Board members and CEOs learn about corporate governance |31 July 2018

The term corporate governance is nowadays commonly used and it refers to the way in which institutions are governed and to what purpose, secretary of state in the Ministry of Finance, Trade, Investment and Economic Planning Patrick Payet has said.

Mr Payet made the statement during his keynote address to officially launch a two-day seminar under the name Masterclass on the Boardroom, Governance and Director Duties, gathering some 40 high-level officials, mostly from various boards of public enterprises and other bodies, chief executives, as well as members from the private sector.

The seminar which is exploring the importance of the role of the board in a system of best-practice governance and how it can effectively transform the organisation’s performance, is being jointly hosted by the Public Enterprise Monitoring Commission (PEMC) and the Guy Morel Institute.

Present at the official launch yesterday were PEMC board chairperson William Zarine and the executive director of the Guy Morel Institute Shella Mohideen.

The work session is being led by Seamus Gillen, founder and director of Value Alpha, an advisory firm focused on the links between governance and performance.

Mr Gillen has a BA (Hons) in Business Studies and French, a Masters in Business Administration from Henley Management College, and is a Fellow of the Institute of Chartered Secretaries and Administrators.

Other than congratulating the PEMC and the Guy Morel Institute for bringing the training to Seychelles, Mr Payet urged the delegates to get actively involved in the sessions, gaining the maximum out of it, so that their respective boards operate in a more effective way.

He noted that the responsibilities for good governance go beyond management of companies.

Mr Payet explained that the board of directors is responsible to ensure good corporate governance and when boards do not discharge their functions properly, the result is bad corporate governance and the aspects of the latter include failure of the board to perform its duties properly, misleading financial reporting, poor relationship between the board and the owner and shareholders, ineffective systems of risk management and exposure to fraud due to lack of internal control as well as unethical business practices.

He also added that even if powers to manage the affairs of a company are given to the boards of directors who then delegate them to the chief executives, it is however important that boards retain some of powers and responsibilities.

Mr Payet added that certain matters should be reserved for board decision-making rather than being delegated to the management of institutions.

“The board of directors should also be responsible for monitoring the performance of the management team,” he further noted.

Among the various topics being covered during the two-day seminar are boards as a central feature of best practice governance  (the purpose of a board, the purpose of an organisation, the business case for corporate governance, the board’s role in delivering business benefit), the duties and responsibilities of directors (basic principles of company law, regulation and guidance, directors’ duties in common law – fiduciary duty, and duty of skill and care, categories of director – who is, and is not, a director, common director challenges – bribery, conflicts of interest) and the board’s principal role of making high-quality decisions (what high-quality decision-making looks like, the three main forms of decision-making delegation, the role of committees, delegating to the management team, subsidiaries and Special Purpose Vehicles, board support structures.