Guyanese have never experienced here anything remotely resembling a developed corporate business culture. Indeed the late Peter d'Aguiar broke new ground when he issued a prospectus in 1957 and invited Guyanese to subscribe for shares in Banks Breweries Limited, Guyana's first public company. The company attracted thousands of shareholders, paid attractive dividends and gave Guyanese a taste of what Mr d'Aguiar liked to call people's capitalism, a form of business enterprise in which the small man had a chance to buy shares and acquire a stake in industry.
Others followed including Mr Michael Brassing-ton with Guyana Refrigerators Limited. That company later experienced severe financial difficulties, partly due to factors beyond its control, and it was encouraging to read that Mr Brassington has been able to find a major investor to help with the debt burden and to provide fresh operating capital and that the company will be resuming full operations in the new year.
But there was never a developed financial and business infrastructure (money market, stock exchange) and businesses often had to borrow short term and at high interest rates. Moreover, with the exception of Mr d'Aguiar's United Force, the political climate was always far left and was never business friendly. Indeed at one stage there was an explicit policy to miniaturise businesses. Many businesses did not survive, others did but could not afford to update their machinery and retool and to remain competitive with their regional counterparts.
There has been a change of front since 1989, leading politicians in both the PNC and the PPP have said clearly that the private sector must be the main engine of growth. But of course it is much easier to destroy than to rebuild. There was some new investment, partly due to privatisation, but there has never been that major flow of new investment, local and foreign, that at one stage many had hoped for, partly due to continuing political instability. But there is still a rudimentary business culture, people as a whole know little or nothing of the world of business, shareholders don't know their rights, investment is still a mini-minority experience and indeed one still senses in some quarters a hangover of socialist attitudes, a resentment of private enterprise and profits. Businessmen still on the whole maintain a fairly low profile though perhaps they are no longer an endangered species. In our Business Supplement, recently restarted under the editorship of Ms Gitanjali Singh, this newspaper has attempted to place a greater focus on business affairs. In addition Mr Christopher Ram in his Sunday Business Page has analysed the accounts of public companies in an effort to create a better understanding of corporate standards and responsibility. But there is still a long way to go to be considered a private sector economy that is supported by the necessary infrastructure, financial and otherwise.
The recent opening of a stock exchange has been a step forward. Trading has been predictably slow as citizens know little about stock markets and prefer to continue to put any savings they may have in the bank, despite the fact that savings rates of interest are very low, indeed below the inflation rate. Public confidence has not been established and this will be partly a question of time and, hopefully, public educational programmes by those who run the market. But a stock exchange will inevitably eventually help to create a mindset that understands and respects investment, and its risks and advantages, and is more business oriented and friendly.
In this context, one must take note of the fact that the Guyana Securities Council, which supervises the stock exchange, has recently promulgated a code of corporate governance for the securities market which calls for specified terms of office for non-executive directors, the need for a public justification to combine the posts of chairman and chief executive officer and that requires the details of the remuneration of executive and non-executive directors to be disclosed. All of these are designed to rectify perceived areas of abuse and to improve the quality of corporate governance. The two-page draft code produced by the council, once finalised, will apply to public companies trading in the securities exchange. It provides for example that: "Non-executive directors should be appointed for specific terms and reappointment should not be automatic; all directors should be subject to shareholder election following their appointments and re-elections thereafter. Appointment to the board should follow formal and transparent procedures; the nomination committee should make recommendations on all new board appointments. Directors should submit themselves for re-election at regular intervals of no more than three years." It further says that an ideal situation to be worked towards would be for a majority of non-executive directors to be independent of management and be free from any business or relationship that could interfere with their independence of judgement.
The Council suggests three mandatory committees on company's boards, audit, remuneration and governance, with the audit committee comprising at least three non-executive directors, a majority of whom should be independent. The remuneration committee should be made up exclusively of non-executive directors and should make recommendations on the company's framework of executive remuneration and both committees should operate independently from managerial interference and from any intrusive business relationship.
Organisations like the Georgetown Chamber of Commerce and Industry, the Guyana Manufacturers Association and the Private Sector Commission have been helping to keep a business culture alive and many individuals have provided voluntary service to these bodies. What is needed now is a better awareness of the opportunities and responsibilities of public companies, an improvement in the quality of business and corporate culture, and some level of public education on the requirements of a private sector economy.