Home' Trinidad and Tobago Guardian : July 11th 2013 Contents BG20 | COMMENTARY
BUSINESS GUARDIAN www.guardian.co.tt JULY 2013 • WEEK TWO
The collapse of the American
Energy company Enron in
2001, the Tyco collapse, cor-
ruption charges against ener-
gy giant Shell, the fall of
Lehman Brothers in 2008
and the recent Barclays libor scandal, provide
evidence that poor corporate governance can
result in large company losses, global financial
meltdowns, and even prison.
The financial disasters of the Hindu Credit
Union and CL Financial in T&To immediately
come to mind as local examples of poor gov-
While other countries in world are making
strides, T&T is failing to adequately address
poor governance and corruption. We can all
readily point to examples of corrupt practices
in T&T, both at the level of the State and
the private sector.
These examples are not limited to political
appointments to state boards and other posi-
tions within companies, but to secret party
financing, nepotism and fraud as well.
Various benchmarking studies provide
support for this argument. For example, the
latest Corruption Perception Index, which
gives a bird's eye view of how country ana-
lysts and business people view the level of
administrative and political corruption in
the public sector, showed that T&T continues
to score well below the median score. In
2012, T&T ranked 80th out of 176 countries
around the world, with a score of 39.
According to the 2012-2013 Global Com-
petitiveness Index (GCI), T&T also performed
poorly on the quality of our institutions---
a rank of 91 out of 144 countries, while cor-
ruption was cited as a major barrier for doing
business in T&T. This underscores T&T's
need to improve its corporate governance
systems and accounting controls.
From the 2012-2013 GCI, it is clear that
among our neighbours and competitors for
oil and gas investment, T&T performs worse
on average on indicators of governance. These
indicators take into consideration our per-
formance as it relates to irregular payments
and bribes, the transparency of government
policymaking, ethical behaviour of firms, the
strength of auditing and reporting standards
and the efficacy of corporate boards. (Refer
to Figure 1).
These failures undermine T&T compet-
itiveness and are barriers to attracting valuable
However, the Energy Chamber of T&T is
taking the lead on strengthening corporate
governance among boards, CEOs and senior
management, members of the public and
the media, through its IDB-funded Improving
Corporate Governance project.
Defining corporate governance
Simply put, corporate governance refers
to a control mechanism put in place to pro-
mote transparency, accountability and cor-
porate responsibility in businesses.
A company which adheres to good cor-
porate governance is one that is sustainable,
has well established relationships with stake-
holders, and importantly, is not involved in
investment scandals and fraud.
While many associate corporate governance
with larger publicly-listed companies, a cor-
porate governance framework also applies to
firms with other forms of ownership (for
example, a sole trader, partnerships or limited
Corporate governance is not just for large
companies. Implementing good corporate
governance practices is equally important
for a large producer of oil and gas as it is for
the owner of a food restaurant or a welding
What is the Energy Chamber's
corporate governance project?
Essentially, the project seeks to strengthen
corporate governance practices among Boards,
CEOs and people in senior management
positions in all companies, including State
enterprises and publicly listed companies.
The objectives of the project are:
1. To build institutional capacity of targeted
companies particularly at the level of senior
management, CEOs and the board of direc-
tors to facilitate their compliance with the
current regulatory framework;
2. To strengthen corporate governance
practices by documenting and disseminating
information and models of international best
3. To strengthen the public's capacity for
advocacy and monitoring of governance prac-
4. To create training models allowing repli-
cation and expansion of training efforts on
the application of corporate governance stan-
dards and practices for directors and man-
In order for these objectives to be realised,
the chamber contracted Syntegra Change
Architects Ltd, in collaboration with Ernst
and Young, as the project's joint consultants.
The consultants are rolling out the project
by developing practical guidelines on cor-
porate governance; providing training and
sensitisation workshops, hosting sensitization
campaigns for key stakeholders and evaluating
the implemented guidelines and dissemi-
nating the results.
Ultimately, the joint consultancy will devel-
op a series of corporate governance guides
based on best practices relevant to the T&T
context. These guidelines will be exposed
to at least 500 decision makers from at least
50 companies, plus a wide range of relevant
stakeholders, including the media. They will
also develop and implement a method for
continued evaluation of corporate governance
practices among Energy Chamber member
and other companies.
Who does the project target?
In keeping with the ideals of good corporate
governance, the project takes a holistic
approach. There are two target groups, the
first of which targets directors, CEOs and
senior management in publicly listed or pri-
vate companies, special purpose companies,
publicly listed and special purpose companies.
The second target group is for other relevant
stakeholders involved in the governance
process as well as members of the public,
NGOs and the media.
How can I become involved?
If you are a board member, company direc-
tor, senior manager or a company decision
maker you can participate in the corporate
governance assessment tool at the Energy
Chamber's Web site at: www.energy.tt. By
participating in this survey, you will help
provide baseline data on corporate governance
practices of local companies.
You can also register with the Energy
Chamber to be a part of one of the ten one
day training workshops on the materials
developed by the consultants.
As members of the media, auditors, watch-
dog groups and other persons of interest,
you can also take part in one of the five one-
day training and information dissemination
Only last week, two of these workshops
were conducted and the turnout was impres-
sive. Hopefully, this signals a change in the
general attitude towards corporate gover-
Contact Ariane Moonsie at ariane@ener-
gy.tt, or call 679-6623, ext 29, to find out
more about the Improving Corporate Gov-
Promoting corporate governance
Energy Chamber's taking lead on
Links Archive July 10th 2013 July 12th 2013 Navigation Previous Page Next Page