Corporate Governance in Economic Downturn
AS MANY BUSINESS leaders worldwide contemplate their next strategic initiative to manoeuvre the uncertainty of the COVID-19 driven economic tide, the issue of corporate governance becomes paramount.
Corporate Governance involves the regulations by which corporations are managed and controlled; it encompasses matters relating to the interaction between the company’s management, corporate board, shareholders and stakeholders. Unfortunately, Corporate Governance has been under-developed in the Caribbean and mostly concentrated on the financial sector, more specifically on safeguarding against money laundering and terrorist financing. However, as the state on our economics drastically change before our eyes and the realisation that in order to ensure survival and long-term sustainability we must adapt an ‘all hands on deck’ attitude, the need has arisen for Corporate Governance to play a more active role in our region’s corporations. Currently, the region struggles with a number of Corporate Governance problems including, an overdependence on the same small pool of directors; this secret club of corporate elites has resulted in a small numbers of directors with multiple directorships, which raises concerns of conflict of interest and independence. Some have posited that such a situation suggests that directors are appointed through shoulder tapping, affiliations or business networks, rather than concentrated effort to attract qualified, experienced, independent professional. This problem persists amidst the wealth of talent, skills and experience that exist among our people.
It can be postulated that the recent economic challenges beg for a breaking of the barriers to the board rooms across our regions and breaking the proverbial glass ceiling in efforts to more efficiently utilise the skills and experiences that are present in our region’s human resources.
It is only in the absence of politicised boards, limited outside directors and boardroom homogeneity can our region recover, and maintain sustainability and accountability, and transparency and open leadership be attained and assured.
Dr. Wendyann Richardson is a Management Consultant who specializes in corporate governance, business operations management and refining of skills through training.
She can be reached at [email protected] gmail.com