On Thursday evening, the new executive chairman of First Citizens Bank, Anthony Smart, delivered remarks at a Caribbean Corporate Governance Institute (CCGI) event. Smart's speech came just hours following the publication of the last Business Guardian, which contained a stinging letter from shareholder activist Peter Permell, which gave reasons why the bank should not have an executive chairman, including the fact the CCGI frowns on it. In what the bank dubbed as "somewhat of a response to Peter Permell's letter", Smart explained how the same corporate governance code referred to by Permell allows for his new position.
It gives me great pleasure to be here with you this evening at this Caribbean Corporate Governance Institute networking Event. First Citizens continues to be as closely associated with the Caribbean Corporate Governance Institute as we were when the Bank took on the responsibility of being a founding sponsor of the Institute.
We at First Citizens retain our close links because we are convinced that T&T and indeed the entire Caribbean need to build on the foundation that has been laid for the continued emergence of strong and successful corporations.
Shareholders, corporate and individual, are no longer passive, if indeed they were so in previous decades. Along with actual investors in corporations, even the general public is conscious of the need for effectively and efficiently governed business entities.
They, the public, realise that quality governance converts into jobs, revenues and a higher standard of living for all. Similarly, the public and direct investors know that weak structures and opaque governance systems must result inevitably in corruption of one form or the other and the inevitable weakening of the business.
Especially for small economies and regions competing in a world of giant corporations, many of them with budgets and structures larger than our entire economies and region, high-quality and productive governance systems are a necessity for growth.
It is because we at First Citizens have taken time over the last 20 plus years of the Bank's establishment to build sound governance structures, that the Bank has been able to prevail over the challenges of 2014.
It is this pillar of corporate governance consisting of management structures, transparency, accountability and having experienced and high calibre senior management, which has brought First Citizens through the challenges associated with the Bank's highly successful Initial Public Offering.
As you would be aware, our corporate governance structure was expanded by the IPO to now include 12,000 plus shareholders. We feel sure that they will monitor and have their say at our annual general meetings will thereby add another dimension to corporate governance.
Today, after a short 21 years, First Citizens has moved from being a weak financial institution that came into existence from three banks in severe financial difficulties to becoming one of the largest and most secure indigenous financial services group within Caricom.
In no small measure the achievement of such success has been due to the sound corporate governance structure instituted. It is a structure which is being continuously built upon by the board and management of First Citizens.
During its existence, First Citizens has been given the highest rating among local and regional banks by international rating bodies. Admittedly those high ratings have been marginally adjusted downwards by one rating agency because of the challenges experienced with the IPO. But we fully expect that the bank's ratings will once again climb upwards as the international rating agencies see continued profitability and growth flow from our strong corporate governance system.
As an executive chairman, put in the job for a temporary period, it may seem contradictory that we are talking about pursuing quality corporate governance while you have heard that no one individual should hold the positions of CEO and chairman.
And yes it is a fact that there should be a separation of powers between the CEO and Chairman in order to achieve transparent and effective corporate governance. However, the Code itself provides that such a structure may be permitted in exceptional circumstances once the majority shareholder is consulted and approval is given.
In our situation, once the former CEO tendered his resignation without notice, the board therefore sought the approval of the majority shareholder to my appointment as executive chairman while a permanent CEO is recruited.
The Board considered that this was the best option in the circumstances. This appointment is a short term measure and the board fully expects that a new CEO will be in place before the end of June 2015.
In the interim, as executive chairman I have the assistance of an experienced banker as a consultant and indeed the assistance of the executive management of First Citizens as I continue the journey of ensuring that First Citizens is properly directed and controlled.
On behalf of all of us at First Citizens, I wish you and your family God's greatest blessings at this year's celebration of the birth of Jesus.