A recent corporate governance survey sampling 41 Jamaican Public and Private Sector Directors has uncovered myriad areas of concern requiring urgent attention of boards. The study conducted by PricewaterhouseCoopers (PwC) Jamaica explored adaptability, resilience, and governance structures in several businesses coming out of the pandemic. Among the findings relating to Jamaica, are that directors want more board refreshment. Forty- nine per cent of directors say at least one fellow board member should be replaced, while 24 per cent would replace two or more fellow board members.
Additionally, Directors admit board diversity is still a challenge. Ninety -eight per cent of directors agree that board diversity results in unique perspectives and improves the board and the company’s performance. However, the ‘2022 PWC Corporate Governance Study found that despite this, some 34 per cent of directors reported their boards took no action on board diversity over the past two years.
Thirty-nine per cent of directors indicated that when the board recruits its next director the biggest priority is industry expertise. The Jamaican Directors from both public and private sectors cited ‘long serving directors’ reluctance to retire’, and board leadership not invested in board diversity as top factors impeding board diversity efforts followed by an over-reliance on director networks to source candidates.
When it comes to board meetings mostly virtual since the pandemic, the study found that the jury is out. 46 per cent of the directors felt that virtual meetings and committee meetings positively impacted meeting effectiveness. Thirty-two per cent felt the same about meeting efficiency, however, 41 per cent reported a negative impact on director engagement and 29 per cent onboard culture.
Fifty-six per cent of directors say there’s room for improvement for board assessments done in the last year. However, 29 per cent say these were too much of a ‘check the box exercise’.
Meantime, 61 per cent of directors agree executive management and compensation need a second look, adding performance targets are too easy to achieve. Sixty- six per cent don’t believe the incentive plans promote long-term shareholder value.
Going forward, the study notes that environment, social and governance issues warrant a bigger seat at the table, as it forms the basis on which many foreign investors decide where to invest. It’s also insisting the time has come to tackle board diversity, double down on-board assessments and more time should be spent engaging shareholders and stakeholders.
