Home' Trinidad and Tobago Guardian : June 6th 2013 Contents There seems to a be a general con-
sensus in the business world of T&T
that corporate ethical standards are
low, procurement processes are sus-
ceptible to unethical behaviour, and
that good corporate governance is
probably more a cost than a benefit.
The Energy Chamber doesn t subscribe to this
It is well known that implementing corporate
governance principles improves company perform-
ance. However, it is argued that low value is placed
on good governance in T&T. Why is this so?
A survey conducted in January 2013 by Syntegra
Change Architects, in collaboration with Ernst and
Young Services Ltd for the Energy Chamber of
T&T s (ECTT) Improving Corporate Governance in
T&T project, provides some insight. This is being
utilised by the Energy Chamber to structure its gov-
ernance project and customise the supporting mate-
rial so that companies are actually able to derive
the benefits of good corporate governance.
The survey contains the responses of 47 members
of the ECTT and is supplemented by 22 personal
interviews with chamber members. The sample
respondents and interviewees reflect roughly the
general ownership types of ECTT members---70 per
cent are closely held companies, of which 60 per
cent are family-owned and -managed businesses,
many of which are first-generation family businesses.
It is also important to note that the survey partic-
ipants were chief executive officers, board members
or senior officers with detailed knowledge of their
Firstly, the survey addresses those issues which
companies believe are important as it relates to cor-
porate governance. Figure 1 shows that the issues
in order of priority are integrity and ethical conduct,
tender/procurement practices, board member com-
petencies, conflicts of interest and ownership struc-
ture. See Figure 1.
There are many benefits to be accrued from imple-
menting corporate governance practices. Some of
the key advantages highlighted by participants were
an improved perception by stakeholders, better man-
agement of risks and increased business opportunities
and greater attractiveness to investors. See Figure
2. Of course, findings indicated that although many
are aware of the general risks and potential benefits
of good governance, most are not concerned enough
to check with their business partners about their
corporate governance practices See Figure 3.
Only eight per cent of companies in the survey
were actually being assessed on third party due dili-
gence. This means that the level of risk companies
are exposing themselves to is unnecessarily high.
The survey data shows that:
• Unlisted firms are least concerned about doing
business with others from a corporate governance
perspective, but not enough to actively seek assurance
on corporate governance issues.
• Listed firms have proportionally the highest
concerns; sufficient that they conduct their own
due diligence, which includes corporate governance
compliance with international best practice.
• The third most frequent response given showed
that in doing business with other companies, the
surveyed participants were concerned enough to
require evidence of corporate governance compli-
The most important finding was that different
types of companies emphasize different aspects of
corporate governance. This is welcomed because
corporate governance practices should be uniquely
tailored to the organisation. This is one important
area where this survey s findings differ from com-
monly held views.
Another finding suggests that most boards are
highly operational and are mainly interested in fore-
seeable financial results. Very few have a compre-
hensive understanding of corporate governance and
most see only partial aspects of corporate governance.
The survey data also points to an interesting issue.
It seems that many businesses are generally unaware
of the impact of poor governance on day-to-day
operations by lowering morale and productivity.
However, once questioned, companies realised the
importance of the relationship among corporate
governance, abusive related party transactions, con-
flicts of interest, corruption within their own domain
and risk among other things.
This may best be exemplified by one executive.
"At some point there was a common practice where
staff would have their main job at the company as
well as a business on the side. The company they
worked for would then contract without invoking
due process for conflict of interest situations."
There is a compelling argument for companies to
adopt better corporate governance, and this needs
to be well communicated and supported.
We find that even if the corporate governance
understanding is not comprehensive and not always
completely accurate, companies are assessing the
potential risks and benefits well. What is most needed
is improvement in practices, systems, and ability
through appropriate guidance, training, and tools.
Until recently, there was no customised corporate
governance assessment model for different types of
companies operating in T&T that clearly lays out the
appropriate governance systems and practices for
different ownership arrangements.
The chamber is developing such an assessment
tool which can be currently completed confidentially
on the Energy Chamber s Web site. From this com-
panies will receive feedback on the level of corporate
governance maturity they have attained.
For more information on this article or to com-
plete the survey please visit www.energy.tt or
contact the chamber at 679-6623 ext 29.
BG18 | COMMENTARY
BUSINESS GUARDIAN www.guardian.co.tt JUNE 2013 • WEEK ONE
Corporate governance principles in T&T:
One size doesn't fit all
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