Corporate Governance in Economic Downturn – part 1
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. Over the next four weeks we will draw on the expertise of our very own Corporate Governance expert, Dr. Wendyann Richardson. Dr. Richardson, holds a BSc. in Economics and Accounting from the University of the West Indies, a Masters in International Management from the University of London and a PhD in Management in the area of Strategy and Corporate Governance, from Loughborough University.
Here is Dr. Richardson’s contribution to Part One of this series titled Corporate Governance in Economic Downturn. “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 professionals. 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, transparency and open leadership be attained and assured.”
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