When bureaucrats go boardroom hopping

On a weekday morning at the Secretariat, files accumulate on the desks of senior officials. Citizen petitions, policy proposals, procurement decisions and requests for inter-ministerial clearance and many more. Some have been waiting for weeks.

But the official responsible for moving them may not be there.

A Joint Secretary or Additional Secretary can instead be found several kilometres away, sitting around the polished table of a state-owned bank, an autonomous corporation or, in some cases, a publicly listed company where the official has been appointed to the board.

The meeting may last an hour. The official may stay for less.

There is an attendance register to sign, papers to approve and, frequently, a sitting fee to collect. Then comes another meeting — perhaps an audit committee or procurement committee — followed by another trip across Dhaka.

For a small but consequential group of senior bureaucrats, board membership has developed into something approaching a parallel occupation.

Sitting fees commonly range from 8,000 taka to 15,000 taka for meetings of boards and their committees. An official attending enough of them can supplement a government salary by 100,000 taka a month or more. In some cases, monthly collections can exceed 300,000 taka.

The money is only part of the problem.

The larger issue is whether senior government officials can simultaneously fulfil two demanding obligations: their full-time responsibilities to the state and the fiduciary duties that come with directing banks, corporations and other institutions controlling billions of taka in public or shareholder money.

The arrangement has persisted for years in different forms, often justified on the grounds that government representation is necessary on the boards of state-owned or strategically important institutions.

But the sheer number of appointments and committee memberships accumulated by some officials exposes a structural weakness in Bangladesh's administrative system: board seats intended to strengthen government oversight can instead weaken both the bureaucracy and the companies being overseen.

Public duty becomes a second job

The conflict begins with time.

Under Bangladesh's civil service framework and Secretariat procedures, a government officer's working hours belong to the state. Regularly leaving the Secretariat for outside meetings without the required authorization or official movement records can therefore become a disciplinary issue.

The Government Servants (Conduct) Rules, 1979 also restrict outside remunerative employment or private work without government approval. The Government Servants (Discipline and Appeal) Rules, 2018 provide penalties for misconduct and inefficiency, including where an official neglects assigned responsibilities.

That makes the boardroom circuit difficult to dismiss as a harmless administrative perk.

If an official attends 20 or more board and committee meetings in a month to generate substantial additional income, the practical question becomes unavoidable: how much of the official working day remains available for the job for which the government already pays a full-time salary?

The distinction becomes even more important when an official sits on a board ex officio.

A Joint Secretary nominated to the board of a state-owned bank, Petrobangla, the Bangladesh Chemical Industries Corporation or another public institution does not hold the seat because of a private business relationship with the company. The appointment arises from the person's government position.

That distinction matters financially.

Bangladesh's Fundamental Rules contain provisions governing fees received by public servants for work connected with their official responsibilities and allow the government to determine how such earnings should be treated. Finance Division directives have also sought to regulate sitting fees at state entities.

There are separate disclosure obligations. Income from honoraria, allowances and other sources can have implications under government conduct rules, asset-disclosure requirements and tax law.

The regulatory structure governing company boards adds another layer.

The Bangladesh Securities and Exchange Commission's Corporate Governance Code limits the number of listed companies in which a person may serve as an independent director. Banking and insurance laws impose additional restrictions on directorships.

Yet the bureaucratic system can operate across institutional categories. An official may be a government nominee at one entity, sit on committees at another and hold a different form of directorship elsewhere.

The result is a patchwork in which no single restriction necessarily captures the total workload.

There is also an obvious conflict when the official's own ministry regulates, finances, audits, sets prices for or otherwise exercises authority over an institution from which that official receives meeting fees.

Government representation is supposed to protect the state's interest. Financial dependence on the institution being supervised can blur that relationship.

The problem is therefore not simply whether the payment is technically permissible. It is whether the arrangement preserves the independence expected of a regulator and the undivided attention expected of a civil servant.

More than a sitting fee

There is another problem for officials who treat board meetings as brief interruptions in their government schedules: company law does not regard directors as ceremonial visitors.

Directors are expected to understand the decisions they approve and exercise care and judgment over the affairs of the institution.

That can be difficult when board papers run to hundreds of pages and cover syndicated loans, procurement contracts, investment decisions, single-borrower exposure, asset sales and other technically complex transactions.

An official moving between several meetings in a day has little realistic opportunity to examine such material closely.

Yet a hurried meeting does not necessarily produce hurried liability.

Once directors participate in meetings and approve resolutions, their names become part of the institutional decision-making record. If a transaction later becomes the subject of an investigation, attendance registers, minutes, resolutions and recorded dissents can become crucial evidence of what each director knew and did.

Bangladesh's banking history illustrates the stakes.

Investigations into scandals involving institutions including BASIC Bank, Sonali Bank and Janata Bank have repeatedly raised questions about the effectiveness of boards overseeing large loans, credit concentrations and transactions that later produced enormous losses.

Other controversial financial transactions, including those involving Islami Bank and IFIC Bank, have similarly focused attention on whether boards provided meaningful scrutiny of powerful borrowers and complex financing arrangements.

The lesson extends beyond banking.

The Anti-Corruption Commission's investigation into Biman Bangladesh Airlines' lease of two Boeing 777-200ER aircraft from EgyptAir examined a transaction that left the national carrier facing heavy losses after technical problems, including recurring engine trouble.

Such cases expose the weakness of treating government nominees as passive representatives.

Their presence is supposed to add oversight. If they attend without studying technical documents, challenging management or formally recording objections, the government's representation can become little more than another signature on the resolution.

That is precisely where the two governance failures meet.

At the Secretariat, an absent official can leave government decisions waiting. In the boardroom, the same official may be physically present but institutionally absent — unable or unwilling to devote sufficient time to scrutinizing decisions involving enormous sums of money.

The financial incentives make the arrangement harder to defend.

A system in which officials can increase their personal income by accumulating meetings creates an incentive opposite to the one that good administration requires. The government needs senior officials at their desks resolving policy and administrative problems. The fee system rewards them for being somewhere else.

It can also distort the purpose of government-nominated directorships. Such appointments are meant to provide expertise, coordination and protection of the public interest, not to create a supplementary income stream for senior officials.

The answer need not be removing bureaucrats from every board. Some state enterprises require direct government representation, and officials with relevant expertise can provide an important link between corporate management and public policy.

But representation requires limits.

Board appointments could be restricted according to workload and relevance to an official's portfolio. Meetings held during government working hours could require transparent authorization. Ex-officio sitting fees could be paid directly to the Treasury, or subjected to clear and publicly disclosed rules on what officials may retain. Board memberships, attendance and payments could also be disclosed systematically.

Most importantly, government nominees could be held to the same expectation that applies to any serious director: read the papers, ask questions, record objections and accept responsibility for decisions.

The current arrangement can produce the opposite outcome. The state pays an official to administer the government while another public or private institution pays the same official to supervise its affairs, sometimes during the same working hours.

Both institutions may technically have the officer on their books. Neither can be certain it has the officer's full attention.

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Al Maruf Khan is an economic and trade analyst, a Chartered Accountant in practice, a former President of Chittagong Stock Exchange, former Chairman of South Asian Federation of Exchanges