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Good corporate governance urged by ACCA official
Good corporate governance practices are important in developing capital markets and creating conditions suitable for foreign direct investment (FDI), Shane Kissoon, Southern Caribbean Manager, Association of Chartered Certified Accountants (ACCA), said yesterday.
“The various arms of the finance profession have a critical role to play in ensuring good governance practice as a means of inspiring public trust and confidence. In the last budget presentation, several initiatives were announced in relation to increased activity in the local stock exchange.
“Capital markets play an important role in generating economic activity. It shapes the developing world by driving wealth creation and powerful regional trading blocs,” he said in his contribution to seminar hosted by Institute of Internal Auditors (IIA) T&T Chapter at the Arthur Lok Jack Graduate School, Mt Hope. Kissoon said when potential investors look for a country to put their billions of dollars, they look for good corporate governance which involves proper disclosure practices.
“That is why it is important to improve disclosure which will attract additional lists and in this way brings additional benefits to the economy. “Disclosure plays an important role in enhancing corporate governance, accountability and business success. Clearly the challenge of ensuring there is greater disclosure falls under CEOs and chief financial officers,” he said.
“The guiding principles of good corporate governance are there to protect and facilitate the exercise of shareholders rights. To ensure strategic guidance and monitoring of management by the board. To ensure timely disclosure is made on all material matters. Also, recognise the right of stakeholders and to promote transparent and efficient markets.” He added it is important that CEOs and CFOs use the available guidelines on corporate governance.
“It is important in an increasingly globalised world the world is watching. This may be difficult to achieve in emerging economies where there can be pressure from extended families, hierarchical structures relating to heads of families and tribalism. Economic influences can be from tax levels, renumeration and inflation. There may also be problems with shareholders holding boards to account,” he said.
Kissoon said while there is no universal standard globally for corporate governance, more than 100 countries have developed at least one governance code. “T&T now lists among them. From managing risks to disclosures, businesses and other organisations from around the world need to get corporate governance right,” he said.