Good corporate governance reassures overseas investors
Stabroek News
June 25, 2004
Good corporate governance is vital if Guyana is to attract foreign investors who need reassurance that partnerships are secure.
This is one of the observations coming out of a two-day seminar on corporate governance held last weekend that was organised by the Private Sector Commission and the Commonwealth Association for Corporate Governance. Speaking at the seminar were Dr. Maxine Garvey, from the Mona School of Business, UWI; Dr. Srinivas Sampath, from the Commonwealth Secretariat; Rick Bettle, a professional director in New Zealand and Khalil Alli, a chartered accountant with Jack A. Alli, Sons & Co.
Morsha Johnson, manager of legal services at Citizens Bank said corporate governance is very much about common sense.
She notes that bad corporate governance limits growth as revenues can only come from the company itself, since investors are not willing to enter equity partnerships with companies that do not have a good track record.
She adds that if companies fail to implement measures to achieve good corporate governance then a lot will depend on the shareholders being pro-active and applying pressure on directors to reform.
Bernie Fernandes, of John Fernandes Ltd., says the seminar was very useful and it further sensitised corporate executives about the issues of governance.
John Fernandes Ltd., has only one public company with the remaining five being private companies. Nevertheless Fernandes notes that eventually corporate governance will be a standard even for private companies.
He says the issues discussed at the seminar set more firmly in his mind what corporate governance is all about and he says more persons need to be educated on corporate governance procedures.
Chandat Chinatamani, Demerara Tobacco Company's finance manager, believes a seminar of this nature was long overdue because it is necessary to let directors or non-directors know about corporate governance.
Chinatamani says it was sad not to see any member from the securities exchange present at the meeting but he was pleased to see a cross-section of the private sector.
An official from the Guyana Association of Securities and Intermediaries Incorporated(GASCI), which the stock exchange falls under, noted that the association notified the PSC too late of their interest to attend and the seminar was by then fully booked. Chinatamani decried the fact that there are not sufficient numbers of qualified persons to fill available posts on company boards and in many cases the few qualified directors sit on more than one board.
He says companies need to be more transparent since it is critical that shareholders understand the company's affairs and can then participate fully in annual general meetings.
Colin Thompson, chief accountant at Demerara Distillers Ltd. notes that the critical issue of good corporate governance has been addressed at DDL. Thompson says with the institution of corporate governance codes in the UK and in the US this has encouraged large companies to practice good corporate governance.
In the wake of such examples as the Enron scandal, big companies are taking governance issues on board and putting things in place, Thompson says, including setting up an audit committee and making sure that there is a wealth of experience on the board.
He notes that although there are provisions in the Companies Act and the Securities Industry Act to cover corporate governance, other areas still need to be addressed and these would require certain disclosures.