Introduction

• Pages: 1-6

INTRODUCTION

Commonwealth Caribbean Corporate Governance

S F-G

The motivation for the publication of a book on Commonwealth Caribbean corporate

governance is borne out of the observation that corporate governance initiatives have

been developing in the region at a rapid pace, through legislation, case law and codes.

These initiatives have mainly been adopted from the developed countries. Govern-

ments, the public sector, legislators, the judiciary, lawyers, accountants, auditors, the

business community, local and foreign investors, scholars and multilateral agencies,

have need to assess the impact of the legislation, case law and codes on the region given

their specifi c and various roles and responsibilities. The book is therefore designed to

highlight the legislation and the interpretation of the legislation through case law and

the codes of corporate gover nance now implemented in the region.

In the wake of international crises, such as the Maxwell empire scandal in the

UK in the early1990s, the Asian Financial Crisis in the late 1990s,1 the Enron crisis

in the US in the early 2000s and the fi nancial crisis in 2008, robust corporate gov-

ernance frameworks emerged worldwide. This is against the backdrop of the rec-

ognition or better yet, consensus, that one of the main reasons for the various crises

was poor corporate governance as demonstrated in: (i) lack of transparency and

accountability; (ii) weak regulation; (iii) limited shareholder and stakeholder involve-

ment/empowerment;2 and (iv) inattention to risk and risk consequences. Not only

did these crises a ect companies and their shareholders, but a much wider group of

stakeholders including employees, creditors and the community in which the com-

panies operated.

There exists a great deal of literature on, and analysis of, the various fi nancial crises

some of which have been mentioned above. The responses to these crises have included

inter alia, the introduction of corporate governance codes and legislation and more

stringent regulatory frameworks and enforcement strategies. In Europe, the responses

to corporate governance failures have mainly been through soft law and moral suasion

in the form of codes and principles, whereas in the US, the responses were decidedly

in legislative form.3 Multilateral organizations such as the World Bank and the OECD

have established minimum corporate governance standards through their corporate

governance codes. The preamble to the OECD Guidelines states interalia:

Increasingly, the OECD and its member governments have recognized the synergy

between macroeconomic and structural policies in achieving fundamental policy

goals. Corporate governance is one key element in improving economic e ciency

and growth as well as enhancing investor confi dence . . . Corporate governance is

1 Thailand, Malaysia, Indonesia and South Korea.

2 In particular that of minority shareholders.

3 Eg US Sarbanes-Oxley Act 2002.