Groupthink and grey Directors: A case for good governance

If groupthink and grey Directors are pervasive, then sweeping legislative changes must come to the National Insurance Board of Trinidad and Tobago (NIB), which will for once put an end to the board’s many tentacled reach beyond Cipriani Boulevard. At a minimum, the country and its Parliament must consider three things. First, whether there remains any value in having labour and employers occupy six seats in NIB’s boardroom and if so whether there is value in placing some restraints which will overcome many handed directorships; second, whether it is appropriate to have Members of Parliament sitting on the Boards of State corporations and Statutory bodies and third, whether it is appropriate to have persons, including Permanent Secretaries, their Deputies and State CEOs sitting on more than a handful of boards.

It’s the sort of thing which makes for stony silence: it’s also the kind of silence which seems atypical of firebrand labour and premier business association leaders, so heavily wedded to their respective bread and butter of workers’ rights and good governance.

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Investors:Where there's smoke, there's fire. Click link to read my column.

If most of the financial meltdown of 2008 was driven by the collapse of complexity in global finance, Bernie Madoff was the absolute exception. There were no credit default swaps, complex options or asset backed commercial paper in Bernie’s investment arsenal. There was no fund either. With at least US$40 billion, Madoff’s “fund” somehow never managed to be anything more than a Chase Manhattan bank account. 

From a Caribbean point of view there is one common irony in the stories of Bernie Madoff, Allen Stanford and Lawrence Duprey’s Clico’s Much of the intrigue around this threesome has been built around their self-styled success. Ultimately, the thing which attracted the most scrutiny was neither their characters nor evident success; it’s their core business which over the years, seemed to attract persistent questions. All three had the penchant for the jet setting lifestyles of successful industrialists but the hard facts surrounding their core business suggested that danger was coming. 

The lesson to be learnt is that if investors pay attention to the smoke they may be prepared for the fire. 

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Trinidad: Time for action on money laundering

Reading Minister Karen Nunez-Tesheira's contribution to the debate on the Act to establish the Financial Intelligence Unit led me back to the Strategic Services Agency (SSA), set up in 1995 as part of the State's global money laundering commitments. The SSA was established to "act as an office for centralising information that could facilitate the detection and prevention of illicit traffic in narcotic drugs." It was also set up to "assist in identifying sophisticated drug-related criminal activity and those who engage in it and help the law enforcement effort by identifying links between individuals and organisations involved in the drug trade".

Those were the early days of the Caribbean Financial Action Task Force and the global efforts to dismantle the world of secret banking which facilitated money laundering. The Minister did not mention all the legislative and administrative arrangements already in place for dealing with the money which fuels the killing on the streets.

The Minister also did not mention that the legislation is intended to complete the country's long outstanding international commitments to dealing with money laundering. Instead the Minister behaves as though this legislation is newly discovered ground and will be, in the way politicians usually assume, the magic wand to wave crime away.

The problem, Minister, has not been the lack of a framework but the lack of the will to clean up the town. Perhaps she should also read the most recent publication on the role of sport, and soccer in particular, in money laundering and consider including pro and semi-pro clubs in the scope of the legislation.

Let's hope the horses have not bolted.

The Gangs of Port of Spain (Click here to read)

In 2008, the world’s most dangerous jobs ranged from fishers, pilots and loggers to trash collectors, roofers and truckers. Obviously, the researchers and data collectors did not consider the job of “community leader,” an occupation which in Trinidad and Tobago has a fatality rate above 90 percent. Exactly three years ago local media reported that the country’s Prime Minister met “community leaders” at Crowne Plaza hotel in Port-of-Spain, ostensibly to “broker a peace pact among rival gang leaders of the Morvant/Laventille and Port-of-Spain areas.”

Of the 20 community leaders meeting in 2006, 18 or 19 have since been murdered.

Trinidad and Tobago, at current rates, will end 2009, second to Jamaica in the region, in homicide rates. Jamaica seems headed to finish 2009 just under its 2008 toll of 1660 or 59 murders per 100,000 citizens. Both Caribbean countries will keep company with regional counterparts Honduras, Venezuela, Guatemala and El Salvador in the world’s top ten murderous countries per capita. Jamaica, as usual, should end up with gold.

Click the above link to read my Newsday column.