THE CALAMITY that is now unfolding with CLICO International Life Insurance Company affords us an opportunity to revisit the concept known as good corporate governance.
It is said that it makes good, hard-nosed business sense in light of the strict guidelines laid down by the Organization For Economic Cooperation And Development. Countries with strong corporate governance practices have greater ability to attract foreign capital.
It is well known that today’s domestic and international investors are likely to shy away from countries that do not guarantee investor rights, do not provide for adequate corporate disclosure, and do not ensure sound practices from boards of management.
We accept that while globalization of economies has increased and international corporate guidelines have been adopted, each country has its own values, societal norms, way of doing business, and special circumstances.
Thus, to guide policymakers, market players and corporations in adopting sound corporate governance practices at the local level, every country should endeavour to develop its own corporate governance code. Barbados is making strides in this direction but laws must be strengthened.
It was with this knowledge that the Guidelines For Corporate Governance In The Commonwealth were written. Of course, the principles and guidelines of a country code must follow international governance standards.
Many countries have now adopted corporate governance codes of best practices, but the governance of a company is a dynamic matter.
A written code of best practice does not become the law of the Medes and Persians that does not change.
In fact, the code must be revisited, improved and revised as the conduct of business changes in response to changing mores in society. In short, the establishment of a code of best practice in a country is a continuous “labour of love”. It takes time and effort, and there have to be willing participants who want to do it in the interests of their country.
Having regard to international and institutional investment taking place across an electronic, borderless world, every country today should endeavour to establish its own code within the parameters of internationally approved principles and guidelines of corporate governance.
