Every business should practice Corporate Governance as this ensures your company is being run efficiently. But does Jamaica have a corporate governance code and if yes, what should your business do to ensure you’re not in breach of this code? Joining me now to discuss Jamaica’s 2021 Corporate Governance Code, we have Chair of the PSOJ Corporate Governance Committee, Camille Facey.
Corporate governance plays an essential role in a company’s overall success.
Corporate governance refers to the system of rules, practices and processes which directs how a company is controlled. It also sets out who has power and accountability, and who makes decisions within the company.
Chair of the Private Sector Organisation of Jamaica’s (PSOJ) Corporate Governance Committee, Camille Facey, said that corporate governance is not only for big well established companies but also for small and medium-sized enterprises.
Speaking on MoneyMoves with Kalilah Reynolds, Facey said that the most recent version of the Corporate Governance Code, which came into effect in March 2022, focuses on all types of businesses including small businesses, family businesses and government entities.
She said that it is important for small businesses to establish corporate governance earlier on to prevent conflict and confusion later on.
“That SME is tomorrow going to be a major company in this country. You just have to look at the GraceKennedy’s that grew from small family businesses into now conglomerates,” she said.
She noted that the corporate governance code provides principles to ensure that businesses are sustainable in the long term.
“The more successful business we have the better off we are as a country,” she added.
Facey noted that many Jamaican small business owners tend to focus more on the tangible side of the business first before the guidance side.
“People are often focused on manufacturing the particular good or delivering the service but in terms of what systems and processes should be in place to ensure that the business runs well, they don’t focus so much on that, especially in small businesses,” she said.
She said that Jamaica’s corporate governance code allows business owners to extract the principles that suit their business at whatever stage it is.
She said that one major part of corporate governance which every company should have is a board.
According to Facey, a board not only provides oversight but also guidance on market trends among other things and also holds the business owner accountable to their vision.
“Your board is going to come in and say ‘what are your business’s strategic objectives, and they’re going to help you to outline that,” she said.
She also noted that another important feature of the corporate governance code for small businesses is its guidance on finances.
She said that having financial statements in order is essential in small businesses as investors will require the information to make sure that the company is running effectively.
Having the business’s finances in order is also crucial for companies that will seek financial assistance from banks or other financial institutions.
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