This paper considers the hilsa shad (Tenualosa ilisha) fishery of southern Bangladesh as a case study regarding governance and power dynamics at play in a small-scale fishery, and the relevance of these for the sustainable management of coastal fisheries. Qualitative methods, involving in-depth individual interviews (n = 128) and focus group discussions (n = 8) with key stakeholders in the hilsa fishery, were used to capture multiple perspectives on governance from those in different positions in the relative power structures studied, while facilitating insightful discussions and reflections. The analysis here is based on a power cube framework along three power dimensions (levels, spaces, and forms) in Bangladesh’s hilsa fishery. The study displays an imbalance in the present hilsa governance structure, with some stakeholders exercising more power than others, sidelining small-scale fishers, and encouraging increasing illegal fishing levels that ultimately harm both the fisheries and those dependent on them. To overcome this, we propose a co-management system that can play a vital role in equalizing power asymmetry among hilsa fishery stakeholders and ensure effective hilsa fishery governance. Our results suggest that recognizing analyzed power dynamics has substantial implications for the planning and implementation of such co-management and the long-term sustainability of the hilsa fishery.