Corporate Governance Practices in Bangladesh: A Comparative Analysis between Conventional Banks and Islamic Banks

Corporate governance (CG) is an important effort to ensure accountability and responsibility and is a set of principles, which should be incorporated into every part of the organization. This study focused on the state of Corporate Governance (CG) in two categories of the banking industries: Conventional Banks and Islamic Banks. As Conventional Banks and Islamic Banks differ a great deal in their rules, regulations and operating procedures, the corporate governance (CG) practice of these two banking sectors is also different from each other. Here, in this paper it is tried to represent a clear comparative study about corporate governance (CG) practice of these two banking sectors. For this purpose it has been selected ten commercial banks of which five are renowned Conventional Banks and the same number of Islamic Banks in Bangladesh. After exploring the scores of each indicators it has been noticed that in average the grand score of Islamic Banks is less than the grand score of Conventional Banks to the extent of 0.07 (0.60-0.53). And in 2012 the grand score of Islamic Banks is less than the grand score of Conventional Banks to the extent of 0.05 (0.83-0.78). But Islamic Banks signify a higher overall improvement score than Conventional Banks that is 0.02 (0.25-0.23). Both Conventional Banks and Islamic Banks are being imperative in practicing corporate governance (CG) as both the banking sectors are facing significant improvement in practicing CG. But in comparison to Conventional Banks, Islamic Banks are bit lacked behind in corporate governance (CG) practices.