Introduction

The Commonwealth Caribbean as a whole has concentrated on an increased application of corporate governance principles since the 1980s and 1990s with the introduction of a modern corporate legislative regime emphasizing accountability, transparency and increased shareholder participation.

The financial sector collapse of the late 1990s in Jamaica, which involved the failure of a number of indigenous banks and insurance companies, heightened the debate there and precipitated a slew of legislation to combat one of the perceived causes, which had been identified as poor corporate governance.^[221] As a result, although Jamaica is one of the last Commonwealth Caribbean countries to adopt the more modern corporate law model, it has led the way in enacting stringent financial legislation and the introduction of the Financial Services Commission, which is a relatively new oversight body that supervises and regulates the securities industry, the insurance industry and the private pensions industry. Jamaica’s central bank, the Bank of Jamaica, regulates the banks, and the Jamaica Stock Exchange regulates those companies which trade on the local stock market. Other Commonwealth Caribbean territories have increased their oversight of the financial sector through their central banks^[222] and securities exchange commissions, which, between them, regulate financial institutions, insurance companies and the securities market.^[223] Jamaica has also led the way in corporate governance by the introduction of the Private Sector Organization of Jamaica draft Corporate Governance Code (�PSOJ Draft Code’) which is similar to the United Kingdom Combined Code on Corporate Governance 2003.

Generally speaking, the Enron debacle of 2001 in the United States, pressures from the international community and general winds of globalization, have forced the Commonwealth Caribbean nations to stand up and take note and to put in place preventative legislative measures and codes in accordance with OECD and World Bank principles. The greatest challenge to the Caribbean Commonwealth will be the current domino effect of the collapse of the United States financial markets and economy. Initial indications are that the ball was dropped in the oversight of corporate governance of the financial sectors in the United States and worldwide. A tightening of the financial legislative framework in the United States suggests that, perhaps, the models adopted in the form of �Sarbanes-Oxley’ have not been as effective as originally thought.

One of the main aims of the proposed Caribbean company law harmonization of the 1970s and 1980s was to introduce a corporate law regime to which North American investment would be more easily attracted. At the same time, the region expanded its offshore banking facilities to the same end. In the enthusiasm to adopt these laws, it is not clear whether there was due consideration to the corporate governance implications. Was any corporate governance philosophy entertained and, if so, did they assume that the corporate culture of the Commonwealth Caribbean is homogeneous? It is not. Since the enactment of �new’ Canadian companies’ legislation in the late 1970s which the Caribbean modelled, Canada has faced a number of challenges in the interpretation and application of some of its provisions on corporate governance.

This chapter, while highlighting the obvious developments in the area of corporate governance in the region at the private sector level, will also explore the challenges which the region faces in attempting to fit models from the developed markets into their emerging markets. It is clear that the models developed by the �First-World’ may not always be appropriate for smaller territories which are not considered to be truly �First-World,’ but which at the same time are also not truly �Third- World,’ based on their level of sophistication and economic maturity from a global perspective.^[224] Interestingly, the World Bank Data and Statistics as at July 2009 categorized Jamaica, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines as Upper Middle-Income Economies and Antigua and Barbuda, The Bahamas and Barbados as High Income Economies.^[225]

2.