Governance in the Caribbean is a complex and multifaceted issue. With over 30 countries, territories and dependencies each with their own governance structure.
Good governance is vital for economic stability, effective disaster relief and attracting investment. While some countries in the Caribbean have made significant progress in terms of governance, others have areas to improve.
To keep ahead of the curve, here are 3 governance trends to keep on top of in the Caribbean.
1. Transparency and accountability
Transparent and accountable governance is key to building trust with stakeholders. A transparent governance system that openly shares its plans, actions and outcomes fosters trust and provides understanding around how decisions are made.
Boards can enhance transparency by:
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- clearly documenting and communicating the rationale behind their decisions
- disclosing relevant information to stakeholders
- implementing robust governance frameworks that promote accountability and ethical conduct
2. Adoption of ESG practices
ESG is moving up the strategic agenda. Although islands in the Caribbean are not large contributors to global greenhouse gas emissions, they are disproportionately affected by their impact with sea levels rising, and more extreme weather events such as hurricanes.
PWC’s Caribbean Corporate Governance Survey found that more than 50% of respondents now consider ESG within their strategy and risk management to some extent. And, 10% strongly agree that ESG is regularly on the boardroom agenda or that they have a defined process for ESG oversight. Read the full report here: https://pwc.to/44X8TQQ
Although there are some people more skeptical, or who are just focusing on keeping things afloat, many board members are embracing these environmental, social and governance priorities. Embracing ESG practices not only enhance organisational reputation but also mitigates risk, drives innovation and opens up new market opportunities.
Boards can improve adoption of ESG practices by:
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- Integrating ESG goals into the company’s overall strategic plan
- Establish clear, measurable ESG goals and objectives and develop KPIs to track progress on initiatives
- Reduce environmental impact by adopting board management software like Stellar, to reduce paper waste. Learn more here: www.stellarlibrary.com
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3. Improving diversity
Diverse boards are better equipped to navigate the complexities of today’s business environment, offering a wide range of perspectives and solutions. Diverse and inclusive boards lead to better decision-making, improved corporate governance and enhanced company performance. They also help companies to further understand and serve diverse markets.
A diverse board best reflects the range of people in the Caribbean community including different ethnicities, cultures, ages, genders and backgrounds. The board plays a critical role and setting the tone at the top is crucial.
PWC’s Caribbean Corporate Governance Survey found that:
- 90% believe that diversity brings unique insights to the boardroom
- 70% strongly agree that diversity brings unique insights
- However, only a quarter report that they’ve taken action to boost boardroom diversity in the last two years
- And a third has engaged in discussions but got no further
Despite progress and understanding of the benefits of diverse boards, many still lack representation of women, younger individuals and ethnic minorities.
To improve board diversity, here are 3 practical steps:
- Encourage mentorship programs and provide leadership development opportunities to develop a pipeline of diverse leaders.
- Being open and honest about decision-making processes and actively seeking out and valuing diverse perspectives and opinions. As well as investing in board education around unconscious biases.
- Establishing defined diversity and inclusion goals that promote inclusion, diversity and equity.
Composing diverse boards is a global issue, and now more than ever diversity on corporate boards is a business imperative.
As the Caribbean continues to grow and evolve, strong corporate governance will be a key driver of sustainable success. By enhancing transparency and accountability, focusing on ESG practices and taking steps to improve board diversity, directors can ensure their organisations’ are well-positioned to meet the challenges and opportunities of the future.
At Stellar, we are committed to supporting boards across the Caribbean in their governance journey, providing board and document management software to stay ahead of the curve. If you have any questions, or want to learn more about Stellar get in touch here: www.stellarlibrary.com/contact-us/