Corporate governance as a mechanism for the deterrence of economic crimes in the Commonwealth Caribbean

Abstract

Purpose

The purpose of this paper is to highlight the need for good corporate governance (CG) as one of the mechanisms to combat corporate misconduct and, by extension, to encourage economic growth and development, with special emphasis on Jamaica, which not only has seen the greatest financial sector meltdown in the region, but has also seen the greatest response to the need for CG initiatives.

Design/methodology/approach

For the past 20 years, CG has been at the forefront of discussions, legislation and moral suasion regarding corporate transparency and accountability, especially in the wake of spectacular scandals from the Maxwell debacle in the United Kingdom (1992), to Enron in the USA (2001), to the world economic crisis (2008). Codes have been adopted and legislation drafted to meet the concerns regarding corporate abuse, which have not only had an impact on the corporations and their shareholders, but also on a wider group of stakeholders, which includes, in some cases, the countries in which they operate. Not only have these scandals rocked the developed world, but corporate misconduct has taken an especially debilitating toll on developing economies, such as those found in the Commonwealth Caribbean. The cost of corporate misconduct in the region has included government bailouts, loss of jobs and loss of confidence in the markets. These, in turn, have had some negative impact on the development of many of the countries, which includes slow, stagnant or negative economic growth.

Findings

The attention to CG in the Commonwealth Caribbean has grown tremendously in the past 10 years by the introduction of codes and legislation with a focus on transparency and accountability in accordance with international standards. The challenge now appears to be the need to link these initiatives with the anti-corruption project. This may be best achieved through the acknowledgment of the need for the private sector to play a greater role in the prevention of corruption through CG initiatives. Put another way, there may be need for an increased focus on the demand side of bribery and corruption rather than simply on the supply side. Finally, the development of emerging economies relies heavily on the stemming of corruption and mismanagement both in the public sector and the private sector.

Originality/value

The original value of this paper is the development of CG principles in the region.

Citation

Ffolkes-Goldson, S.C. (2015), "Corporate governance as a mechanism for the deterrence of economic crimes in the Commonwealth Caribbean", Journal of Financial Crime, Vol. 22 No. 3, pp. 347-353. https://doi.org/10.1108/JFC-03-2014-0015