Business, society, the economy, science, and human development have advanced in part through the visionary entrepreneurship, the spirit of daring and the willingness of distinguished individuals to go where others have not gone before. Undoubtedly, human society needs such captains of industry, inventors and people who would look at society differently from the rest. However, human history has also shown that when individuals absorb total power to themselves, when there are no checks and counter-balancing forces, they become reckless wielders of enormous power. It is easy to cite political dictators such as Hitler, Pol Pot, Stalin, the Duvaliers, the likes of Rafael Trujillo and countless others who abrogated power unto themselves, and/or were allowed to do so by fanatical supporters. But as we have been hearing in sworn testimony over the last week at the commission of enquiry into the collapse of the CL Financial empire, inclusive of the largest insurance company in the English-speaking Caribbean, Clico, runaway unbridled power in the boardroom can be as dangerous and deleterious to the society and economy.
We are surely aware of the stories of financial loss and human suffering that have resulted from the greed and reckless financial manoeuvring at CL Financial and Clico. Outside of Trinidad and Tobago where governments are less able to salvage companies and give support to investors, the suffering must be ten times worst. From the testimony that has flowed from the former group financial head, Michael Carballo, Lawrence Duprey had total control, did what he pleased above the protest of board directors, and refused to submit himself to proper procedures. Moreover, the testimony indicates that when Mr Duprey chose to, he clothed others with the necessary garments of power to do what he wanted done and "no damn dog bark." But the alleged excesses were not only because of the power of the individual, but ultimately a result of the absence of a strong corporate structure, effective public accountability mechanisms and a modern legislative framework which required disclosures to state financial regulators.
The other startling element of the revelations from the Clico commission has to do with the financial remuneration packages of not only Mr Duprey but others in the hierarchy of the company who were being paid salaries and incredibly large fees. Obviously with the companies going belly-up, the adventures of the executives proved to be unsustainable and without the financial sagacity they were being paid large salaries for. In the instance of Mr Duprey, his alleged $90 million (US$14.2 million) package was above the average US$11 million paid to executives of the largest 500 firms in the US. Amongst those firms were the ones which were crashing during the financial disaster in the US in the 2008-2010 period. But we should not only focus on the squandermania engaged in by Mr Duprey and his cohorts, but on the complete neglect and incompetence of succeeding governments to have failed to put in place a modern regulatory framework to govern companies.
It is a frightening reality of our political system that governments could exist in power without having to account in a meaningful way to the population on such matters. Instead of being required to and judged on the basis of establishing such necessary financial structures, governments continue to slide past critical observation on vital matters of governance, having only to appeal to emotional and tribal sensibilities. We have said it in this editorial space on a number of previous occasions that it is scandalous in the extreme for succeeding governments to have allowed companies such as Clico and the Hindu Credit Union to engage in drawing billions of dollars from investors without the necessary legislation to have them properly account for public funds.
