Over the last fort­night, a lot of opin­ions re­gard­ing the de­ci­sion mak­ing process for choos­ing the nu­mer­ous ap­pointees to State Boards have been aired from the na­tion's pub­lic, busi­ness com­mu­ni­ty and var­ied po­lit­i­cal in­ter­est groups. As you read these words, it is week 3 of the new Gov­ern­ment's tenure and in the first 10 days, there have been 15 Board ap­point­ments to 4 ma­jor State com­pa­nies � a Board of 4 at the com­bined Caribbean News Me­dia Group (CN­MG) and Gov­ern­ment In­for­ma­tion Ser­vices Lim­it­ed (GISL), a Board of 5 at the Na­tion­al Gas Com­pa­ny (NGC) and a Board of 6 at Petrotrin.

This news­pa­per's ed­i­to­r­i­al on Sat­ur­day, Sep­tem­ber 19, ap­plaud­ed the speed with which these key ap­point­ments were made to in­sti­tu­tions which should be at the top of the pri­or­i­ty list, and the high qual­i­ty of can­di­dates post­ed to the roles of Chair­man. The ed­i­to­r­i­al ap­plaud­ed what ap­peared to be pre-plan­ning for this process ev­i­denced by find­ing suit­able, will­ing can­di­dates who agreed to shoul­der the im­mense re­spon­si­bil­i­ties, time com­mit­ment and en­er­gy out­lay as­so­ci­at­ed with these posts.

Even with such a pos­i­tive as­sess­ment, the cur­rent re­al­i­ty is that over 50 to 80 En­ter­pris­es re­main, de­pend­ing on whose da­ta you use, with over 900 Board roles left to be filled. That size­able num­ber of ap­pointees with the right and nec­es­sary cre­den­tials, from a very small pool of qual­i­fied can­di­dates high­light the chal­lenges fac­ing the new ad­min­is­tra­tion. These are to find, as­sess, se­lect and ap­point a large num­ber of qual­i­fied peo­ple in a very short pe­ri­od of time to some very im­por­tant, im­pact­ful and in­flu­en­tial po­si­tions.

1000 po­si­tions in 100 days means 70 ap­point­ments per week with­out tak­ing week­ends off. Is this re­al­is­tic or even nec­es­sary and how can this be judged? What is clear through the cloud of emo­tions sur­round­ing this top­ic, is that no agreed set of rules, cri­te­ria or guide ex­ists to gov­ern the iden­ti­fi­ca­tion, vet­ting, se­lec­tion and ap­point­ment of Di­rec­tors to these crit­i­cal in­sti­tu­tions. We ex­pe­ri­ence this con­fused re­al­i­ty in the ex­am­ple of whether an in­cum­bent Di­rec­tor should re­lin­quish his or her ap­point­ment in or­der to al­low the new ad­min­is­tra­tion to fill their posts.

The TT Cham­ber of Com­merce com­ment­ed on ex­act­ly this dur­ing its week­ly Ra­dio pro­gramme of Sep­tem­ber 15th. "It is es­sen­tial that the new gov­ern­ment does not al­low this (se­lec­tion) process to in­ter­fere with the smooth con­duct of the coun­try's busi­ness. All too of­ten we have wit­nessed the tac­tic of al­low­ing cer­tain boards to lapse, to the detri­ment of the work of that en­ter­prise. The trick­le-down ef­fect can be sig­nif­i­cant � projects stalled or slowed, ten­der­ing process­es de­layed, and ne­go­ti­a­tions abort­ed. All of this trans­lates in­to a mas­sive run on the pub­lic cof­fers."

More­over, while it is im­por­tant for changes in board com­po­si­tion on the ba­sis that gov­ern­ment ap­point­ed di­rec­tors are most mo­ti­vat­ed to align their re­spec­tive com­pa­nies' medi­um and long term strate­gic ob­jec­tives with the macro pol­i­cy for­mu­la­tions of the new gov­ern­ment, this ur­gency must be seen in the con­text that the in­cum­bents are statu­to­ri­ly re­quired to act in the best in­ter­est of the com­pa­ny. This gen­er­al­ly means that the in­cum­bents are not stop gaps or hold­ing on while new di­rec­tors are ap­point­ed. The busi­ness of the com­pa­ny con­tin­ues notwith­stand­ing the changes in (the iden­ti­ty of) Cor­po­ra­tion Sole and the line Min­is­ters who may be re­quired to pro­vide gen­er­al or spe­cif­ic pol­i­cy di­rec­tions.

To ad­dress why there is not yet a stan­dard, tried and test­ed rou­tine for the ap­point­ment process we must first take some step backs to un­der­stand what the Gov­ern­ment is try­ing to ac­com­plish and then de­sign or as­cribe a process to achieve the best out­come. While this ap­pears to be a very com­pli­cat­ed prob­lem, it should not be if some very sim­ple and fun­da­men­tal ques­tions are asked.

In its sim­plest form, a State En­ter­prise should ei­ther ex­ist to pro­mote pub­lic pol­i­cy ob­jec­tives or to man­age the State's eco­nom­ic or cul­tur­al as­sets in the most vi­able way avail­able. How­ev­er, chal­lenges arise in en­sur­ing that the role of the state as ma­jor­i­ty own­er is suf­fi­cient­ly in­volved to en­sure that the En­ter­prise is ful­fill­ing its pur­pose. Al­so there needs to be struc­tures in place to pro­tect against ex­ces­sive state in­ter­ven­tion and any abuse as­so­ci­at­ed with the pro­vi­sion of mo­nop­o­lis­tic goods or ser­vices.

To im­prove this sit­u­a­tion, the sec­tor must de­vel­op its Gov­er­nance Mod­el to so that the State En­ter­pris­es are head­ed by an ef­fec­tive Board, which is col­lec­tive­ly re­spon­si­ble for the long-term suc­cess of the com­pa­ny. This is the pre­vail­ing and most ac­cept­ed glob­al mod­el for Cor­po­rate Gov­er­nance which is recog­nised in Trinidad and To­ba­go through the OECD guide­lines on which the Trinidad & To­ba­go Cor­po­rate Gov­er­nance Code (TTCGC) 2013 was de­vel­oped.

This means that best prac­tice re­quires a new gov­ern­ment to not sim­ply give in­struc­tions to ex­ist­ing di­rec­tors that they are not au­tho­rized to ex­e­cute con­tracts (as present­ly oc­curs) but for the line Min­is­ter to de­ter­mine who his/her new chairs will be and to make the ap­point­ments as soon as pos­si­ble on the ba­sis that the new chairs will as­sess the com­pe­tence of the ex­ist­ing di­rec­tors and, if nec­es­sary, make rec­om­men­da­tions for sub­sti­tu­tions. This will al­so en­able the boards to con­tin­ue op­er­at­ing so that the com­pa­nies' busi­ness will not be ham­strung and the in­ter­ven­ing pe­ri­od will al­low for a mea­sured and dis­pas­sion­ate analy­sis of com­pe­tence and loy­al­ty to be car­ried out.

The Code

In 2013, the Caribbean Cor­po­rate Gov­er­nance In­sti­tute (CC­GI), the Trinidad & To­ba­go Stock Ex­change and the Trinidad & To­ba­go Cham­ber of In­dus­try of Com­merce worked in part­ner­ship to pub­lish the Trinidad & To­ba­go Cor­po­rate Gov­er­nance Code. This im­por­tant Code ap­plies to all or­ga­ni­za­tions with­in Trinidad & To­ba­go "with a pub­lic ac­count­abil­i­ty". Read­ers may be sur­prised to learn that the pro­vi­sions in the Code ap­ply to all of the 59 or­ga­ni­za­tions in Trinidad & To­ba­go that the Gov­ern­ment cur­rent­ly holds shares. The rec­om­men­da­tions in the Code con­cern­ing the se­lec­tion and ap­point­ment of board mem­bers are list­ed in the box. New Gov­ern­ment Min­is­ters, Per­ma­nent Sec­re­taries, CEOs, Cor­po­rate Sec­re­taries, di­rec­tors and oth­er of­fi­cers of Pub­lic Bod­ies all have a role to play in ap­ply­ing the Code.

The Caribbean Cor­po­rate Gov­er­nance In­sti­tute (CC­GI) has a man­date to cre­ate ef­fec­tive or­ga­ni­za­tions and ef­fi­cient mar­kets through board di­rec­tors that can be trust­ed (based on their train­ing, con­tin­u­ous de­vel­op­ment, and pro­fes­sion­al val­ues that they for­mal­ly com­mit to as pro­fes­sion­al mem­bers), and the re­search, pub­li­ca­tion, and mon­i­tor­ing of cor­po­rate gov­er­nance best prac­tice stan­dards ap­pro­pri­ate for the Caribbean. As part of CC­GI's pro­gramme aimed at pub­lic di­rec­tor­ships, the CC­GI aims to sup­port Gov­ern­ment Min­is­ters, Per­ma­nent Sec­re­taries, CEOs, Cor­po­rate Sec­re­taries, di­rec­tors and oth­er of­fi­cers of Pub­lic Bod­ies in im­prov­ing gov­er­nance in the pub­lic sec­tor with­in Trinidad & To­ba­go.

The CC­GI is a re­gion­al, in­de­pen­dent, non-prof­it, pro­fes­sion­al mem­ber­ship or­ga­ni­za­tion reg­is­tered with the Ac­cred­i­ta­tion Coun­cil of T&T. CC­GI is the award body that pro­vides the Cer­tifi­cate and Diplo­ma in Cor­po­rate Gov­er­nance and the Char­tered Di­rec­tor qual­i­fi­ca­tion through­out the Caribbean. CC­GI wel­comes mem­ber­ship ap­pli­ca­tions and par­tic­i­pa­tion in its cours­es and events through­out the re­gion. +1 (868) 221-8707 www.caribbean­gover­nance.org

5 Ba­sic Ques­tions on why State Boards ex­ist and the need for Di­rec­tors:

�2What do these State En­ter­pris­es do?

All state en­ter­pris­es should de­fine what their pur­pose or mis­sion is and this state­ment should be pub­lished on their web­site and in their an­nu­al re­port.

�2Is there re­al­ly a need for a Board?

Yes. All state en­ter­pris­es should be head­ed by an ef­fec­tive Board, which is col­lec­tive­ly re­spon­si­ble for the long-term suc­cess of the com­pa­ny.

�2 How many and what type of peo­ple are need­ed on a Board?

Too few or too many di­rec­tors can pose prob­lems for ef­fec­tive de­ci­sion-mak­ing. A board with too few mem­bers may not al­low the En­ter­prise to ben­e­fit from an ap­pro­pri­ate mix of skills and ex­pe­ri­ence. A larg­er board, on the oth­er hand, is typ­i­cal­ly more dif­fi­cult to man­age, and can make con­sen­sus-build­ing both time-con­sum­ing and dif­fi­cult. The chal­lenge in se­lect­ing the cor­rect board size is strik­ing an ap­pro­pri­ate bal­ance. All state en­ter­pris­es should choose a board size that will en­able them to: hold pro­duc­tive, con­struc­tive dis­cus­sions; make prompt, ra­tio­nal de­ci­sions and ef­fi­cient­ly or­ga­nize the board com­mit­tees' work.

�2 Who de­cides that some­one can be­come a Board mem­ber?

In most cas­es, the ap­point­ment of board mem­bers to state en­ter­pris­es is de­fined by Statute with the Gov­ern­ment Min­istry nor­mal­ly play­ing the lead role in the ap­point­ment process. How­ev­er, many com­men­ta­tors ar­gue that the chair­man of the board and the board nom­i­na­tions com­mit­tee can play a very use­ful part in this process.

�2 What cri­te­ria and as­sess­ment process should be used?

In the ide­al sit­u­a­tion, the Min­istry and the board should to­geth­er iden­ti­fy the knowl­edge, com­pe­ten­cies, and ex­per­tise that the board needs and sub­se­quent­ly they should de­vel­op a per­son spec­i­fi­ca­tion which iden­ti­fies the knowl­edge, skills, and per­son­al at­trib­ut­es that a di­rec­tor would need to pos­sess to fill this need. A suit­able can­di­date that fits these at­trib­ut­es should then be se­lect­ed.

What is the ex­pec­ta­tion of the Board re­gard­ing Cor­po­rate Gov­er­nance

Trinidad & To­ba­go Cor­po­rate Gov­er­nance Code (TTCGC) 2013

Prin­ci­ple One

Es­tab­lish a Frame­work for Ef­fec­tive Gov­er­nance:

Every com­pa­ny should be head­ed by an ef­fec­tive Board, which is col­lec­tive­ly re­spon­si­ble for the long-term suc­cess of the com­pa­ny.

Rec­om­men­da­tion 1.2

The chair­per­son of the Board should be a non-ex­ec­u­tive Di­rec­tor and prefer­ably an in­de­pen­dent Di­rec­tor. Where the chair­per­son of the Board is not an in­de­pen­dent non-ex­ec­u­tive Di­rec­tor, the Board should ap­point a lead in­de­pen­dent Di­rec­tor.

Rec­om­men­da­tion 1.3

The Board should demon­strate eth­i­cal lead­er­ship, which in­cludes com­mit­ment to high eth­i­cal stan­dards and re­spon­si­ble de­ci­sion-mak­ing.

Rec­om­men­da­tion 1.5

The Board should take in­to ac­count the le­git­i­mate in­ter­ests and ex­pec­ta­tions of all stake­hold­ers. There should be ac­tive co-op­er­a­tion be­tween cor­po­ra­tions and stake­hold­ers in cre­at­ing wealth, em­ploy­ment, and the sus­tain­abil­i­ty of fi­nan­cial­ly sound en­ter­pris­es

Source: https://caribbean­gover­nance.org/T&T-Cor­po­rate-Gov­er­nance-Code-2013-(TTCGC-2013)