Corporate governance and firm performance in an emerging market: Evidence from Barbados
Open Access
- 1 August 2019
- journal article
- Published by Virtus Interpress in Corporate Law and Governance Review
- Vol. 1 (2), 51-61
- https://doi.org/10.22495/clgrv1i2p5
Abstract
Good corporate governance practices are regarded as important in reducing risk for investors, attracting investment capital and improving the performance of companies. This paper investigates the relationship between corporate governance practices of the board of directors and firm performance of Colonial Life Insurance Company (CLICO), a large insurance company which collapsed in Barbados, and caused significant financial losses to policyholders. Using a case study approach, we used information from publicly available documents via print media and the internet to research the corporate governance practices and performance of CLICO. Findings reveal that the collapse of CLICO was a result of poor corporate governance mechanisms including lack of board independence, CEO and Chairman dual relationship, poor regulatory environment, non-functioning sub-committees, failure to manage risks, interlocking directorship, political involvement and lack of diversity. Recommendations include effective regulation, separation of the roles of CEO and Chairman, reduced political interference and more diversity.Keywords
This publication has 41 references indexed in Scilit:
- Corporate governance in a developing economy: barriers, issues, and implications for firmsCorporate Governance: The international journal of business in society, 2011
- Are OECD-prescribed “good corporate governance practices” really good in an emerging economy?Asia Pacific Journal of Management, 2010
- Disclosure and corporate governance in developing countries: evidence from GhanaManagerial Auditing Journal, 2007
- The role of audit committees in BarbadosCorporate Governance: The international journal of business in society, 2006
- Board composition, CEO duality and performance among Malaysian listed companiesCorporate Governance: The international journal of business in society, 2004
- Corporate governance and the role of non‐executive directors in large UK companies: an empirical studyCorporate Governance: The international journal of business in society, 2004
- Affiliated Directors: Puppets of Management or Effective Directors?SSRN Electronic Journal, 1998
- The Modern Industrial Revolution, Exit, and the Failure of Internal Control SystemsThe Journal of Finance, 1993
- BOARD COMPOSITION FROM A STRATEGIC CONTINGENCY PERSPECTIVEJournal of Management Studies, 1992
- Separation of Ownership and ControlThe Journal of Law and Economics, 1983