Home' Trinidad and Tobago Guardian : November 14th 2013 Contents Acorporate governance code set for launch on
November 26 provides guidance that the
tenure of an independent director should
not exceed a cumulative term of nine years.
The guidance states: "Non-executive directors serving for
more than nine years should be subject to re-election on an
annual basis and subject to particularly rigorous review that
recognises independence as being influenced and potentially
compromised by long-term relationships being established
with senior management and other directors."
Alex Kjorven, a chartered accountant and chief executive
officer of the Caribbean Corporate Governance Institute, said
recommendation 3.1 of the code says boards should undertake
assessment of their independence on an annual basis and dis-
close in the annual report those non-executive directors it
considers to be independent.
Then there is guidance provided that suggests some things
to take into consideration when evaluating independence.
"This is widely accepted practice around the world, in all
types of markets, and for those who choose to adopt, would
not only be a significant step towards transparency and account-
ability with respect to governance practices, but also, and per-
haps more importantly, creates the impetus for critical thinking
and discussion around independence at the board table," said
Kjorven in an interview on Monday at the Institute s office,
14 Alcazar Street, St Clair.
Joining the interview was Axel Kravatsky, chairman of the
Wain Iton, chief executive officer (CEO) of the T&T Stock
Exchange (TTSE), Catherine Kumar, CEO of the T&T Chamber
of Industry and Commerce and Kravatsky were the three main
project partners working on the code, along with 12 other
working group members, with the Institute providing secretariat
functions. Chairman of the working group was retired Court
of Appeal Justice Roger Hamel-Smith.
A 2004 conversation about T&T having a corporate gov-
ernance code led to the Institute getting ready to launch the
code on November 26 at the Hyatt Regency Trinidad hotel
Kravatsky said talk of creating a code in 2004 emanated
from the private sector in T&T and Jamaica, from First Citizens
and the Central Bank of the Eastern Caribbean.
Kjorven said a 2011 survey by Syntegra Change Architects
Ltd---which found the majority of corporations in T&T disclosed
less than 40 per cent of the items recommended by the Inter-
national Standards of Accounting and Reporting (ISAR)---"gal-
vanised" the efforts to create the code.
"Out of 51 recommended disclosure items, Jamaica, with
its various regulations and codes, requires companies to disclose
33 out of the 51. In Trinidad, out of all the legislative require-
ments, companies are only required to disclose five out of the
51 recommended disclosure items," Kjorven said.
"Keep in mind that disclosure is only one element of corporate
governance. A corporate governance code is much more encom-
passing. It is not just talking about what a company should
disclose; it is talking about specific practices and policies and
infrastructures that need to be in place."
Kjorven said the original proposed approach was to target
companies already under a certain level of regulation.
"This would be a smaller gap for them to reach than is
being proposed by the code. Upon discussion by the working
group, we decided to broaden that pool to include companies
with what we call public accountability."
She said beyond the 30 companies listed on the TTSE, com-
panies that hold assets in fiduciary capacity are considered
as companies with public accountability, like insurance com-
panies or other financial institutions that may not be publicly
Kjorven said in undertaking to develop a code for T&T, the
working committee looked at the codes of several countries
with a comparable economic background to T&T s and chose
elements it thought were "most applicable."
"We hope that two years from now there will be a greater
understanding of what s relevant to Trinidad, what should be
added, what should be taken away and a revised code would
be published," Kjorven said.
He said the study by Syntegra, of which he is chairman and
principal consultant, found T&T had the "absolute lowest
number of disclosure requirements in all 53 countries surveyed."
Asked to what extent other countries did better than T&T on
disclosure practices, both Kravatsky and Kjorven said in unison:
"There is no other country in the surveyed world where
the shareholders know less about their company. Nigeria has
28 disclosure items, Sierra Leone has more. The report showed
the average for emerging markets. We are less than 50 per
cent of that, in many cases. In the United Kingdom, everybody
discloses between 48 and 50 items. In Trinidad, people go
from four items to 48 items, like an insurance company or
a bank," Kravatsky said.
"It is a pattern you would find the world over. If you don t
ask people, they won t tell you. But it is unusual, unnatural,
for people not to tell their shareholders what they are doing.
It is not right for the public, in a case of public accountability
companies, not to know how the companies are being gov-
The management expert said the 2011 study provided the
"first ingredient of change" which was data.
"After you have data, you need a challenge. You need all
the stakeholders to come together to say we should perform
at this level, so the Central Bank, the Securities and Exchange
Commission and the listed companies, all of the representatives
in this group, came together and said let us establish a common
Continued on Page 7
BG6 | NEWS
BUSINESS GUARDIAN www.guardian.co.tt NOVEMBER 2013 • WEEK TWO
New corporate governance code looks at
Alex Kjorven, chief executive officer, Caribbean Corporate
Axel Kravatsky, chairman, Caribbean Corporate Governance
PHOTOS: SHIRLEY BAHADUR
Alex Kjorven's bio
Originally from Toronto, Canada, Alex Kjorven is a
member of the Canadian Institute of Chartered Account-
ants, whose career has focused on helping organisations
create solutions that combine business with social im-
Prior to moving to the Caribbean, she served as a
management consultant with Purpose Capital; an advi-
sory practice focused on creating social and environmen-
tal investment strategies for investors and advisers. Her
previous roles include leading the ACCESS Community
Capital Fund in expanding microfinance projects across
the greater Toronto area. Her experiences in the private
sector include senior associate at KPMG LLP, where she
performed due diligence and audit and internal control
evaluations of public and private corporations.
Kjorven often speaks on the topic of social finance, in-
cluding guest lecturing at the University of Toronto's
Faculty of Applied Science and Engineering on social en-
trepreneurship. In June 2012, she co-authored a survey
of the Canadian financial sector on awareness and chal-
lenges related to impact investing.
Kjorven is a bachelor of commerce graduate, specialis-
ing in finance and economics, of Rotman Commerce at
the University of Toronto.
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