ASSIGNMENTCOVERSHEET

AIBstudentIDnumber:

Studentname:

JasonGraham

Coursename:

MasterofBusinessAdministration(Finance)

Subjectname:

CorporateGovernance

Subjectfacilitator:

Mr.WayneWood

TeachingCentre:

SchoolofHigherEducationLimited,SanFernando,Trinidad

No.ofpages:

24

Wordcount:

2737
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(tobecompletedbytheexaminer)

Studentname:

JasonGraham

Coursename:

MasterofBusinessAdministration(Finance)

Subjectname:

CorporateGovernance

Assessor/marker:

COMMENTS

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Gapanalysisonthecorporategovernancepracticesasitrelatestotheconformanceof
GuardianGrouptocorporategovernancecodeofTrinidad&Tobago

Assignment Statement

Conductareviewofthegovernanceofyourorganization(oronewithwhichyouarefamiliar)
andwriteareportwithyourfindings.Usetheconcepts,toolsandtechniqueslearnedinthis
subjecttoreviewthestructure,processandeffectivenessofthegovernanceofthe
organization,andtomakerecommendationsforappropriateimprovements.Thesefocus
questionscouldguideyouinwritingyourreport:
1. Inwhichaspectsofcorporategovernancehasyourorganizationbeenreasonably
successful?Discusswhathasledtothesuccessandhowitcouldbesustained.
2. Inwhichaspectsofcorporategovernancehasyourorganizationfailedorbeenless
successful?Discussthereasonsforthisandwhatcanbedonetoaddressthem.

Approach

Inthisassignment,Iveadoptedtheroleofanindependentconsultanttotheboardofdirectors
ofGuardianGroup.Aspartofthegroupspolicy,anindependentreviewoftheboardandits
operationsismandatedtooccureverythreeyears.Thisreportisthedeliverablefromthe2015
review.Itisexpectedthatafterbeingreviewedbytheboardofdirectorsitwouldbepresented
tothekeystakeholdersasanassurancethatgoodcorporategovernanceisbeingadheredtoo,
andwheregapsareidentified,adefinedplanofactionisinplacetoaddressthedeficiencies.

3|P a g e

JGConsultantsLimited
1MoreauRoadMarac
Moruga
18thJune,2015
TotheChairman,
GuardianHoldingsLimited(GHL)

Report

Gapanalysisonthecorporategovernancepracticesasitrelatestotheconformanceof
GuardianGroupitscorporategovernancecode

4|P a g e

ExecutiveSummary

Whenwealthislost(profits,financialperformance),verylittleislost;whenhealthislost(an
unviablebusinessmodelorplan),somethingislost;butwhencharacterislost(integrity),
everythingislost.

ThisfamousquotebyevangelistBillyGrahamisnotedandadoptedbyTerrenceMartinsinhis
commentaryoncorporategovernanceasitrelatestoinvestmentanalysisandcreditratings.It
isanaptstarttoadiscussiononcorporategovernanceassuchissuesifnothandledadequately
couldquicklyresultinaruinedcompanyreputationandconsequentialdropinsharepricesas
seenwithEnron,WorldComandTyco.Suchconsequenceshavepropelledthecurrent
institutionallogiconcorporategovernanceawayfromafocusontheorganizationintoarealm
whichfocusesonshareholders.Organizationneedtobecarefulhoweverwithimplementing
structuresandpolicythatonlyappeartosatisfyregulatoryrequirementforgoodgovernance
whileinessencenotembracingthespiritthatemanatesfromsaidregulations.

GuardianHoldingsLimited(GHL)hasbeenabletomaintainastablelongtermcreditratingover
thelastseveralyears.Aslocallawsbecomemorestringenttoensurenationalcompliancewith
internationalfinancialagencies,GHLcouldseethisratingfalliffailstotrulycomply.Ananalysis
ofitscorporategovernancepracticesrevealsminordeficienciesaroundthestructureofkey
boardcommitteesandtheannualperformanceassessmentthatisrecommendedinthe
Trinidad&Tobagocorporategovernancecode.

Thesituationisevaluatedagainstcontemporaryliteratureonthesubjectofcorporate
governanceandseveralrecommendationsarepresented.Theseinclude
1. Assignmentofanindependentdirectortoleadthecoreremunerationandnomination
committee.
2. Periodicevaluationofthedirectors,theboardanditscommittees.
3. Improvedreportingoncorporategovernanceissues
5|P a g e

TableofContents
AssignmentStatement..................................................................................................................................3
Approach.......................................................................................................................................................3
ExecutiveSummary.......................................................................................................................................5
Introduction..................................................................................................................................................7
CompanyBackground...................................................................................................................................9
Problemstatement.....................................................................................................................................10
DataCapture...............................................................................................................................................10
LiteratureReviewandAnalysis...................................................................................................................12
BoardStructureandComposition..........................................................................................................12
TheGovernanceProcess.........................................................................................................................16
Recommendations......................................................................................................................................18
Conclusion...................................................................................................................................................19
Appendix1Unitaryvs.TwoTierboardstructure....................................................................................20
Appendix2OrganizationalStructure........................................................................................................21
References..................................................................................................................................................22
ListofFigures..............................................................................................................................................24
ListofTables...............................................................................................................................................24

6|P a g e

Introduction
UnliketheSarbanesOxleyActof2002whichimposed,oncompaniesincorporatedinUS,
mandatoryrequirementsaimedatprotectingshareholderscompaniesinTrinidadand
Tobagocanchoosetocomplywiththecorporategovernancecodeorexplainwhytheyhave
notorcannotcomply.Thiscomplyorexplainapproachhingesonthephilosophythata
standardizedapproachtogovernancewillnotfitallorganizationsandassuch,hopesthat
organizationswouldacceptthespiritofthecodebyintegratingitintopoliciesthatare
applicabletotheorganization.Thisapproachreliesheavilyontheconscienceofshareholders
whoareexpectedtopenalizeorganizations,whofailtocomplywithoutajustifiablereason,by
sellingtheirstakeintheseorganizations(Walker,S,CorporateGovernance:ItseffectonShare
Price,2013).
Thisrelianceonshareholdersiscentraltothecurrentinstitutionallogicofcorporate
governancewhichspeakstomaximizingshareholderswealth(Joseph,J,Ocasio,W&
McDonnell,MH,2014).Afterall,corporategovernanceissueswerebirthedinthewakeofthe
separationofcorporationownershipandcontrol.Thecontrollers(management,boardof
directors)areimploredtoactinthebestinterestoftheowners(shareholders)(OECDPrinciples
ofCorporateGovernance,2004).Fromthiswederiveadefinitionofcorporategovernanceas
being
Asetofrelationshipsbetweenacompanysmanagement,itsboards,itsshareholdersand
otherstakeholders,whichalsoprovidethestructurethoughwhichtheobjectivesofthe
companyaresetandthemeansofattainingthoseobjectivesandmonitoringperformanceare
determined(OECD)
Themainobjectiveofsuccessfulcompaniesisattainingandsustainingcompetitiveadvantage,
evidencedbyahealthysharepriceandannualprofits.Thephilosophyofgoodcorporate
governancesuggestsadherencetofivekeyprinciples,isthebestmeansthroughwhichthis
objectiveshouldbepursued.TheseprinciplesformtheheadlinesoftheTrinidad&Tobago
corporategovernancecode(TTCGC).
1. Leadership
2. Effectiveness
7|P a g e

3. Accountability,
4. Remunerationand
5. Relationshipwithshareholders
GuardianHoldingsLimited(GHL)believesthatadherencetothecodefacilitatesactiveco
operationbetweenthecompanyanditsstakeholdersincreatingasustainableandfinancially
soundenterprises(GHLCGReport,2013).GHLbeensuccessfulinimplementingseveralkey
aspectsoftheTTCGC,howeverthereareseveralimportantareaswhereitshouldseek
improvement.Thisreportanalyzestheseareasandmakesrecommendationsonhowthese
shortcomingscouldbeaddressed.

8|P a g e

CompanyBackground
(GuardianGroupWebsite;InvestorRelationspage)
GuardianHoldingsLimited(GHL)isaholdingcompanyformedin1982andbecameapublicly
listedcompanyinTrinidad&Tobagoin1996.GHLssubsidiariesprovidefinancialservices
throughtheproduction,distribution,andadministrationofinsuranceandinvestmentproducts.
GHLsoperationsareconductedprimarilythroughouttheCaribbean.Howeverseveralservices
areselectivelyprovidedworldwidethroughtheGroupsinternationalbusinesssegment.There
arethreemainbusinesssegments:
1. LifeandHealthInsurance,andPensions
2. PropertyandCasualtyInsuranceand
3. AssetManagement.
GHLisratedbyratingfirm,A.M.BestCompanyInc.(AMB),andoverthelastcoupleyearshas
consistentlyreceivedalongtermcreditratingofBBB.ThisratingdescribedbyAMBas
adequate,isthelowestacceptableratingonitsInvestmentGradescale.ItmeansGHLhas
adequateabilitytomeetthetermsoftheobligation;howevertheissueismoresusceptibleto
changesineconomicorotherconditions(GuidetoBestsDebtandIssuercreditrating,2014).
In2014,thecompanyrealizedaprofitofover$TT400million($US62M)andanearningsper
share(EPS)of$TT1.62.

9|P a g e

Problemstatement

Inthewakeofseverallargeinternationalscandals,therootcauseofwhichhasbeen
determinedtobepoorcorporategovernance,theinstitutionallogicofcorporationshasforcibly
developedakeenfocusonsecuringshareholdersinterest.Thelocallegalresponse,the
TTCGC,providesguidingprinciplesbutminimaltemplatesforimplementation.Assuch,itleaves
itselfopentoindividualinterpretation.TheboardofGHLhasmadeaconcertedeffortto
developstructures,processesandpoliciesthatdemonstratecompliancetotheTTCGC.
However,thereareseveralkeyareaswheretheyseemtomissthespiritofthecode;
1. Theindependenceofthechairmanforakeyboardcommittee
2. Theperiodicevaluationoftheindividualdirectorsandtheboardasawhole
3. Thereportingofkeycorporategovernanceissuestoitsshareholders

DataCapture

AsGHLislistedontheTrinidad&Tobagostockexchange,manyofthedocumentsrequiredto
executethisanalysisareeitherinthepublicdomainoravailablefromthecompanyswebsite.
Thefollowingdocumentswereobtained
1. Guardiangroup2013corporategovernancereportwhichdetailsthecorporate
governancepolicyadoptedbyGHLinJanuary2013.Thepolicyisadirectresponseto
GHLsadoptionoftheTTCGC.Italsoexplainsthestructureandcompositionofthe
boardanditscommittees.Init,the2013committeesreportsarepresented.
2. Guardiangroup2014Annualreport.Thisreportwaspresentedandapprovedatthe
companys2014annualmeetingofshareholders.Thefinancialstatementcontained
thereinisonlyasummaryandtheexternalauditorscarefullynotedthatThesummary
consolidatedfinancialstatementsdonotcontainallthedisclosuresrequiredby
InternationalFinancialReportingStandards.Readingthesummaryconsolidated
financialstatements,therefore,isnotasubstituteforreadingtheauditedfinancial
statementsoftheGroup(GHLconsolidatedfinancialstatement,2014).Thisis
10|P a g e

reminiscentoftheSOX(section302&906)whichmandatesthatannualfinancialsbe
certifiedbytheprincipalfinancialofficer.Fromthisdocumenttheorganizations
financialperformanceisgivenaswellastheboardcommittees2014reports.
3. TheorganizationstructureofGHLandprofilesofitsdirectors

Toassessthedataobtained,thefollowingdocumentswereused

TheTrinidad&Tobagocorporategovernancecode2013(TTCGC)

TheUKcorporategovernancecode2014(UKCGC)

TheSarbanesOxleyActof2002

TheCadburyreportof1992

TheanalysisofthedatacollectedsuggestthatGHLhascompliedwiththeTTCGCasfarasit
relatesto

Acceptableboardstructure

Annualfinancialreportingtostakeholders

InclusionofshareholdersinannualmeetingsandtheuseofProxyvotingtofacilitate
shareholderinvolvement

However,italsohighlightsseveralkeydeficienciesasnotedintheproblemstatementabove.

11|P a g e

LiteratureReviewandAnalysis

Board Structure and Composition

Figure1Possibleevolutionofboardcomposition(InfluencedbyWilliamPoundslectureon
corporategovernance.ViewedonYOUTUBEhttps://youtu.be/PC_acEzfL9Q)

Thoughtheliteraturedoesnotalludetothebestboardcomposition,itnotesthatmostpublicly
listedcompanytendstohaveaunitary,mainlynonexecutiveboard.GHLshasaunitaryboard
composedofamajorityofnonexecutivedirectorshavingelevendirectors,onlythreeof
whomareexecutivedirectors(SeeTable2below).

12|P a g e


Composition TypicalApplicability

Defining
Characteristic

Advantages

Entirely
executive

Smallfirms,familyrun
companies,startup
business

Directorsarealsotop
management
personnel

Easy tosynergize
strategy
formationwith

execution

Mainly
executive

Growingbusiness
requiringrefinedstrategy
andmoreexternal
financing

Availabilityof
perspective
independentof
management

Mainlynon
executive

Publiclylistedcompanies

Somedirectorsare
experiencedsubject
matterexperts
recruitedtoassist
board
Stakeholderscan
influenceappointment
ofindependent
directors

Directorsdrawnfrom
interestgroups

Greaterboard
independence
Increasedaccess
toexternal,low
costcapital.
Different
perspectives
represent
stakeholder
interest
Board
independence

Entirelynon
executive

Nonprofitentities
Subsidiarycompanies

Disadvantages

Noboard
independence
CEOand
Chairman
typicallythe
sameperson
Lowboard
independence

Executive
directors
interfacewith
company&have
alotofpower
Otherwise
employed
directorshave
limitedtime
dedicatedto
governing
organization.
Heavyreliance
onCEOfor
interfacewith
management

Table1Comparisonofboardcomposition

TheTTCGCmakesspecificrecommendationonboardcompositionbutnotitsstructure.The
recommendationsarebasedontheprinciplethatthereshouldbeabalanceofindependence
anddiversityofskills,knowledge,experience,perspectivesandgenderamongdirectorssothat
theBoardworkseffectively(TTCGC2013).
TheUKCGCalsoexpoundstheimportanceofboarddiversity.Diversityallowsvarying
perspectivesthatleadstobetterdiscussions.Itallowsvaryingstakeholderintereststobe
represented(Kang,H,ChengM&GraySJ,2007).Tocomplywiththecode,boardsareadvised
to
1. Becomposedofenoughindependentdirectorstofacilitateunbiaseddecisionmaking
untaintedbyundisclosedconflictsofinterest.Theuseofenoughisvagueandopento
interpretation.GHLdefinesenoughasatleast30%oftheboard(GHLCorporate
13|P a g e

governancereport2013).Oftheelevendirectors,fourareindependent(36%)satisfying
therequirement.IncontrasttothistheUKCGCrequireshalftheboardoflarge
companiestobenonexecutive,independentdirectors.
2. Balanceitsindependenceagainstnecessaryskills,knowledge,experience,perspectives
andgender.Table2demonstratesthatthereappearstobeabalanceoftherequired
skillsetandexpertiseontheboard.However,thereisonlyonefemaledirector.Itcould
bearguedthatGHLdoesnotsatisfytherequirementforgenderdiversityexcepthe
TTCGCdoesnotofferabenchmarkagainstwhichgenderdiversitycanbemeasured.
3. Ensurethechairpersonisanonexecutivedirectorandpreferablyanindependent
director(theUKCGCmandatesthatthechairmanbeindependent).Wherethe
chairpersonoftheboardisnotanindependentnonexecutivedirector,theboard
shouldappointaleadindependentdirector.Thecurrentchairmanisnotan
independentdirector,basedonthedefinitionofindependenceadoptedbyGHL.
Compliancewiththerequirementisachievedbytheappointmentofthedeputy
chairmanastheleadindependentdirector.
4. Establish,ataminimum,threesupportingcommitteescomprisedmainlyof
independentdirectors.Thesecommitteesaretheaudit,nominationandremuneration
committee.GHLhasestablishedtheAuditcommitteeasrequiredbytheTTCGC.They
havecombinedtheRemunerationandNominationcommitteesintoone.This
committeeisnotchairedbyanindependentdirectorasisrequiredbytheTTCGC.
However,thecodedoesallowfortheboardchairmantoheadthesecommitteesso
technically,GHLisnotinbreachofthecode.As75%ofthecommitteecomprises
independentdirectors,GHLasksthestakeholderstoacceptthatthiscompositionwould
resultinthecommitteesdeliberationsbeingindependent.Notablyhowever,the
chairmanoftheboardandofthispowerfulcommitteeisthe4thlargestshareholder
(6.29%ofshares)andhasamaterialinterestinthelargestshareholderofthecompany
(TeneticLimited15.46%ofshares)(GHL2014AnnualReport)

14|P a g e

Director

Independent

Executive

Audit

Mr.ArthurLokJack;Chairman(CM)
Mr.RaviTewari(CEO)
Mr.DouglasCamacho
Mr.RichardEspinet
Mr.MaximRochester
Mrs.MarianneLoner
Mr.ImtiazAhamad
Mr.PeterGanteaume(DeputyCM)
Mr.PhilipHamelSmith
Mr.AntonyLancaster
Mr.SelbyWilson

NO
NO
NO
NO
NO
NO
NO
YES
YES
YES
YES

NO
YES
YES
YES
NO
NO
NO
NO
NO
NO
NO

x
x

CM

COMMITTEES
Remuneration Corporate
&Nomination Governance
CM
x

x
x
x
CM
x
x

Risk&
Compliance
x

x
x
CM

Table2AnalysisofGHLBoardCommittees

Director
Mr.ArthurLokJack(CM)
Mr.RaviTewari(CEO)
Mr.DouglasCamacho
Mr.RichardEspinet
Mr.MaximRochester
Mrs.MarianneLoner
Mr.ImtiazAhamad
Mr.PeterGanteaume(Dep.CM)
Mr.PhilipHamelSmith
Mr.AntonyLancaster
Mr.SelbyWilson

AreaofExpertise/KeySkillset
Entrepreneurship
HealthandPensions
Insurance
Insurance
Accounting
Finance&Banking
BusinessManagement
Finance,AccountingandAuditing
Law
Insurance
Finance&Accounting

BoardAppointment
Directorsince1997,Chairmanin2004
Directorsince2014
Directorsince1998
Directorsince2014
Directorsince2014
Directorsince2014
Directorsince2003
WasapreviousCEOofGHL(1999)
Directorsince1997
Directorsince2003
Directorsince1997

Table3AnalysisofGHLBoardofDirectors

Theimportanceofnonexecutivedirectorsbeingindependentisathemethatresonates
throughoutthegovernancecodes.Consequentlythecodesoffersadefinitionofindependence
thataddressesthepossibletiesthatthedirectormayhavehadorhavewiththecompany.They
explore

Prioremployment

Priorboardmembership

Familytiestokeypersonnel

Ownershipofsharesormaterialinterestinthecompany

Theessenceofwhichistoensurethatthedecisionmakingprocessisfreefromconflictof
interest.
15|P a g e

The Governance Process

Inthewakeofseveralglobalscandals,thepublicexpectscorporategovernancetopreventthe
reoccurrenceofsuchscandals.SirAdrianCadburyoffersthatthecorporategovernance
frameworkistheretoencouragetheefficientuseofresourcesandequallytorequire
accountabilityforthestewardshipofthoseresources(SirAdrianCadbury,Corporate
GovernanceForum).Itishopedthatthestructurewouldensurethatcorporationsaremade
responsivetotherightsandwishesofstakeholders(DembandNeubauer,1992).

Todothisthis,theCadburyreport(1992)suggestthefollowingbedone
1. Increaseduseofindependentornonexecutivedirectors.Asnotedabove,ofGHLs
elevendirectors,eightarenonexecutive.Oftheseeight,fourareindependent.
2. Thecreationofthreekeycommittees.FulfilledbyGHLasnotedabove.
3. SeparationofthechairmanandCEOrole.ThechairmanoftheGHLboardisnotthe
ChiefExecutiveOfficer(CEO)ofthegroup.Note,thisisalsorecommendedbyboththe
UKCGCandTTCGC.
4. Adherencetoadetailedcodeofconduct.GHLhasadefinedvaluestatementpublished
ontheirwebsitethatspeakstothecodeofconducttheyfollow.Intheory,thisvalue
statementsatisfiestherequirement.Thespiritofthecodehowever,wouldrequirethe
directorstolivethevaluesdaytodaybeforeboastingofcompliance.

Therecommendations,listedabove,areexpectedtoguidetheboardintheexecutionoftheir
keyroleswhichcomprisebutarenotlimitedto

Strategyformulation

Maintainingaccountability

Policymaking

Supervisionofexecutiveactivities

AccordingtotheTTCGC,boardscanfacilitatethisaccountabilityby

16|P a g e

1. Definingaprocessbywhichtheopinionandviewofstakeholderscouldbesolicited.
GHLhasputaproxysysteminplaceforinclusionoftheshareholdersinthevoting
process.Theproxyformisverystructuredandtheoneviewedduringmyresearchdoes
notfacilitatesolicitationofshareholdersviewsoutsideoftheissuebeingvotedon.
Nevertheless,thefactthatshareholdersareinvitedtoattendtheannualmeeting
showsthataforumisavailableforshareholderstointerfacedirectlywiththeboard
2. Developingaprocedureforperiodicevaluationofboardmembersindividualand
collectiveperformance.GHLhascreatedaCorporateGovernancecommitteewhich
wieldstheresponsibility,amongothers,ofdevelopingandimplementingprocesses
toassessboardandcommitteeeffectivenessThecharterofthecommitteewaslast
reviewedandapprovedinMarch2013.Thecharterdoesnotspeaktomandatory
reportingofboardevaluations.Furthermore,betweenMarch2013andDecember2014,
thecommitteemetonly6times(Seetable4below).Ithasfailedtoagreeonaprocess
forevaluatingtheperformanceofthedirectorsandtheboardasawhole.
3. Generate,ataminimum,annualreportsforstakeholderreview.GHLs2014annual
reportreferencedinthedatacapturesectionaboveisproofthatthisrequirementis
beingfulfilled.
4. Developandenforcepolicyre:materialdisclosureandexpressionofconflictofinterest.
GHLs2013corporategovernancereportreferencesaconflictofinterestpolicy.The
compliancewiththepolicyismonitoredbythecorporategovernancecommittee.No
conflictsofinterestarenotedinGHLs2014annualreport.
Independent
Meetingsin
Meetingsin
Chairman?
2013
2014
1
AuditCommittee
Yes
5
7
2
Remuneration&NominationCommittee
No
7
3
3
CorporateGovernanceCommittee
Yes
4
2
4
Risk&ComplianceCommittee
Yes
4
4
5
EnterpriseInvestmentCommittee
No
4
Notreported
Table4Analysisofboardcommitteeswithrespecttotheirchairmanandthenumberoftimethey
convenedaformalmeeting
#

Committee

17|P a g e

Recommendations
Itisrecommendedthatthefollowingbedone
1. Foremostanindependentdirectorshouldbeappointedtoleadtheremunerationand
nominationcommittee.ThoughtheTTCGCmakesnoattemptatdefiningwhatthe
chairmanoftheboardcommitteesshouldlooklike(exceptfortheAuditcommittee),
theCadburyreportandUKCGC,afterwhichtheTTCGCispatterned,recommendsthat
thechairmanofthesecommitteesbeindependentdirectors.GHLfailstohonorthe
spiritofthecodeandinsteadexploitsaloopholebyassigningitsboardchairman(whois
notindependent)toheadthiscommittee.
2. TheTTCGCandeventhecharterofGHLscorporategovernancecommitteespeakto
periodicevaluationoftheindividualdirectorsandboard,inclusiveofthechairman.The
UKCGCstatesTheboardshouldundertakeaformalandrigorousannualevaluationof
itsownperformanceandthatofitscommitteesandindividualdirectorsThis
requirementisnotbeingcompliedwithandnoexplanationhasbeengiven.Itis
recommendedthattheperiodicevaluationcommencesbeforetheendofthefinancial
year.Tomeasuretheeffectivenessofitsprocessesandpolicies,theGHLboardmust
definemeasurablegoalsandKPIsandperformperiodicassessmentsagainstthosegoals
andKPIstoascertainsuccess.ThoughitcouldbearguedthatGHLspositivefinancial
reportconfirmsgoodperformancebytheboard,thisisinsufficient.Evaluationsarea
coreprincipleoftheTTCGC&UKCGCandshouldbecompliedwith.Itisexpectedthat
theoutcomeoftheseevaluationsalsobereportedtothestakeholdersinanannual
report
3. Thereisminimalreportingoncorporategovernanceissueseventhoughasectioninthe
annualreportisdedicatedtoit.Instead,thereportonlycapturesthetheoryof
corporategovernance.Theactualreportingmustbeimprovedto

Listallconflictofinterestedfortheshareholderstoperuse

Demonstratethataninductionwasdoneforthenewlyappointedboardmembers

Speaktosuccessionplanningandhowitiscurrentlyprogressing

UpdatetheshareholdersonGHLscompliancewiththeTTCGC
18|P a g e

Conclusion
GHLhavemadeaconcertedefforttoensurecompliancewiththeTTCGCandtheinstitutional
logicofthedaythatfocusesonshareholdersinterest.However,justlikeinstitutionallogic
whichprovidesguidingprinciplesbutnodetailedtemplates,thegovernancecodeleavesitself
opentointerpretationandfacilitatesrangingvariationsinthewayitisimplemented.Assuch,
shareholdersmustbevigilantindetectingwhenboardsrespondtolegalrequirementsby
developingstructures,processesandpoliciesthatdemonstratecompliancebutmissesthe
spiritofthecode.(Joseph,J,Ocasio,W&McDonnell,MH,2014)

GHLhasbeengreatin

EstablishingaboardstructurethatiscomplianttotheTTCGCandtheUKCGC

Establishingtherequiredauditcommittee

EnsuringtheannualreportingtostakeholdersandtheuseofProxyvotingtofacilitate
shareholderinvolvement

However,thefollowingcouldbeimproved

Thecombinedremunerationandnominationcommitteeischairedbyadirectorwho
doesnotmeettheindependencecriteria.Thismustberectified

Notenoughevidenceisprovidedtotheshareholderstodemonstratethataconcerted
efforthasbeenmadebythecorporategovernancecommitteetodevelopand
implementprocessestoevaluatetheperformanceofthedirectorsandtheboardasa
whole

Reportingoncorporategovernanceissuesneedtomovefromsimplyidentifyingthe
theorywithwhichGHLagrees,toactuallyprovidingprogressupdatesonhowGHLis
complyingwiththetheory

Respectfullysubmitted
JasonGraham
LeadConsultantJGConsultantsLimited

19|P a g e

Appendix1Unitaryvs.TwoTierboardstructure

OneBOARD
(MainlyNonExecutiveDirectors)

SUPERVISORYBOARD
(MainlyNonExecutiveDirectors)

BOARD

MANGEMENTBOARD
(MainlyExecutiveDirectors)

COMAPNY

UNITARYBOARDSTRUCTURE

COMAPNY

TWOTIERBOARDSTRUCTURE

Figure2Diagrammaticrepresentationofaunitaryandtwotierboardstructure(Tricker,B,2012)

20|P a g e

Appendix2Organizational Structure

Copiedfrom:
http://trinidad.myguardiangroup.com/guardianholdingslimited/organisationstructure/

21|P a g e

References

A.M.BestCompanyIncorporated,GuidetoBestsDebtandIssuercreditrating,2014

CaribbeanCorporateGovernanceInstitute,TrinidadandTobagoChamberofIndustryand
Commerce,TheTrinidadandTobagoStockExchangeLimited,Trinidad&Tobagocorporate
governancecode,2013

DembandNeubauer,1992

FinancialReportingCouncil,TheUKcorporategovernancecode,2014

GuardianGroup,CorporateGovernancereport,2013

GuardianGroup,Annualreport,2014

GuardianGroupwebsite,www.myguardiangroup.com
Viewed14thJune,2015

Joseph,J,Ocasio,W&McDonnell,MH2014,Thestructuralelaborationofboard
independence:executivepower,institutionallogics,andtheadoptionoftheCEOonlyboard
structuresinUScorporategovernance,AcademyofManagementJournal,vol.57,no.6,pp.
18341858.

Kang,H,ChengM&Gray,SJ2007,corporategovernanceandboardcomposition:diversityand
independenceofAustralianboards,CorporateGovernance:AnInternationalReview,vol.15,
no.2,pp.194207.

Martins,T,CorporateGovernance,InvestmentAnalysis&CreditRatings
http://www.caricris.com/index.php?option=com_commentary&view=articlecommentary&id=1
3&Itemid=41
Viewed14thJune,2015

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Organizationforeconomiccooperationanddevelopment(OECD),PrinciplesofCorporate
Governance,2004).

SenateandHouseofRepresentativesoftheUnitedStatesofAmericainCongressassembled,
TheSarbanesOxleyActof2002,2002

SirAdrianCadbury,theFinancialAspectsofCorporateGovernance,1992

Tricker,B,CorporateGovernancePrinciples,PoliciesandPractices,2ndEdition,2012

Walker,S,CorporateGovernance:ItseffectonSharePrice,2013

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List of Figures
1. Figure1Possibleevolutionofboardcomposition(InfluencedbyWilliamPounds
lectureoncorporategovernance.ViewedonYOUTUBEhttps://youtu.be/PC_acEzfL9Q)
2. Figure2Diagrammaticrepresentationofaunitaryandtwotierboardstructure
(Tricker,B,2012)

List of Tables
1. Table1Comparisonofboardcomposition
2. Table2AnalysisofGHLBoardCommittees
3. Table3AnalysisofGHLBoardofDirectors
4. Table4Analysisofboardcommitteeswithrespecttotheirchairmanandthenumber
oftimetheyconvenedaformalmeeting

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