What is Corporate Governance? In a Nutshell
Coming together as a small business to launch the first Caribbean Corporate Governance conference is no easy task. We began to ask ourselves – What exactly Corporate Governance means to the average businessman in the Caribbean?
The best analogy we have found is corporate governance is what a playbook is to a sports coach. The playbook to a coach is his strategy for the game. The corporate governance framework articulates what you are trying to achieve, your strategy to your investors, employees, community and suppliers. All it takes is one player to make the wrong move in the game and your team is out of the tournament. In business, all it takes is the supply chain to fail or family dynamics that can put your business at risk of losing your place in the market.
We recognize many businesses of all sizes in the Caribbean probably need some help with their playbook and many companies still do not think it is necessary. At the same time, we watch the news of the fall of Enron and corporate scandals that are a result of poor corporate governance. Risk must be controlled properly. Rules, relationships, systems and processes must be held to account for a business of any size to be successful.
If you are looking to expand your business within the Caribbean or export to other regions, you must be able to demonstrate good governance, social and ethical business practices.
We recognize there is no universally approved standard model for SMEs however based on our research, we have selected the Corporate Governance Code For Small and Medium Enterprises (Dubai) as a model example to follow for SMEs in the Caribbean. Of course, for further information, we would direct you to multiple sources for their perspective such as the Caribbean Corporate Governance Institute and the Governance Institute in the UK as two good organisations to partner with for your business.
The Dubai Corporate Governance code for SMEs covers six main sections:
• Corporate Governance Policies and Procedures
• Transparency and Shareholder Relations
• Board of Directors
• Control Environment (internal controls, audit and risk management)
• Stakeholder Relations
• Family Governance
Given our knowledge that many small and medium size businesses have no corporate governance structure, are extremely busy, understaffed and have no time to write process – we have re-prioritized this list:
• Corporate Governance Policies and Procedures
• Control Environment (internal controls, audit and risk management)
• Family Governance
• Board of Directors
• Transparency and Shareholder Relations
• Stakeholder Relations
As we further develop the conference program, we will be addressing these 6 areas over the next six months. The first thing you can do is to set up a Board meeting with your directors or owners of the business and discuss what is your priority based on the list above and what is making you lose sleep.
If you are not losing sleep and moving at pace, then this is a good time for reflection to map out your playbook and determine what you need to get in order to make the next move in the game.
Taking your business to the next level by developing a corporate governance structure will set a level of self-discipline and show your investors, suppliers, employees and customers of the sincerity in your operations and your prudent attitude towards risk. Over time, this will become second nature.
Find your own way when it comes to building a governance framework however look at the features that are universally applicable such as reporting lines, decision making processes and balance of skills.
Join us on this journey and follow our updates, tips and advice as we countdown to Caribbean Corporate Governance Conference. If you would like to partner with us, say hello at admin@caribbeancorporategovernance.com
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