Corporate Governance in the Caribbean Environment

“The Caribbean Corporate Governance Forum”

Trevor E Blake General Manager – ECSE

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Corporate Governance Corporate Governance is Important!

Strong governance framework facilitates economic development by

Strengthening market discipline Improving business transparency Enhancing Disclosure Enhancing effective Regulation Enhancing Corporate Social Responsibility

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Corporate Governance Strong governance framework

assists governments and regulators to

monitor markets identify risks impose appropriate regulations that

encourage growth and fair competition

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Genesis of CCGF ECSE/ECCB collaborate to launch

Caribbean Corporate Governance Forum

Recognition that CG integral to development of money & capital markets

Calls for transparency and accountability Emergence of international CG standards Investors’ demands for governance

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CCGF Caribbean Corporate Governance

Forum (CCGF) A pan Caribbean forum

committed to promote good CG standards in the region

Initiated to bring the Caribbean into global CG debate

Synthesis of ideas into regional consensus

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CCGF Objectives Raise CG profile in region Identify relevant development

issues Assess current activities in

region To form a regional network To establish regional consensus

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CCGF Activities 1st regional roundtable held Sept ’03

120 participants from 16 countries Discussion areas included

global trends and implications for emerging economies

Caribbean corporate governance challenges Institutional investor, regulatory, securities

markets & corporate perspectives governance issues for banks, nbfis, public

companies, state corporations & SMEs

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CCGF Activities Creation of Caribbean Technical

Working Group on CG (CTWG) A grouping representative of various

countries, sectors, industries and professions

to promote implementation of initiatives determine priorities for implementation

Major achievement - Draft Corporate Governance Principles

for Caribbean Countries

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CCGF Activities 2nd regional roundtable in March

’05 170 participants from 20 countries Focus on CG reform Review CG Principles Issued a Statement of Principles

CTWG to develop full set of Principles Principles to be disseminated across

region for comment National consultations

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Caribbean CG Principles Principles focus on 6 broad

areasI. Objective & basis for Caribbean CG

framework II. Shareholder rights and key

ownership functionsIII. Equitable treatment of shareholdersIV. Role of stakeholdersV. Disclosure and transparencyVI. Board responsibilities

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Caribbean CG Principles

Meet international standards Focus on publicly held

companies Relevant to private, family &

state enterprises Encourage stakeholder rights Recognise unique

circumstances of region

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Caribbean CG Principles

Suited to region’s state of development

Support integration movement Non-binding and non-

prescriptive Basis for development of

national and/or sector specific codes

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CG Training Initiatives Programmes to raise CG

awareness and strengthen pool of directors

2-day introductory Directors’ course & 1-day Chairpersons workshop held in June ’05, to promote

best practices ethical, transparent practices formal training production of Personal Action Plans Duties & responsibilities of Chairman

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Way Forward Principles placed on Agenda of

CARICOM Heads of Government meeting

PM Anthony of St Lucia, responsible for Justice & Governance

National Adoption of the Corporate Governance Principles, in entire region

Development of country, sector and industry codes

Director Certification Training

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Contact DetailsEastern Caribbean Securities Exchange

LtdP O Box 94Bird Rock, St KittsTel: 869 466 7192 Fax: 869-465-3798E-mail: info@ecseonline.comWebsite: www.ecseonline.comCG page: www.ecseonline.com/

corporategovernance.asp

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Draft CG Principles Principle I – Overall Objective

The corporate governance framework within the Caribbean should

encourage the development of transparent and efficient markets,

have its basis in the rule of law and ethical standards to foster the division of responsibilities among supervisory, regulatory, and enforcement bodies.

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Draft CG Principles Principle II – Shareholder Rights

The CG framework should protect and facilitate the exercise of shareholders rights.

Principle III – Equal Treatment of Shareholders

The CG framework should ensure the equitable treatment of all shareholders, including minority and foreign shareholders.

All shareholders should have the opportunity to obtain effective redress for violation of their rights.

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Draft CG Principles Principle IV – Rights of other Stakeholders

The CG corporate governance framework should

recognise the rights of stakeholders established by law or through mutual agreements

encourage active co-operation between entities, including family owned businesses and state-owned/controlled enterprises, in creating wealth, jobs, and the sustainability of financially sound enterprises.

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Draft CG Principles

Principle V – Disclosure and Transparency The corporate governance framework

should ensure that timely and accurate disclosure is made on all material matters relating to the entity, including its

financial situation performance ownership governance

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Draft CG Principles Principle VI – Board Responsibilities

The corporate governance framework should ensure

the strategic guidance of the entity the effective monitoring of its

management by the Board the Board’s accountability to the entity

and to stakeholders.