Directors on Board

Aug 21, 2009 Editorial

In our editorial “Get workers on Board”, we suggested that in order to get GuySuCo back on track to profitability, reform of both the functional mandate and the composition of its Board of Directors ought to be undertaken. We discussed the benefits of introducing workers’ representatives on the Board and in this editorial we make some suggestions on the tasks of the members of the Board.
In the ordinary corporation, the Board of Directors are supposed to be looking after the “interests of the shareholders” and usually restrict themselves to formulating policies and strategies for the entity. These “interests” have been identified totally with the profitability of the corporation resulting in an overweening obsession with short-term profits within an “anything goes” corporate culture fuelled by extraordinary management compensation packages. However the ongoing global economic collapse has forced a questioning of the model – especially as it relates to the role of the Board of Directors and their responsibility for the long-term viability of their corporations. Faced with collapsing corporations, directors cannot simply wring their hands and claim that they “didn’t know”.
Similarly, all stakeholders involved with the sugar industry, cannot protest that GuySuCo is “too big to fail” and demand government’s interventions (over $4 billion last year losses covered from the public treasury) to bail them out time and again without accepting that change has to come.
In the developed countries there has been a newfound realisation and growing acceptance that short-term profitability for the corporation has to be eschewed for long-term survival and sustainability. GuySuCo is owned by the people of Guyana and it is from their pockets that the shortfall in revenue is taken. This circumstance should make it easier for the Board of Directors to adopt a perspective that at all times they have to do what is best for the entire country and not for any one stakeholder in the industry.
But accountability and responsibility must be accompanied with commensurate authority and it for this reason that we are suggesting that we have to move away from the model that we presently have, in which the Board is pretty much disengaged from the operations of the corporations, and is dependent totally for its periodic deliberations on reports submitted by management. The Board will have to become much more involved in the operations of GuySuCo in order for it to fulfil its obligations to the people of Guyana. We have to introduce the concept of Managing Directors who have responsibility for overseeing the achievement of specific goals within the overall plan of the corporation.
The drafting of the present Blueprint for GuySuCo by the Board is a good beginning: it would be expected that there would be solid institutional memory of what is expected by management, workers and other stakeholders. The wide geographical spread, with its attendant diverse climatic and agronomic conditions, of GuySuCo’s operations immediately suggest a geographical division of directors’ responsibilities.
Four specific directors, with the appropriate background – especially with field operations, should be tasked with the responsibility of monitoring the West Demerara, East Demerara, West Berbice, Canje and Central Corentyne, and Skeldon estates.
The unwillingness of the field managers to spend enough time in the fields has been conceded by everyone and the rectification of this anomaly will take more than the commendable introduction of an overall field manager for the entire GuySuCo operation. The insertion of the new Managing Directors who would, for instance, visit their target estates at random intervals should provide the signal that the commitment for change comes from the very top.
Broad areas of line responsibility such as finance could also be monitored by qualified directors in a more active manner. Obviously the incentive packages for directors will have to be revisited to attract qualified individuals. The invention of the corporation permitted greater risk-taking but simultaneously an attenuation of owners’ responsibilities to the greater good.
The role of designated “Managing Directors” in GuySuCo may help to bridge that gap somewhat and not so incidentally, also help the corporation rise out of its present troubles.

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Directors on Board

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