Improved corporate culture can reduce insider trading: experts

Improved corporate culture at listed companies can help reduce the profitability of insider trading, ultimately curbing the practice, experts said today.

Insider trading refers to the buying or selling of a company's securities by individuals who possess material, non-public information about the company.

The remarks were made at an event at Dhaka University. Ahsan Habib, professor of financial accounting at Massey University in New Zealand, presented the keynote paper.

Habib discussed recent empirical findings on insider trading profitability, the role of corporate governance mechanisms, and the importance of corporate culture in ensuring fair and transparent capital markets.

He said improvements in corporate culture reduce the profitability of insider trading, which in turn discourages such practices.

As a result, he stressed the need to place greater emphasis on strengthening corporate culture alongside regulatory measures.

The research seminar on corporate culture and insider trading was organised by the Accounting Research Initiative of the Department of Accounting.

Maksudur Rahman Sarker, chairperson of the Department of Accounting at the University of Dhaka, inaugurated the seminar.

Other speakers included Md Saiful Alam, director of ARI; Al-Amin, associate professor of the Department of Accounting; Mohammad Rakibur Rahman, additional director of the Bangladesh Securities and Exchange Commission; and Mohammad Morshed Alam, representative of the Anti-Corruption Commission.