Professionalism is an integral part of good corporate governance, which helps expand business and achieve the economics of scale in production of goods and services in a family-owned business, the FBCCI said in a statement issued yesterday.

FBCCI (Federation of Bangla-desh Chambers of Commerce and Industry) also observed strengthening of corporate governance hinges on an effective legal system. "Without a strong legal system, the mechanism will either function poorly, or fail to function at all," it said.

However, the FBCCI has prepared a set of recommendations to ensure good corporate governance and make a common code of ethics for businesspeople.

According to the recommendations, the management body of an enterprise should exercise leadership and integrity in directing the company. "The organisation should function with transparency, accountability and responsibility."

The company board must monitor and evaluate the implementation of strategies, policies, management performance criteria and business plans, the FBCCI recommended.

"Any funds from company assets should not be contributed to any political party or organisation, or to any individual who either holds a public office or is a candidate for a public office," it said.

Companies neither should maintain any secret funds nor record transactions beyond the balance sheet. They should not have any account for any purpose other than legitimate business. All transactions involving company assets should be properly recorded, it said.

The company directors must ensure that they comply with all relevant laws, regulations and codes of best business practices. Directors must ensure that no person or group of people has unrestricted power, it added.

The company board must regularly review processes and procedures to ensure the effectiveness of its internal systems of control so that its decision-making capability and the accuracy of its reporting and financial results are consistently maintained, FBCCI said.

A corporate loan taken from any bank must be used only for the purpose for which it was taken. If any diversion of funds had taken place in the past, it should be rectified, the recommendations said.

"Business houses should pay taxes regularly as required by law. Public limited companies must pay dividends as declared."

Business houses should not get involved in corrupt practices nor should they give any illegal donations. If such a payment has to be made under duress it should be reported to appropriate authorities, FBCCI said.

The board must identify key risk areas and key performance indicators of the business enterprise and monitor these factors, it added.