Last September I watched Bangladesh's Finance Minister respond in the affirmative after Grameen Foundation president Alex Counts asked him if his government would refrain from taking over the Grameen Bank, the majority of whose shares and board seats are held by female Grameen members.Now the Bangladesh cabinet, of which Finance Minister Muhith is a leading member, has effectively moved to make him a liar. With the Prime Minister chairing, it just approved a draft amendment to the Grameen Bank Ordinance, an amendment which I gather now awaits Parliament's approval. Since the Prime Minister's party holds some 230 out of 299 seats in the body, passage does not seem in doubt.According to press reports, the amendment would change how the Managing Director of the Grameen Bank is appointed. Under current law, as I recall, the Bangladesh Bank (the central bank) appoints 3 of the 12 regular board members, plus the board chairman. The other 9 are elected from among the ranks of Grameen's 8 million members. The 3-9 split reflects the law's envisioned 25-75 division in share ownership. The members' control of the board has thus far stymied the government's attempt to intervene in the Grameen Bank after the removal of Muhammad Yunus as managing director.The draft amendment would bypass this bottleneck. Now, the government-appointed board chairman will assemble a panel of three candidates for the position of Managing Director in consultation with the board, then pass that to the Bangladesh Bank for final selection. This will, um, emasculate the board, depriving it of what in an independent organization is a board's most important function: hiring and firing the CEO. More fundamentally, the amendment will destroy the co-operative, democratic governance of the Grameen Bank.
