Corporate Governance: One Size Fits All?

• Author: Suzanne Goldson
• Pages: 33-50

Corporate Governance:

One Size Fits All?

Suzanne Goldson

1. Introduction

The Commonwealth Caribbean as a whole has concentrated on an

increased application of corporate governance principles since the 1980s

and 1990s with the introduction of a modern corporate legislative regime

emphasizing accountability, transparency and increased shareholder

participation. In an effort to modernize and simplify corporate law and

to encourage good corporate governance practices, most of the Caribbean

has adopted legislation from Canada and emphasized adopting the

corporate governance practices of the developed markets. In 1982,

Barbados led the way in enacting a Canadian modelled Companies Act,

followed by Guyana, Dominica and, later, Trinidad and Tobago, Antigua

and Barbuda, St Lucia, St Kitts and Nevis, and Jamaica.1 The latter two

territories have a hybrid model based on older UK Companies Acts and

the Canadian Business Corporations Act 1985.



the failure of a number of indigenous banks and insurance companies,

heightened the debate there and precipitated a slew of legislation to

     

corporate governance.2 As a result, although Jamaica is one of the last

Commonwealth Caribbean countries to adopt the more modern corporate

  

and the introduction of the Financial Services Commission, which is a

relatively new oversight body that supervises and regulates the securities

industry, the insurance industry and the private pensions industry.

Jamaica’s central bank, the Bank of Jamaica, regulates the banks, and

1. Barbados Companies Act 1982 Cap 308, Guyana Companies Act 1991, Dominica Companies Act

1994, Trinidad and Tobago Companies Act 1995 Cap 81:01, Antigua and Barbuda Companies Act

1995, St Lucia Companies Act 1996, St Kitts-Nevis Companies Act 1996, Jamaica Companies Act

2004. Hereafter, these statutes are referred to by the abbreviated name of the jurisdiction.

2. The failed Jamaican banks included Century National Bank, Eagle Merchant Bank of Jamaica,

Blaise Trust Company and Merchant Bank, Mutual Security Bank, Jamaica Mutual Life

Assurance Society, Workers Savings and Loan Bank, Citizens Bank, Island Victoria Bank, Island

Life Merchant Bank and Corporate Merchant Bank.

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Transitions in Caribbean Law

the Jamaica Stock Exchange regulates those companies which trade on

the local stock market. Other Commonwealth Caribbean territories have

         

banks3 and securities exchange commissions, which, between them,

   

market.4 Jamaica has also led the way in corporate governance by

the introduction of the Private Sector Organization of Jamaica draft

Corporate Governance Code (‘PSOJ Draft Code’) which is similar to

the United Kingdom Combined Code on Corporate Governance 2003.

Following on the heels of the PSOJ Draft Code, a proposed Caribbean

Code of Corporate Governance in Securities Markets was introduced by



Caribbean Corporate Governance Principles were recommended in 2005.

Both the Code and Principles have yet to be implemented.

Generally speaking, the Enron debacle of 2001 in the United States,

pressures from the international community and general winds of

globalization, have forced the Commonwealth Caribbean nations to stand

up and take note and to put in place preventative legislative measures

and codes in accordance with OECD and World Bank principles. The

greatest challenge to the Caribbean Commonwealth will be the current

          

and economy. Initial indications are that the ball was dropped in the

   



in the United States suggests that, perhaps, the models adopted in the

form of ‘Sarbanes-Oxley’ have not been as effective as originally thought.

One of the main aims of the proposed Caribbean company law

harmonization of the 1970s and 1980s was to introduce a corporate

law regime to which North American investment would be more easily

attracted. At the same time, the region expanded its offshore banking

facilities to the same end. In the enthusiasm to adopt these laws, it is not

clear whether there was due consideration to the corporate governance

implications. Was any corporate governance philosophy entertained and,

if so, did they assume that the corporate culture of the Commonwealth

Caribbean is homogeneous? It is not. Since the enactment of ‘new’

Canadian companies’ legislation in the late 1970s which the Caribbean

modelled, Canada has faced a number of challenges in the interpretation

and application of some of its provisions on corporate governance.

3. See Central Bank of Trinidad and Tobago, ‘Corporate Governance Guidelines’ (May 2006); Central

Bank of Barbados, ‘Corporate Governance Guidelines’ (October 2006).

4. See T&T Securities and Exchange Commission 1995, Bdos Securities Commission 2003.