part in serving the interests of families rather than those of general shareholders. Research limitations/implications ? This study focuses on corporate governance practices in a traditional setting and shows how traditional culture and values are in conflict with the rational ideas imported from a different setting. It suggests that the World Bank?s expectations that Anglo-American models of corporate governance will be effective in Bangladesh and possibly other LDCs are unfounded. Originality/value ? The paper adds to the literature on corporate governance, especially in the context of LDCs. It will be of great value to researchers and practitioners seeking to gain a better understanding of corporate governance frameworks in various settings.