NBS behaved more like a multinational corporation than an indigenous entity

Jan 25, 2018 Letters

DEAR EDITOR,
The imbroglio involving the New Building Society and its erstwhile managers is indeed a landmark case which will be remembered for years to come.
Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship or responsible business) is a form of corporate self–regulation integrated into a business model. CSR policy functions as self-regulatory mechanism, whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards and national or international norms.
With some models, a firm’s implementation of CSR goes beyond compliance and statutory requirements, which engages in “actions that appear to further some social good, beyond the interests of the firm and that which is required by law”. The aim is to increase long-term profits and shareholder trust through positive public relations and high ethical standards, to reduce business and legal risk by taking responsibility for corporate actions.
Banks are among the organisations worldwide that take special care to manage and mitigate financial and other forms of risks. As to why the NBS has taken such a deleterious path remains known only to its directorate. What, is for certain, are the catastrophic cascading consequences which (will) ensue. These include damage to the morale of employees; blight on the careers of several senior functionaries, and the creation of social disaffection, which could over time affect the future financial health of the company. At worst, these risks could lead to what is known as contagion within the banking industry- that’s when problems facing one bank adversely affect others in the financial web.
According to Harper (1954), risk expresses itself in a company in financial terms: in the potential variability in its assets, earnings, cash flow or in the services it exists to supply. According to Flixbrough (1975), it is possible to divide losses into four types, with differing characteristics of frequency severity and predictability. But I will state five broad categories – Strategic risk, Compliance risk, Operational risk, financial risk, and Reputational risk.
The change in government and consequential change in national policy which itself creates a special kind of risk is also represented herein, so too are the risks associated with non-compliance of laws – and its associated consequences.
But exactly how did all this happen in the first place? Persons familiar with the financial sector opined that the NBS has in this particular instance behaved more like a multinational corporation rather than an indigenous entity, flexing its corporate muscles with impunity with no regards for the sanctity of local laws.
One wonders whether the security officers on duty were not trained to engage officers of the law while seeking to enforce court orders – most all security companies in Guyana use a variation of the” watchman model” so this is hardly part of their induction training.
Again, the action of the guards at the NBS could be in itself a form of risk management, since when all is said and done it’s the company who pays the guarding company and by extension the security guards. “Hint at Quashiba, mek Beneba tek notice!”
Clairmont Featherstone

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