UWI lecturer sees important lesson from Central Bank impasse

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. 

7 Responses to UWI lecturer sees important lesson from Central Bank impasse

  1. Ali Baba
    Ali Baba February 24, 2017 at 12:49 am

    ONLY 1 LESSON HERE: “DO NOT JOIN A MULTITUDE TO DO EVIL, FOR U WILL GET CHASE WAY OR LOCK UP WHILE THE MULTITUDE REMAIN…………….

    Reply
  2. Hal Austin February 24, 2017 at 4:15 am

    The accountant is right. It is a disease that has flowed in from the US, the same person being chief executive and chairman. The two positions should be separated, with the CEO reporting to the chairman and the board, and the CEO being responsible for the execution of company policy.
    This is a gap in our corporate governance, one that includes sons and daughters as CEOs, reporting to their fathers (it is usually a man) as chairman. This is a recipe for corruption.

    Reply
    • Haskell Murray February 24, 2017 at 9:49 am

      If this is in the central bank act this act should be amended and separate the two positions. The ceo should report to the chair and the board period.

      Reply
  3. jrsmith February 24, 2017 at 7:10 am

    The central bank issue, how could you not think if you are concern that our central bank (Governor) would not , always be in the firing line as he the scape goat use to shift the blame away from government ,
    This issue always passes from our two party system….one to the other…
    Its about time the central bank becomes a more local private concern , taking politicians out of the equation , because they are not capable of controlling the finances of barbados continuously bringing it to its knees….
    (Clico )…. is always brought into play to remind everyone how our politicians , cannot manage and are very untrustworthy …

    But as I always say when the protected need protection themselves , we are then open for war….. watch this space lots more to come …….. (The parties voting day is looming )

    Reply
    • Haskell Murray February 25, 2017 at 10:10 am

      Obviously you do not know or understand the role of a central bank . It is not and cannot be a private financial institution. Its main function in the economy is to control the money supply in the economy by controlling the interest rate , but because we have fixed interest rates in Barbados its role is reduced to supporting the government policies.

      Reply
  4. Mikey February 24, 2017 at 9:29 am

    TRUTH COME OUT !!!
    What is the REAL reason why the Governor was threatened
    with “Resign or be fired?” by a politician ?
    Hal or jrsmith can answer that Question, Please.

    Reply
  5. Hal Austin February 24, 2017 at 2:10 pm

    Mikey,

    Wrong person. Try Chris Sinckler or DeLisle Worrell.

    Reply

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