Home' Trinidad and Tobago Guardian : October 1st 2015 Contents BG8 VERBATIM
BUSINESS GUARDIAN www.guardian.co.tt OCTOBER 1 • 2015
Over the next few weeks, a sizeable num-
ber of appointments to state boards
will have continue to be made by the
new administration. More than 1,000
positions are needed to be filled. These
appointments to state boards require
individuals with the right credentials and there is a very
small pool of qualified candidates.
One of the questions that has arisen during the appoint-
ment process has been the issue associated with inde-
pendence. This has been caused principally by the appoint-
ment of a former independent senator as chairman of
the boards to oversee the operations of the Caribbean
New Media Group (CNMG) and the Government Infor-
mation Services Ltd (GISL).
Many commentators, political analysts, politicians, and
citizens have weighed in on the appropriateness of appoint-
ing sitting or former independent senators to these state
The differences of opinion may
be explained by partisanship and
personal persuasions of each of the
speakers, but the comments expose
different levels of understanding
regarding the role of independence
on the board.
For example, Kamla Persad Bissessar, Leader of the
Opposition, in her appointment speech on September 21
said: "Public displays of apparent independence should
not be used as a mask for political activism."
Dr Winford James, political analyst, commenting to
the media on September 22 stated that "Drayton now
appears to be politically tainted and her past contributions
as an independent senator would now be scrutinised"
and Vasant Bharath, Opposition Senator on September
20 stated that Drayton was an "excellent choice. Helen
Drayton is a woman of great integrity and she has a sig-
nificant amount of competence and she comes from a
background where she understands communications and
she understands people".
This article discusses the nature of independence on
the board and addresses many of the issues currently
being raised and addresses many of the issues raised.
What is independence?
To answer this question we must first look at what
the law says. In T&T, all company directors are required
to act honestly and, in good faith, in the best interest of
the company and ahead of other interests as codified in
the Companies Act Chapter 81:01.
This is the cumulative effect of sections 99 (1)(2) which
provide that every director and officer of a company shall
in exercising his powers and discharging his duties, act
honestly and in good faith with a view to the best interests
of the company and exercise the care, diligence and skill
that a reasonably prudent person would exercise in com-
In considering what is in the best interest of the com-
pany, directors are required to consider both the share-
holders and the employees but these are not exhaustive
The Companies Acts of Barbados and Jamaica use
almost exactly the same terminology in sections 95(1)
and 174(1) respectively. This duty, called the "Duty of
Care", assumes that all directors should be independently
minded and they would not be influenced in their decision
making by other individuals or parties.
These statutory obligations, therefore, subsume all per-
sonal views and agendas to a common objective of looking
after the company s best interest.
In discharging these obligations,
directors are not statutorily required
to be or think independently
although it is expected that in mak-
ing board decisions they ought not
be influenced by considerations other than those that
are in the companies best interest.
This may be regarded as independence of judgment
which means that directors, in making board decisions,
must act personally an not as an agent or representative
of any person, group or organisation notwithstanding
how and by whom they were nominated, elected, or
selected. The exception to this general principle is where
the appointment is made pursuant to an act of parliament
which expressly identifies and provides for the appoint-
ment of directors as representatives of certain groups or
Independence is considered in more detail in the T&T
Corporate Governance Code (TTCGC) 2013 (see Box 1).
This important code applies to all organisations within
T&T "with a public accountability" and the provisions
in the code apply to all of the 59 organisations in T&T
that the Government currently holds shares (59 is the
number stated in the State Enterprises Investment Pro-
gramme 2015, other ways of counting result in higher
numbers, up to 110 enterprises in which the state holds
shares; in a different article we will examine these dif-
ferences together with regional and international com-
parisons, and also address corporate governance provisions
What is an independent
director on a state board?
Continued on Page 9
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