DRAFT PRINCIPLES
of corporate governance for companies operating in the Caribbean

should soon be ready
for presentation to CARICOM heads.

The disclosure was made recently by Virginia Mapp, general manager of the Securities Commission of Barbados, during an address at the Barbados Stock Exchange's (BSE) corporate governance symposium at Hilton Barbados.

Mapp said the draft was premised on the "comply or explain" philosophy and covered such areas as chairman/chief executive officer duality, the use of non-executive directors, the use of audit and remuneration committees, disclosure of directors' emoluments, and other interests.

Mapp, a former head of the BSE, told representatives from a cross-section of corporate entities that most regulators did not "simply report on developments in corporate governance but sometimes they have to take bold initiatives".

According to her,
"Most regulators apply some flexibility tempered by accountability such as "comply or explain" or
"if not, why not".

"Regulators do not see corporate governance as a one-size-fits-all remedy, neither do they view it
as prescriptive.

"If a company considers a recommendation inappropriate to its particular circumstances, it has the flexibility not to adopt it, provided that it can explain why."

Mapp stressed that regulators recognised also that performance and effectiveness could only be compromised if material changes were not sensibly managed.

While explaining that corporate governance was important, however, she cautioned that it could not prevent corporate failure or mistakes in corporate decision-making.

"It merely provides a reference point for enhanced structures to minimise problems and optimise performance and accountability.

"Good corporate governance is necessary to instil integrity in those who can influence a company's strategy and financial performance through ethical
decision-making,"
she added. (GE)