A senior academic today warned that there was an important lesson to be learned from the bitter fallout between outgoing Governor of the Central Bank of Barbados Dr DeLisle Worrell and Minister of Finance Chris Sinckler.
Comparing it to situation which existed at insurance giant CLICO before its “embarrassing” 2009 financial meltdown, Dr Philmore Alleyne said: “You have a [similar] situation where the CEO, which is the Governor of the institution, is also the chairman of the board”.
However, Alleyne, who is a senior lecturer in accounting at the University of the West Indies, Cave Hill campus (UWI), warned that this was totally unacceptable and could not be allowed to continue.
“Who is he [Governor] accountable to?” an unapologetic Alleyne asked.
He also suggested that though the policy was a deliberate one, it only worked well when the Minister of Finance and the Governor were singing from the same economic page.
However, “when there is some inconsistency or disagreement, then it backfires”, he said.
Alleyne’s comments came as the Court of Appeal today dispensed with an injunction barring Sinckler from removing Worrell from his post, after the Governor had moved to the High Court to challenge the Minister’s right to dismiss him.
The bitter fallout came at the height of recent economic challenges that saw the Governor distancing himself from Government’s economic strategy, including its continued printing of money to meet its wage bill and its refusal to make suggested expenditure cuts.
However, warning that there was simply too much at stake for the country, Alleyne called for immediate changes to be made to the structure of the semi-autonomous monetary authority.
“We can laugh at these things . . . but the issue is if it’s not solved and keeps going to court, back and forth, now who is actually running the institution?” he asked.
Harking back to the CLICO debacle, Alleyne suggested that blame for the collapse, which has left thousands of policyholders out of pocket, should be shared among its board members.
“It has to be shared responsibility, and you have to sometimes start to put fines and penalties to them,” he said, while complaining the taxpayer was now being asked to bear the cost of what has happened with CLICO.
“If you are going to get the directors’ fees you got to get the risk as well as the return simple as that,” he stressed.
He was at the time presenting the findings of the Corporate Governance and Whistle-blowing Practices in the Caribbean survey, which showed that Barbados had the lowest whistle-blowing tendency of the countries assessed.
The 200-page study, which is ongoing, was designed mainly to examine corporate governance and whistle blowing in the Caribbean, stemming from some occurrences, including the CLICO debacle, the collapse of the Hindu Credit Union in Trinidad and the Allen Stanford Ponzi scheme in Antigua.
“We asked them some open ended questions to get a sense of what they were saying . . . and these are the ones that keep coming out – too much fraud and corruption; poor accountability; lack of law enforcement; political interference, that is big time; and ineffective directorships and governance. In other words, ‘people are just sitting on boards and withdrawing the director fees’ as someone said, as well as rubber stamping things behind,” he reported.