Jamaica's Response to Public Bodies' Corporate Governance Challenges: From Innovation to Implementation

Dr Vindel L. Kerr, Assistant Professor, Department of Management Studies, The UWI, St. Augustine Campus, Trinidad and Tobago, W.IDr Vindel L. Kerr, Assistant Professor, Department of Management Studies, The UWI, St. Augustine Campus, Trinidad and Tobago, W.I is an entrepreneur, scholar, expert practitioner and public policy advisor in corporate governance. Since 2003, Dr Kerr has served more than 300 clients in 23 Countries through GovStrat Limited - an executive learning and management consulting firm he founded. He joined The University of the West Indies (UWI), Trinidad and Tobago, in January 2014 where he is serving concurrently as an Assistant Professor of Business Ethics. Dr Kerr has facilitated hundreds of learning interventions and trained in excess of 4,000 corporate directors, senior executives/civil servants and government ministers spanning the Caribbean, South America and Southern Africa. He is the sole consultant who developed the Corporate Governance Framework for Public Bodies of Jamaica and many other CG codes, board charters, evaluation frameworks and strategic plans. His seminal book, ‘Effective Corporate Governance’ was published in 2005. Dr Kerr earned undergraduate and graduate degrees in agriculture, business management, corporate governance and public policy from the University of Manchester, UK; Rutgers University, USA; The UWI, Trinidad & Tobago, and College of Agriculture, Science, & Education, Jamaica, W.I


Jamaica, the focus of this paper, has experienced high-profile corporate scandals due to mal-administration of public and private institutions.  The ‘Sunday Observer’ (October 17, 1999: pg. 1, 4-7) in its front page article entitled, ‘Busting the Piggy Bank,’ reported fat pay packets and disparities in public sector salaries. This revelation brought to attention the fact that many public sector bosses were in breach of established pay guidelines, and were paying themselves excessive salaries of millions of dollars at taxpayers’ expense. After a full-scale investigation, requested by the public and endorsed by the Government of Jamaica, into the operations of more than 80% of the approximately 200 Public Bodies (PBs)1, then Prime Minister P. J. Patterson reporting to Parliament on April 12, 1999 conceded that, “the Finance Ministry had lost control of the salaries in some of these state-owned companies.” (Ibid)  

During the 1990s, prominent world financial markets (South East Asia, Russia and Argentina) collapsed resulting in significant asset losses, financial institution closures, job losses and many once booming economies plunging into depression. Between 1993-1999 in Jamaica, several leading banks and other financial institutions either collapsed, were bailed-out, or taken over by new owners. Four of Jamaica’s largest and oldest insurance companies and at least fifteen merchant and investment banks and other financial institutions, which accounted for approximately 30% of depositors’ value in all financial institutions, experienced closures. (Bonnick, G., 1999)2  

The Jamaican public has received no defensible explanation about these crises, which occurred and directly affected both public and private companies. However, what remains evident is that the failures were due [in large measure] to poor administration and outright neglect of the duties of responsibility, care and loyalty to shareholders on the part of board Chairmen, Directors, CEOs and management (Hilton, 1999).3 The problem of poorly administered PBs has significant implications for stakeholders, and for the performance of the economy as a whole.  For example, when the financial system collapses, a “ripple effect” is triggered causing widespread failures of “satellite” businesses.  

PBs have been in the forefront of their respective countries’ development for many decades. They play an integral role through their contribution to the economy and the overall competitiveness of a country. In Jamaica, 191 active PBs collectively represent an important subset of the public sector. They are integral to the development and implementation of a number of key policy objectives. These bodies are held accountable regarding several statutory requirements.  However, they often come into question for breaches, including those of procurement guidelines and incidents of fraud or negligence on the part of their fiduciaries—chairmen, directors, corporate secretaries, and committee members. Operating in a dynamic and financially-charged environment, they are further challenged by the need to be fully compliant within the development and regulatory requirements of a transforming economy.  Those are: keeping finances in good order, being driven by efficiency, and motivated by a deep commitment to reducing poverty and strengthening the general economy.  

The leadership and management of PBs present a distinct experience from private enterprises given their unique environment and objectives.  They are unique in that the owners are the government (i.e. the public - the voters).  Private enterprises have a very clear profit motive and active shareholder participation in adjudicating and monitoring governance and leadership.  While such checks and balances among PBs are often well-defined, they are either developed on a piecemeal basis, deficient in content, or not efficiently and prudently enforced.  Public sector organisations sometimes find it hard to comply because they are insulated from the competition that fuels innovation in the private sector. They must therefore organise themselves in ways that stimulate performance from within.4 

In response to the preceding challenges, the Government of Jamaica (GOJ) has for the past several years been pursuing a comprehensive programme of public sector modernization and reform. The broad goal is to achieve greater efficiency, effectiveness and economy in resource utilisation and service delivery, and critically, to address perennial concerns of poor performance, management, financial irresponsibility of government and weak mechanisms of accountability monitoring. In response to these challenges, the GOJ has sought to clarify the governance framework within which PBs must operate by the establishment of a Corporate Governance Framework for Public Bodies (CG Framework).  The key objective of the CG Framework is to improve accountability, transparency and probity while achieving a more compliant, efficient and effective public service. In keeping with these crucial aims, the Cabinet of Jamaica has given approval for its adoption and the implementation of the recommendations of the CG Framework.  

The CG Framework is the first of its kind to be initiated by a national economy in the English-speaking Caribbean. It is indeed a novel innovation in its objectives of addressing specifically the needs of PBs, which are by far more comprehensive in scope and depth of coverage (key principles/elements and recommendations), methodological approach and mode of implementation.  Essentially, when completely implemented, it will have surpassed all other existing national codes (e.g., PSOJ5, TTNCGC6 and King III Report7, South Africa) in effecting needed CG reforms, and particularly in a developing island state such as Jamaica.  

This paper therefore explores the genesis and implementation of Jamaica’s innovativeness in improving corporate governance in PBs.  To achieve this end, the paper utilises local, regional and international social science literature on corporate governance (CG) for public bodies; an internet survey among local and international CG experts; focus group study among senior CG practitioners and policy makers; and hosted stakeholder consultation sessions and personal interviews among carefully selected CG informants. The remainder of this paper features a conceptual framework for CG, rationalises the distinct and innovative nature of the framework, its methodological approach, key findings, recommendations, implementation and promulgation, and conclusions.  


For the purposes of this paper, CG embodies processes and systems by which PBs are directed, managed and held to account. CG influences how objectives are set and achieved, how risk is monitored and assessed, and how performance is optimised.8 In essence, CG includes a combination of legal and voluntary practices that ensures the long-term survival of an organisation while meeting the needs of all stakeholders.   Improved corporate governance is important at this time and particularly for emerging economies like Jamaica for several reasons.  

First, the principal-agency problem is at the centre of what makes CG important.  This problem grows out of the separation of ownership and control and of corporate outsiders and insiders (Berle and Means, 1932).9  In the absence of the protection and checks-and-balances that good CG provides, asymmetry of information and difficulties of monitoring mean that capital providers who lack control over the corporation will find it risky and costly to protect themselves from the opportunistic behaviour of managers or controlling shareholders. 

Second, it is becoming increasingly clear that a healthy and competitive corporate sector is fundamental for sustained and shared growth - sustained in that it can withstand economic shocks, shared in that it delivers benefits to all of society.  According to Vision 2030, Jamaica

Good governance frameworks seek to be responsible for allowing rights and enforcing responsibilities for management at the appropriate levels; local, national, regional and global. Such governance frameworks enable the participation of all stakeholders in decision-making related to development and include mechanisms for ensuring transparency and accountability (Planning Institute of Jamaica, 2009).

Third, Oman (2001)10 argues that increasingly, firms, individual investors, funds, banks and other financial institutions are basing their decisions not only on a company’s outlook, but also on its reputation and its governance.  It is the growing need to attract and access financial resources, domestic and foreign, and to harness the power of the private sector for economic and social progress that has brought CG into prominence the world over. 

Fourth and final, sound CG is important not only to attract long-term “potent capital” but more so, to broaden and deepen local capital markets by attracting local investors, both individual and institutional.  Unlike international investors who can diversify their risks, Jamaican investors are often captive to the system and face greater risks, particularly in an environment that is opaque and does not protect the rights of minority shareholders (Kerr, V., 2005, pg. 182-193).11  


The word ‘distinct’ means different, separate, discrete and diverse.12 Innovation is “an idea, practice or object that is perceived as new by an individual or another unit for adoption.”   Innovation can be perceived as an engine for modernization that increases competitiveness of state-owned enterprises, large private companies, small and medium-size enterprises and even nongovernmental organisations (voluntary and not-for-profit), by making them more flexible and responsive to market needs. 

The evolution of a creative idea into a practical organisational change is usually classified as an innovative process. An ideal type of good innovative process can be characterized by the shared motivation and commitment of individuals, groups, and organisations to acquire new information and increase their sources of knowledge about a relevant problem in order to stabilize a tempestuous social system.13 This requires organisational actors to be pragmatic and open to practical methods that can transform a promising idea into sustainable beneficial change. However, this may not always be easily achieved.  Many promising reforms and change-seeking initiatives have failed to achieve any level of success.  Also, successful innovation can be self-defeated when grounded in a classic bureaucratic model such as government institutions.14  Many obstacles must be removed before a creative idea realises its full potential. Among these obstacles, scholars emphasize cultural differences and red tape as the most significant and powerful.15 

Organisational operatives tend to resist changes that contradict their cultural dispositions and more so in the public sector domain where tradition of past knowledge, experience, and conservative institutional solutions strongly influence leaders’ decisions.16 This resistance to innovation and change can be widespread.  In the context of states, governments and bureaucracies, Benjamin Franklin stated that: “to get the bad customs of a country changed and new ones, though better, introduced, it is necessary first to remove the prejudices of the people, enlighten their ignorance, and convince them that their interests will be promoted by the proposed changes; and this is not the work of a day.” 

Consistent with the preceding background, the CG Framework of Jamaica is both distinct and innovative for the following five reasons. 
  • First, its genesis: the motivation for the CG Framework for PBs of Jamaica has its grounding in the need for the Jamaican government to meet due diligence requirements for loans and grant funding from the Inter-American Development Bank (IDB) to finance its ambitious Public Sector Reform Agenda during 2000 and continuing for nearly two decades. Among the first three requirements of an exhaustive list was the condition to produce a corporate governance framework demonstrating the GOJ’s written commitment to a more competitive, efficient, effective, transparent and accountable public sector.  There was no existing framework, and many senior public officials were also very unfamiliar with the concept of a ‘CG code’ or ‘CG framework’ at that time. This IDB requirement came with its own set of disruptive innovations and put the GOJ on the offensive to be swift and incisive.  This can be described as the first of two levels of “pressured” innovation17 or external forces critical in driving the wedge through bureaucratic governmental orientations. There is no other established national CG framework or code that has been known to be so uniquely influenced by a multi-national lending/grant funding institution. Not surprising, several components of the CG Framework recommendations have been the subject of the GOJ periodic reporting to the International Monetary Fund (IMF) in recent years.18  
  • Second, is another form of “pressured” innovation inspired by a significant number of internal organisational actors (leaders, managers and technocrats) with day-to-day responsibility for a number of institutional activities.  These post-modernists are usually much more educated than the average age employee occupying similar positions of two decades ago. In addition to the new internal influencers of beneficial reform, are the significant majority of external informants of this study.  These external influencers have no propensity for the old bureaucratic, obstructionist, and change-resisting hurdles of government. The new-era directors, leaders, managers and influencers are proactive, busy, sharp, knowledgeable, tech-savvy, adaptable, risk-taking, and entrepreneurially-oriented who, after perceiving the benefits of necessary changes, want to see implementation and results at the speed of light. Therefore, pressured innovation is achieved due to both internal and external influencers who play significant roles in the successful implementation of the CG Framework. It is the author’s studied opinion that hardly any other existing similar CG framework had benefitted from the number, diversity and informed nature of these respondents.  
  • Third, the prevailing CG challenges while not unique to Jamaica, require carefully crafted research strategies and methodologies bearing in mind unique institutional and sectoral cultural realities. These cultural realities were given careful considerations in designing research approaches, selecting and interviewing respondents, administering research instruments, and sharing findings and consultations with different segments of informants. 
  • Fourth, at all stages of development, multiple stakeholder consultations were used to solicit and reinforce conformance with, fine-tuning, or rejection of recommendations. It is not surprising that even lawmakers themselves, who would later debate and discuss the recommendations, were themselves respondents, often giving interviews, participating in focus groups or attending town hall meetings. It should be noted that while the CG Framework is not legislation, it has received legislative backing from two separate political administrations before it was approved, with instructions issued to all PBs through the Ministry of Finance for its adoption by all PBs of Jamaica. 
  • Fifth and final, is the CG Framework Oversight and Implementation structure and operationalization arrangement. In order to ensure sustainability, permanency and continuous improvement at each process step, there is a project unit and an oversight body in place. A project manager who reports to a director of governance, and is responsible for day-to-day operations heads the project unit. This unit is placed under the leadership of the Public Enterprise Division of the Ministry of Finance and the Public Service (MFPS) and works collaboratively with the Public Sector Enterprise Division of MFPS. The operationalization and leadership of the CG Framework is further bolstered by an independent CG Framework Implementation & Oversight Committee with membership from various influential and governance-related institutions such as academia, the private sector, the University of the West Indies, public accountancy institutions and the MFPS, inter alia. This oversight body brings independent and objective judgment in advising, monitoring and adjudicating the various affairs related to this programme. In essence, it acts similarly to a board of directors.  The oversight committee meets as often as necessary to ensure speedy and effective decision making and reports to the Cabinet of Jamaica at least once annually on progress.  
Since the Cadbury Report (1992) and in the context of the Commonwealth, no other CG code-owning country has ever instituted a similar structural and operational arrangement for the successful implementation and sustainability of a CG framework. This structural and operational feature of the Jamaican CG Framework is most distinct and innovative and separates it apart from all other existing national CG codes and frameworks, internationally. The elements of continuous improvement (kaizen philosophy) and sustainability are the CG Framework’s most defining characteristics.  See section 6.   


To adequately assess challenges of PBs in Jamaica in an effort to recommend an appropriate model requires an intellectual framework (research strategy and methodology) that is built on a scientifically sound research protocol.  The techniques and approaches were therefore selected to ensure the participation and influence of a wide constituency of stakeholders, and to obtain information and results that could impact policy governance reform among PBs. Before specific methods and techniques for information gathering and data collection were undertaken, it was necessary to accurately interpret the expected deliverables that would eventually impact such a CG framework and to respond with the most appropriate methodological approach. 

In seeking clarity on an appropriate corporate governance framework for PBs, the Terms of Reference19 as issued by the GOJ identifies six key ‘good’ corporate governance drivers (CG drivers)”.20  These consist of: 
  1. clarification of the roles and responsibility of the board and its directors; 
  2. procedures for appointing board of directors;
  3. a competency framework for the selection of board members;
  4. a code of conduct for Board and its members;  
  5. a protocol to define relationships between management, its board, shareholders and other stakeholders, and
  6. review and recommendation of an effective monitoring arrangement for the operations of public bodies within their parent ministries.  
To ensure the CG framework achieves its objectives, eight additional “first cut”21 CG drivers were identified from a review of international best practice literature22 with relevance validated by the author’s expert knowledge of governance for state-owned enterprises. These additional CG drivers include: 
  1. board composition and performance;
  2. board orientation, training and continual development; 
  3. roles and responsibilities of key fiduciaries;
  4. independence and powers of board decision making;
  5. board information management and disclosure;
  6. role and independence of public body audit and internal controls;
  7. role of co-opted board members, invitees and ex-officio officers; and
  8. code of ethics for directors and officers. 
To further authenticate the importance of the preceding CG drivers among the stakeholder/respondent constituents, four additional streams of information gathering and data collection techniques (stakeholder consultations) were employed. These included: an internet survey among  (n=116) local and international public sector CG experts utilising the Likert Scale (See appendix 1), focus group sessions among senior corporate governance practitioners and policy makers; a series of town hall meetings involving various public and private sector actors and personal interviews among selected key public bodies CG informants. 

The results of the data and information gathering were used to inform the analysis and discussion of findings and proffering recommendations.  As best as possible, a combination of stratified random and purposive sampling was employed to ensure the inclusion of as many stakeholders as possible from across the public and private sectors.   Based upon stakeholders’ feedback, some CG drivers were either eliminated, amended or others added.  Key findings are presented in the next section. 


This analysis utilises results and observations from across methodological approaches outlined above. The primary data collection effort sought to validate “first cut” CG drivers while unearthing new realities as experienced by respondents, and to evaluate how these findings relate to existing CG best practices as derived from review of local and international literature relevant to PBs.  Essentially, the analysis gave primacy to the majority views of respondents on crucial issues in confirming the importance of the proposed CG drivers while documenting the stories told and suggestions and recommendations proffered. 

Based on 16 ‘first cut’ CG drivers that were sent initially to CG expert respondents for their ranking on a scale 1 to 5, 1 being not important to 5 being critically important, all CG drivers received overwhelming endorsement except one (co-opted members, invitees and ex-officio officers (57%)).  The remaining 15 “first cut” drivers received a combined ranking of very important and critically important from between 76 percent (board processes—meeting management and dynamics) and 100 percent (board composition and clarifying the relationship between board and management) of respondents. This therefore signals the wishes of stakeholders for at least 15 of the initially proposed good CG drivers to be considered in a CG framework for PBs in Jamaica (See Table 1).  
Table 1: Endorsement and Ranking of Key “First Cut” CG Drivers
How important are the following Key Corporate Governance benchmark drivers? Each factor has been ranked based on a scale of 1-5.  Rating Scale: 1=not important; 2=of little importance; 3=fairly important; 4=very important and 5=of critical importance. Respondents’ Aggregate Scores of 4 (very important) and 5 (of critical importance) only
(a) Board composition 100%
(b) Criteria for nominating and selection of board members 96.4%
(c) Procedures for appointing a board of directors 79%
(d) Board orientation, training and continual development 89%
(e) Roles and responsibilities of the board and key fiduciaries –chairman, directors, chief executive officer (CEO), corporate secretary, committees 96.4%
(f) Clarifying the relationship between the board vis-à-vis management 100%
(g) Clarifying the relationship between the board and management vis-à-vis stakeholders 96.4%
(h) Board processes, meeting management and dynamics 76%
(i) Independence and powers of Board in decision making 89.3%
(j) Public Bodies information management and disclosure 82%
(k) Internal audit and controls 92.8%
(l) External audit and controls 87.3%
(m) Co-opted members, invitees and ex-officio officers 57.1%
(n) Board and CEO accountability, performance and monitoring and evaluation 89.3%
(o) Code of Ethics for directors and officers 89.3%
(p) Gender equality issues 88.3%

Several of these CG drivers were subjected to further stakeholder consultation via focus groups and town hall meetings in additional to personal interviews. The next section presents snippets of respondent views from personal interviews and probes key CG drivers as indicated and discussed below. 

Role and Responsibilities of the Board: The legal basis for the roles and responsibilities of the board are limited to the provisions in the Companies Act of Jamaica 2004 and Public Bodies Management and Accountability Act 2002 (amended 2011). However, prevailing PBs legislation is significantly deficient by having not delineated the role of the chairman vis-à-vis the CEO and other key fiduciaries. Respondents agreed that the lack of formal codification of the role and responsibilities of the board has given rise to many issues regarding board members.  

Some of these frequent pitfalls of directors include: too frequent involvement in the day-to-day activities of the organisation; inappropriate channels of communications (directors instructing executives without going through the CEO or chairman); directors, chairmen and responsible ministers frequently issuing instructions to supervisees of the CEO to accept or reject a particular contract, or to hire a crony of the minister or well-known political activist; and a chairman placing unreasonable demands on a CEO for salaried compensation or other forms of remuneration outside the remit of the Ministry of Finance and Planning guidelines for compensating board members. There have been reported cases of chairmen and members of the HR committee of the board interfering in the process of recruiting subordinates of the CEO, other than the Chief Internal Auditor and the Corporate Secretary, each of whom ought to be reporting to the board of directors.

Board Composition: Many respondents related their experiences in the following ways: 
  • “Boards are not always composed with the right mix of skills and competence among their membership.”
  • “Many Boards are selected with little attention paid to ensuring that critically required skills such as auditing, financial, legal and business specific training and experience are possessed by its members.”
  • “Boards are often made up of supporters of the responsible minister and are not usually intellectually adept for the rigors of board directorship.”
  • “Competencies, time commitment and value-adding capacity of a person should be the core requirements for board membership.”
  • “A greater mix of experience, qualifications and youth should be considered to enhance board diversity. Such composition should ensure as wide a stakeholder representation as possible.”
Role of the CEO: There have been several reports and instances of this position being undermined by chairmen, directors, and ministers. The CEO’s authority is often circumvented and direct access is obtained to his/her subordinates for information and/or cooperation on self-serving contractual and procurement issues. In other instances, the chairman and or a director may sometimes show up at the offices of the CEO and attempt to issue instructions to CEO subordinates on matters related to the board or committee, or requesting personal favour. Respondents agreed that directors need clear guidance and instructions as to their roles and limits, as distinct from those of the CEO, his/her day-to-day duties and the boundaries between senior management and the board.  

Board Appointment Process: Focus group participants and individual expert interviewees expressed a desire to see only competent directors appointed, based on business-specific knowledge, qualifications, experience, and general capabilities. This, respondents believed, would add immeasurable value to the PB. Other points expressed by respondents were the need for background checks, especially for directors of self-financed PBs, to clear each director on grounds of criminal record, potential and obvious issues of conflict of interest, and any pending or a recently concluded legal dispute with the PB.  One respondent in supporting this point related a case of a director who had been duly appointed to the board of a PB with which he had outstanding legal issues. 

Director Induction and Orientation Processes: It was felt by respondents that the lack of a structured programme for director orientation had compounded the problem of a dearth of business-specific knowledge among directors. This was argued to be contributing factor to their low level of understanding of what their duties and responsibilities are, their propensity to interfere in the day-to-day affairs of the PBs, and their resorting to employing inappropriate communication channels to obtain information from management officers.  

Training and Development:  There was unanimous agreement among stakeholders that training and continual development should be made mandatory for all directors of the board of PBs, and become accessible within three months of appointment.  Additionally, there was a call for a formal training course for permanent secretaries and ministers to be made a core requirement of their orientation process. Respondents (the relevant beneficiaries) suggest that such a course should address the entire procurement process; their roles as ministers and public services; the relationship between a minister and his/her public service; their relationship with PBs and in particular, statutory bodies; the relevant legislation; performance management and appraisal issues; the role of the Auditor General’s Department; the role of the Contractor General; the Office of the Attorney General and the Accountant General. There is currently no such mandatory programme of learning and development for permanent secretaries and ministers, and chairmen and directors of PBs in Jamaica. 

Board Performance Evaluation: While it was obvious from discussions that not all stakeholders were familiar with the practice of board performance evaluation and how it works, consensus was obtained that PBs should adopt a formal process for annually appraising the performance of the board of directors. Respondents suggested that such a process should include the board committees as well. Participants felt that constructive feedback from the evaluation process could inform individual members on how they are doing and guide adjustments towards improved performance and adding value. They also felt that an evaluation that captures critical elements of board performance indicators could go a far way in determining director tenure and compensation –where performance is so determined.  

Board Information Management and Disclosure:  Respondents suggested that the full compensation packages of all CEOs of PBs should be published annually in a special edition of the local print media, especially those of the self-financing entities. Also, respondents suggested that there be a statement in each PB’s annual report (probably one-page) on its corporate governance activities: membership of audit committee and attendance record of directors.  Additionally, high profile PBs should be asked to report to Parliament on their stewardship of public funds once per year.

Role and Authority of Board Invitees and Ex Officio Officers: Respondents sought clarification of the roles, voting rights at board and committee meetings and the identity (names and qualifications) of those serving as directors, ex-officious and invitees. They believed the roles, contributions and limits of these individuals should be codified under membership and roles and responsibilities of the board and its committees. 

Managing Stakeholder Relationships: It was strongly proffered by respondents that the CEO should be the chief spokesperson of the PB to shareholders and the public at large. Respondents also suggested that there is a void in how public information is communicated by PBs regarding matters of national importance and selected crisis scenarios. They are calling for a stakeholder engagement strategy that should include policies to communicate crises. Informants also suggest that PBs should devise a strategy for board and management to engage stakeholders on a regular basis in bolstering good corporate citizenship. 

Enterprise Risk Management (ERM): Not all respondents understood the role and importance of an integrated approach to risk management, but were made more aware from a brief overview provided by the Consultant, after which they endorsed the idea of a policy and strategy to introduce and implement ERM in each PB and government ministry. Informed participants suggested that more risk-based auditing needed to be practiced by both the Auditor General’s Department and by all Internal Auditors of PBs and government ministries. 

Gender and Equality Issues: The majority of respondents felt that while the participation of women in board deliberations, as in all other spheres of business was important, the very basic prerequisite for board appointments and participation should be based on a set of core competencies rather than on whether one was male or female.  As one respondent puts it, ‘I am not in favour of “tokenism” – “window dressing” as it does not add any value.’ This respondent did not think affirmative action was needed in the case of women on boards, as was the case in the USA some years ago when it was instituted for college access for minorities.   

Code of Ethics for Directors: Respondents believed that PBs would be better served if they toned down the rhetoric about ethics and did more to institute and inculcate ethical standards into their day-to-day operations. Respondents suggested that a standard ethical code be designed and adopted for all PBs across the public sector, and that individual entities make slight amendments to address individual situations as required.  

Corporate Social Responsibility: Participants believed that the PBs, in addition to being responsible for corporate performance, especially those involved in large-scale commercial activities (state-owned enterprises) should articulate and establish their own strategy of the triple bottom-line–economic, social and environmental concerns.  Participants stressed the need for inherent values and commitment to a holistic approach to economic, social and environmental issues that could result in the business enterprise being able to protect, enhance and invest in the well-being of society and the natural ecology, and that good corporate citizenship should be incorporated into the culture of the PB.     

The preceding discussion and analysis underscores the importance respondents have placed on the majority of the 16 “first cut” CG drivers tested in Table 1.  Respondents also suggested new CG drivers they believed were important for consideration while others were identified to be merged or eliminated. For example, the following five additional new CG drivers have emerged: 
  • Governance of board
  • Corporate social responsibility
  • Managing stakeholder relations 
  • Monitoring arrangement of ministries 
  • Enterprise risk management  
Items e and m of Table 1 were recommended for separation and hence form five separate CG drivers, namely: 
  • Role of the board
  • Role of the chairman
  • Role of the CEO
  • Role and authority of board invitees
  • Role and authority of ex-officio officers. 
In the final analysis, 20 CG drivers were confirmed and subsequently accepted as the key elements or principles on which the CG Framework for Public Bodies of Jamaica was developed (see Appendix 3 for an abridged version of the CG Framework for Public Bodies of Jamaica). A more detailed version was submitted to and approved by the Cabinets and both Houses of Parliament of two recent successive Governments of Jamaica after a series of vetting and amendments.  


The Ministry of Finance & Planning (MF&P) Public Sector Enterprise Division and the Public Sector Transformation Unit (PSIU), with the support of the Office of the Cabinet, have responsibility for developing appropriate action plans to outline the mechanisms by which policy goals and objectives will be achieved, detailing the strategies, roles and responsibilities and timeframe (person comm.).23 In addition, the MF&P is responsible for of the Framework, including implementation oversight of the agreed action plans, and subsequent evaluation and revision of the Framework.   

The implementation success of a project of this scope requires not only a clearly defined strategy and step-by-step approaches in addressing capacity needs, but must be anchored by an overarching monitoring framework mechanism for checks and balances and the effective deployment of each and all components. Figure 1 provides an illustrative perspective of the project’s organisational structure.  

Figure 1: Corporate Governance Framework for Public Bodies Implementation Structure

In further support of this structure, the following were adapted: 
  • Capacity Needs Assessment: The MF&P reviewed the capacity requirements to lead the implementation of the Corporate Governance Framework and has since identified, recruited and deployed relevant staff.
  • Ministry Monitoring Framework established:  The Permanent Secretaries as chief advisors to the Ministers are required to monitor performance against expected results, manage risks and advise/inform the Minister accordingly on public bodies that operate within the portfolio responsibility of the Ministry.  
  • Implementation Oversight Committee constituted: This committee has responsibility for the review of deliverables and quality control of the consultancy. 
Upon the approval of Cabinet, a select number of critical CG principles were targeted for full-fledged development and rollout across all PBs. Table 2 provides highlights while Appendix 3 sets out the full slate.  
Table 2: Select Key Corporate Governance Principles/Recommendations for implementation
CG Framework Principle Critical Task required and status of implementation
Competency Profile for Boards To develop procedures for identifying the competency profile for Boards. This has been completed about a month before the time of writing. To be fully deployed throughout all public bodies.
Selection, Nomination, Appointment & Termination of Board Directors To develop procedures for the selection, nomination, appointment and termination of Board Directors. Consultancy almost complete at the time of writing.
Board Performance Evaluation To develop instrument for the conduct of Board Performance Evaluation. This has been put to tender at the time of writing and shortlisted subsequently notified. 
Managing Stakeholder Communication & Relationship To develop protocol on communicating with stakeholders and the media and to seek amendment to the PBMA to provide for the annual report to detail the methods of communicating and engaging with stakeholders.  The RFP has been publicized at the time of writing. 
Enterprise Risk Management To develop Enterprise Risk Management Mechanism to be used by Boards. This is yet to be put to tender. 

Critical to the successful implementation of any organisational change process is a programme of promulgation and enforcement. Key to this was awareness and sensitization of all relevant constituents soon after the CG Framework received the nod of approval from the Cabinet of Jamaica. There were in excess of 15 sensitization sessions, half-day in duration, held during 2013 covering all government ministries and targeting Boards of Directors of all PBs (personal interviews).24 Alerts through the mass media, including all radio stations, government-controlled television stations, cable networks and printed media were utilised. 

The CG Framework has become one of the most renowned change initiatives within the GOJ in recent years.  Many PBs have been proactive in adapting and amending the CG Framework in shaping their own corporate governance codes or board charters while others have posted the CG Framework on their websites with supporting statements to the effect that they are in compliance with same. Some of these PBs include National Solid Waste Management Authority, Consumer Affairs Commission, Heart Trust/NTA, Broadcasting Commission, and E-Learning Jamaica to list just a few.  A distinctive novelty of this Framework and hence its impact can be felt in the instance where when a new board is approved or directors added, the respective PBs would contact their responsible ministry who in turn would request some level of CG orientation or sensitisation regarding the CG Framework principles and recommendations for these new directors. 


The Corporate Governance Framework for Public Bodies Jamaica has been designed to embody best practices, in keeping with international standards and appropriateness for prevailing realities of Jamaica.  It is recognised that some PBs, depending on their size and resources may need to adapt specific rules in the framework to meet their particular circumstances.  This flexibility that the CG Framework affords is yet another distinctiveness when compared to all other similar CG codes internationally. To the extent that there is a departure, the board will be required to provide sufficient, reasonable explanation in the annual report.  

The accepted key principles presented in this document have sought to clarify the CG Framework within which PBs should operate. It is important to note however, that within these principles, additional work is required to establish specific guidelines, standards, and tools, albeit many have been in advanced stages of development, or, are being prepared for the issuance of a Request for Proposals (RFPs)25 to solicit consultants for execution. Some of the threats to effective governance among PBs include a chronic shortage of local CG expertise, lack of appropriate technology and inadequate financial capital. The process of implementing this CG Framework will require large capital outlays. In the end, the gains from increased efficiency, effectiveness and economy in the deployment of public service will more than compensate the efforts. The limitation to this study was the inaccessibility to a greater number of directors and officers of PBs to obtain first-hand realities of their respective challenges and triumphs with the implementation of the CG Framework which, if obtained, could have enriched the study. 

This CG Framework for Public Bodies is the first of its kind to be initiated by a national economy in the English-speaking Caribbean. It is indeed a novel innovation in the motivation of its grounding, its objectives, methodological approaches and depth and breadth of scope. Essentially, when completely implemented, it will have surpassed all other existing national codes in effecting needed CG reforms across PBs in the context of a developing island-state economy. This author is suggesting that the distinctive and innovative nature of the CG Framework presents a new frontier of New Public Management (NPM) doctrine, particularly in the ways in which conventional thinking and organisational bureaucracies have given way to its success, and thanks to the concept of pressured innovation as coined and discussed under section 3 of this paper. The author concludes that a bureaucratic paradigm such as governmental institutions presents both challenges and opportunities for achieving innovative beneficial reforms.  Success in implementing CG reforms will be more likely when there is willingness and commitment by both internal and external influencers to challenge bureaucratic barriers with creativity, flexibility, adaptability and risk-taking as necessary for innovation in contemporary public institutions.   

How important are the following Key Corporate Governance benchmark drivers?          
(a) board composition  1 2 3 4 5
(b) criteria for nomination and selection of board members 1 2 3 4 5
(c) procedures for appointing board of directors 1 2 3 4 5
(d) board orientation, training and continual development 1 2 3 4 5
(e) roles and responsibilities of the board and key fiduciaries – chairman, directors, committees, corporate secretary 1 2 3 4 5
(f) clarifying the relationship between the board vis-à-vis management 1 2 3 4 5
(g) clarifying the relationship between the board and management vis-à-vis stakeholders 1 2 3 4 5
(h) board processes-meeting management and processes 1 2 3 4 5
(i) independence and powers of the board in decision making 1 2 3 4 5
(j) public bodies information management and disclosure 1 2 3 4 5
(k) internal audit and controls 1 2 3 4 5
(l) external audit and controls 1 2 3 4 5
(m) co-opted members, invitees and ex-officio officers 1 2 3 4 5
(n) board and CEO accountability, performance monitoring and evaluation 1 2 3 4 5
(o) code of ethics for directors and officers 1 2 3 4 5
(p) gender and equality issues  1 2 3 4 5

Rating (1 = not important, 2= of little importance, 3=fairly important, 4=very important, 5= of critical importance.

The above key benchmark drivers are meant to reflect the broad elements of a good corporate governance framework for public bodies of Jamaica. The scope, nature, extent and other features of each of these drivers will be further informed by a review of the social science literature on corporate governance, existing international CG codes, focus groups studies and consultant expertise. 


Internet Survey for Validating ‘Good’ Corporate Governance Drivers 
Permanent Secretaries from the following Ministries: Ministry of Youth, Sport and Culture, Ministry of Tourism, Ministry of Agriculture and Fisheries, Ministry of Water and Housing, Ministry of National Security, Office of the Prime Minister, Ministry of Transport and Works, Ministry of Mining and Energy, Ministry of Labour and Social Security, Ministry of Industry, Commerce and Investment.  

Corporate Experts and Directors: Professor Mervyn King, Philip Armstrong, Mr. John Mahfood, Dr. Henley Morgan, Wesley Davis, E. G. Hunter, NIC, John Lynch, Earl Richards, Lloyd Pommels, Daphne Douglas, Princess Lawes, Noel Hylton, Ryland Campbell, Peter Fletcher, James Moss-Solomon, Ann-Marie Rhoden, Al Powell, CIB, Petroleum Corporation of Jamaica, Rural Electrification Programme, Jamaica Bauxite Institute, Central Information Technology Office, Antidumping and Subsidiaries Commission, Micro Investment Development Agency, Scientific Research Council, Broadcasting Commission, National Library of Jamaica Limited, National Insurance Fund, National Council for the Aged, Coconut Industry Board, National Irrigation Commission, Jamaica Foundation for Life Long Learning, HEART Trust/NTA, Financial Services Commission, National Ex-Im Bank of Jamaica Ltd, North East Regional Health Authority, University Hospital of the West Indies, Firearm Licensing Authority, Tourism Enhancement Fund, Devon House, Jamaica Mortgage Bank, Transport Authority, Port Authority of Jamaica, Caribbean Maritime Institute, Development Bank of Jamaica, Jamaica Social Investment Fund, Urban Development Corporation, Social Development Commission, Women’s Centre and Institute of Sports. 

Focus Groups and Town Hall Consultation Meetings: (Chairmen and Directors of Boards of Public Bodies and Ministry Representatives)   
Laleita Davis-Mattis, Jamaica National Heritage Trust;  Tanny Shirley, SERHA; Pauline Mullings, NCG; K. E. Vendryes, Real Estate Board; Joe Mahfood, NCSC; Rudolph Muir, Jamaica Racing Commission; Loetta Reid-Pitt, Financial Services Commission; Robert Lawrence, Spectrum Management Authority; Marshalie Crossqill, Ministry of Finance and the Public Service;  Lenworth Taylor, MFPS; Beryl Weir, Women’s Centre of Jamaica Foundation; CJ Jackson, Office of Utilities Regulation; Deborah Gardiner, Cabinet Office; Audrey Thomas  

CEOs from the following Public Bodies: FSL, Airports Authority, ODPEM, JIPO, SRHA, Heart Trust/NTA, Petrojam, TPDCo, National Library Service, Agricultural Development Bank, National Water Commission, Spectrum Management Authority and National Health Fund. 

Ministry Chief Internal Auditors:  Ministry of Youth, Sport and Culture, Ministry of Health, Ministry of Industry, Investment and Commerce, SERHA, Ministry of Agriculture and Fisheries, Office of the Prime Minister, Ministry of Education, Ministry of Tourism, Ministry of Education Ministry of Transport and Works, Ministry Labour and Social Security and Ministry of Energy and Mining.

Public Bodies’ Chief Internal Auditors: Bureau of Standards, National Irrigation Commission, The Housing Agency of Jamaica, Jamaica Library Service, Nutrition Products Limited, North East Regional Health Authority, South East Regional Health Authority, Social Development Commission, Jamaica Cultural Development Commission, JCAA and Transport Authority Ltd

Expert Group of Professionals: Port Authority; Nutrition Products, Scientific Research Council, Coconut Board, Bureau of Standards, Early Childhood Commission, Ministry of Youth, Sports and Culture, National Health Fund and Tourism Enhancement Fund.

Women’s Lobby Group: Jamaica Women’s Political Caucus, Women Media Watch, Bureau of Women’s Affairs, WROC and Institute of Gender and Development Studies, UWI, Mona. 

Personal Interviews: 
The Contractor General, The Auditor General, The Accountant General, Deputy Financial Secretaries, Public Enterprise Division, Deputy Financial Secretary, Public Expenditure Division, An Opposition Senator and Spokesman for Industry and Commerce, The Minister of Transport and Works, Permanent Secretary (immediate former), Office of the Prime Minister, Permanent Secretary, Ministry of Tourism, Permanent Secretary, Ministry of Labour and Social Security, Permanent Secretary, Ministry of Industry, Commerce and Investment, Permanent Secretary, Ministry of Transport and Works

1 Every Public Body should be headed by an effective Board which is collectively responsible for Corporate Governance oversight and is accountable to the Responsible Minister and stakeholders. The Board should decide on the Public Body’s  values  and  strategy  and  provide  the  necessary  leadership  to  secure  human, physical and financial resources required for the organisation to meet its objectives.
2 The Board is the primary decision making authority of the Public Body and constitutes the fundamental base for corporate governance for the  organisation. Each Board must have a Charter which defines the roles and responsibilities and should establish and disclose their roles and responsibilities to avoid any misunderstanding between the Board’s role and that of executive management.
3 The Minister appoints the Chairperson as head of the Board, who in turn is directly responsible to the Minister on the policy and strategy of the organisation. The Chairperson should be an independent outsider and holds no executive position or material connection with the Public Body. The position of  Chairperson should  at  all  times  be separated from that of CEO, consistent with the GOJ Accountability Framework, should be selected from an industry not related to, or conflicting with, the nature of the business of the Public Body.
4 The CEO reports to the Board through the Chairperson and role should be to run the day-to-day operation of the Public Body in accordance with mutually agreeable and written performance objectives.  The CEO’s contract should be void of any ambiguity whatsoever, with the clear definition of roles and responsibility for management, inclusive of the authority delegated from the Board.
5 Every Board should appoint a Corporate Secretary (CS) to execute governance, administrative and compliance functions demanding a high degree of skill, competence and ethical conduct. The appointment of a CS is a requirement under Jamaican business law, where the organisation is a limited liability company irrespective of ownership. The CS should report to the Board directly.  
6 There should be a formal and documented procedure for recruiting Board invitees. This should be established in a Code of Conduct for Boards of Public Bodies. Board invitees should neither be allowed to vote at Board nor Board committee meetings as they are not members of a Board. They are usually invited to provide specialist advice not readily available on the Board.  
7 There should be a formal and documented procedure for the treatment of Ex- Officio Officers.   This should be established in a Code of Conduct for Boards of Public Bodies. Ex-Officio officers should have the same duties, responsibilities, rights and privileges as do all appointed Board members, including the right to vote and should not be expected to commit the Government in respect of matters which are required to be referred to a higher level of authority.
8 Every business is unique and should likewise be matched with the appropriate set of skills and competencies to enable it to carry out its functions effectively, efficiently and productively. Key competencies such as auditing, financial, accounting and for some, legal skills are required to meet specific Government regulations and guidelines. There should be a periodic review of the existing skills and competencies of Board members against the competencies required for the effective operation of the Public Body.
9 The Board should be composed of a diversity of skills, knowledge, qualifications, experience, gender and age to assist the Public Body in achieving its objectives and perform its functions to add optimal value to the Public Body. Diversity should be a key feature of Board composition with keen attention paid to the balance of skills, experience, diverse backgrounds, gender and youth representation, where possible, which can enhance the quality of the Board.
10 The responsible Minister or other relevant authority should appoint Board members based on merit, against objective criteria, with due regard for the benefits of diversity and commitment to the policy objectives of the government. There should be a defined policy for the nomination, selection, appointment and termination of directors that is transparent, inclusive and that lends itself to continuous review.
11 The Ministry of Finance & Planning should provide leadership for the formal process of orientation and sensitization for new Directors, which should encompass a description of their role, duties, responsibilities, board practices, procedures, inter alia.   The Board should identify opportunities for professional development of all members in order to update their skills and improve their knowledge of the business environment in which the organisation operates.
12 Each Board of a Public Body should be subject to a formal and rigorous annual appraisal of its performance and  that  of  its committees and  individual Directors. The Ministry of Finance & Planning should develop a Performance Evaluation Template to be used by all Boards.  The evaluation should address whether the objectives of the Board or committee are being met in an effective and efficient manner and be used constructively as a mechanism to improve Board effectiveness.
13 The Board should ensure that the Public Body has effective internal control systems. These systems are critical to the Corporate Governance regime of the Public Body, and include Internal Audit and Procurement for which Board Committees should be assigned responsibility. Every Board should establish an Audit Committee with at least three members.   All members should have suitable qualifications, skills and experience and be independent non-executive directors.
14 The systems of internal control should be based on an ongoing process to identify and prioritize the principal risks to the Public Body.  Every Board should therefore put in place a formal Enterprise Risk Management (ERM) Framework, developed by the Ministry of Finance & Planning to manage risk across all functional areas and business units of the Public Body. The framework should be designed to identify, assess, monitor and manage risk. The risk profile of a Public Body may include operational, business, regulatory, market, credit, economic, capital and HR related risks.  Any material changes to the risk profile of the Public Body should be reported to the Minister and Permanent Secretary.
17 The Ministry of Finance and Planning is responsible for developing a Board Information  &  Disclosure  Policy,  which  should  include  the  types  of  information  to  be disclosed and the time for it to be disclosed. On first appointment, and at any time when circumstances dictate, all directors should, in good faith, disclose to the Board, for recording and disclosure to external auditors, any business or other interests that are likely to create a potential conflict of interest.  The Board is responsible for the Public Body maintaining effective communications with stakeholders.
18 Every Board should ensure that its Public Body has a procedure and strategy for responding to stakeholders’ concerns on a continual basis and such communication should be proactive and transparent, which is important for building and maintaining relationships. The Public  Body  should  have  a  clear  and  coherent  understanding  of  its  key stakeholders, their information needs and the most effective means of communicating with them.  The Board is responsible for the Public Body maintaining effective communications with stakeholders and the media.
19 Each Board should observe the Code of Ethics developed by the Ministry of Finance & Planning as part of its Corporate Governance regime.  However, each Board may enhance aspects of the Code where necessary, based on its particular operations, in keeping with guidelines established by the Ministry of Finance & Planning. The Code of Ethics should clarify the standards of ethical behaviour required and should provide guidance as to the practices necessary to maintain the Public Body’s integrity.  The Board should monitor and enforce the observance of these standards.  
20 Every Board should ensure that measures for managerial performance take into account the financial, social, cultural and environmental issues (known as the triple bottom- line-approach) with a focus on their customers and other stakeholders. Each Board should make the issues of Corporate Social Responsibility (CSR) a priority on the Public Body’s business agenda.


KCGD: Key Corporate Governance Drivers: 1- Governance of the Board, 2- Roles and Responsibilities, 3-Role of the Chairman, 4-Role of the CEO, 5-Role of the Corporate Secretary, 6-Role and Authority of Board Invitees,  7-Role and Authority of Ex-Officio Officers; 8-Board Composition, 9-Board Diversity & Equity Issues, 10-Board Selection and Appointment, 11-Board Orientation, Sensitization, 12-Board Performance Evaluation, 13-Role and Independence of Audit & International Control, 14-Role of the Board in ERM, 15-Monitoring Arrangement of Ministries, 16-Role of the Ministry of Finance, 17-Board Information Management and Disclosure, 18-Managing Stakeholder Relations, 19-Code of Ethics, 20-Corporate Social Responsibilities. 

1    These are State-owned Limited Liabilities Companies; Statutory Bodies; Authorities; Commissions; Executive Agencies and others, usually wholly-owned or controlled by the Government of Jamaica.

2    Bonnick, G., 1998. Storm in a teacup or crisis in Jamaica’s Financial Sector. Presented at the XXX Annual Conference of the Caribbean Centre for Monetary Studies of The University of the West Indies, St. Augustine, Trinidad and Tobago.

3    Hilton, P., 1999. Address to the Jamaica British Businessmen Association, Le Meridian Jamaica Pegasus Hotel, (July 31)

4    Clarifying the Corporate Governance for Public Bodies (RFP 2006/POO6), Section IV, pg. 22: Scope of Work

5    Private Sector Organisation of Jamaica (PSOJ) Corporate Governance Code is specifically framed for Private Sector listed and unlisted Companies. http://psoj.org/corporate-governance/ [accessed March 12, 2016]

6    Trinidad and Tobago National Code Corporate Governance Code (TTNCGC) is a project of the Trinidad and Tobago Chamber of Commerce, Trinidad and Tobago Stock Exchange and the Caribbean Corporate Governance Institute. It is note a governmental initiative and neither does it emphasis the needs of Public Bodies. http://chamber.org.tt/projects/ttcgc/ [accessed March 12, 2016]

7    King III Report (2009) of South Africa has been developed to serve both public and private sectors. http://www.iodsa.co.za/?kingIII [Accessed March 12, 2016]

8    Corporate Governance Framework for Public Bodies Jamaica. Ministry of Finance and Planning, page 12.

9    Berle,  A. A. and Means, G.C., 1932. The Modern Corporation and Private Property. New York: McMillan, reprinted 1991.

10    Oman, C. P., 2001. Corporate governance and national development. Technical Papers No. 180. OECD Centre.

11    Kerr, V.L. (2005). Effective corporate governance: an emerging market (Caribbean) perspective on governing corporations in a disparate world. USA: Outskirt Press.

12    Rogers, E. M. (1993). Diffusion of Innovation. New York: Free Press

13    Vigoda-Gadot, E., Shoham, A., Schwabsky, N., Ruvio, A., (2005). Public Sector Innovation for the Managerial and Post-Managerial Era: Promises and Realities in a Globalizing Public Administration. International Public Management Journal. Vol. 8 (1), pages 57-81

14    Golembiewski, R. T., and E. Vigoda. (2000). A Due Process Metaphor for Organizational Behaviour. Vol. 14. Greenwich, Conn.: JAI Press

15    Kimberly, J. R.., and G. de Pouvourville. (1993). The Migration of Managerial Innovation. San Francisco:     Jossy-Bass

16    Ibid 14, pg. 58-59

17    Solutions to challenges achieved through real or perceived pressure applied by external parties whose    influences, resources or participation are usually critical to the success or failure of beneficial institutional reforms, particularly in the public sector.

18    The Sunday Gleaner, May 15, 2016, page 7. 

19    Clarifying the Corporate Governance for Public Bodies (RFP 2006/POO6), Section IV, pg. 22: Scope of Work 4.1). Government of Jamaica/Office of Cabinet, Public Sector Modernization Division, September 2009

20    “Benchmark drivers” are key elements, components, or themes that been accepted internationally and constitute good corporate governance practices in the context of good Corporate Governance Framework for Public Bodies. 

21    Provisional or tentative until proven worthy or accepted by relevant stakeholders through the process of consultations.

22    Based Filatotchev, I., Jackson, G., Gospel, H., (2007). Key drivers of good corporate governance and the appropriateness of UK Policy Responses: Final Report. Department of Trade and Industry, U.K., Kenya Principles on Corporate Governance and Code of Practices for State-Owned Enterprises.

23    Interview with Ms. Audrey Thomas, Director, Public Sector Enterprise Division, MF&P, Jamaica

24    Director, CG Framework Implementation Unit, Ministry of Finance and The Public Service.

25    The Gleaner, Wednesday, February 3, 2016, page B11.  Sunday Gleaner, March 13, page J13.