Corporate Governance in Economic Downturn – Part 2
“In the last article, it was established that Corporate Governance in the Caribbean can be improved by a more efficient utilisation of the skills and experiences of our human resources, when making boardroom appointments. The Caribbean is often referred to as a melting pot because of the diversity that exists among its people. It is this diversity that researchers believe can add value to the management of corporations. The debate on Corporate Governance worldwide has suggested that most company failures can be attributed to the actions of the corporate board. This is mainly because, it is suggested that those corporate boards are not equipped with the diversity of skills, experiences and backgrounds that necessitates dealing with environmental challenges. Consequently, attention should be directed to the structure and composition of our corporate boards.
“The Caribbean boardrooms can be characterised by prominent societal figures, nearing to retirement, with personal or political affiliations, attended the same educational institutions, with similar skills and experiences and have the same social group connections or associations. Scholars have argued that directors’ backgrounds, socialisation, experiences and skills contribute to their morals, values and decision-making. Therefore, it is this Caribbean ‘boil down’ of similar directors, that scholars and corporation stakeholders contended, leads to narrow mindedness or ‘group think’, partial decision-making, and the inability for directors to be independent and accountable because of their close alliances.
“It stands to reason, since the Caribbean comprises of a diversity of people from varying backgrounds, experiences and skills then the individuals at the upper echelon of Caribbean corporations should be a reflection of the people they serve.
Currently, our economies are affected in different ways and our strengths, weaknesses, threats and opportunities vary as much as our small communities. Therefore, to ensure survival our board members must to able to relate and identify with whatever confronts us. Consequently, to ensure that our corporate boards are efficient, effective and capable of making well informed decisions; corporations must take advantage of the differences in our people, by ensuring that their boards consist of a diversity of directors from different backgrounds, expertise, experiences, group affiliations and networks.”
This week’s article was part two of a four-week guest series titled “Corporate Governance in Economic Downturn” by Dr. Wendyann Richardson of the Refining Leaders Institute.
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