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Managing Director of the Barbados Stock Exchange (BSE), Marlon Yarde.

Building a centre of excellence critical to attracting investments

In order for Barbados to be in a position to attract foreign direct investment (FDI) and International Business (IB), it must be viewed locally, regionally and internationally as a centre of excellence that focuses on high quality corporate governance at the highest level.

This is coming from the Managing Director of the Barbados Stock Exchange (BSE), Marlon Yarde, who delivered remarks on day one of the ‘The Barbados Stock Exchange Fifth Annual Conference on Corporate Governance and Accountability’, yesterday at the Hilton Hotel Barbados.

“The International Business and Financial Services sector is a significant plank of our economy. To that end – and to attract foreign direct investment (FDI) and international business (IB) to our shores – Barbados must be seen and perceived as a jurisdiction of excellence, one that practices quality corporate governance, at a base level, at international best practice. However, with our small size as an international financial centre (IFC), I believe we must definitely go beyond a base level to attract and retain IB,” Yarde said.

He stated that if this country can accomplish this goal, then it would accrue several advantages, especially as it relates to corporate governance (CG) and these include increasing the opportunities for local companies to acquire financing as a result of a larger flow of capital from international sources and ensuring that there are more efficient risk management practices that would lead to less frequent chances for things like organizational scandals and crises occurring.

“There are several benefits that can accrue to Barbados, particularly with the practice and promotion of excellent CG. These include enhancing the international flow of capital for local companies to access financing from a larger pool of investors; bolstering the reputation of our International Business Financial Services sector; lowering the cost of capital; supporting the good functioning of the financial market; and better risk management practices resulting in reduced risks of corporate crises and scandals.”

The Managing Director of the BSE said that in essence this means that practicing excellent corporate governance is a sound business decision that would reap benefits not only for those particular companies that chose to do such, but also for the economy of the island as a whole.
These include playing a major role in generating economic development; attracting interest from investors and constructing a foundation that would enable companies to draft their strategic objectives.

“From a business perspective, some of the benefits include, inter alia: Being a key element in improving economic efficiency and growth, as well as enhancing investor confidence; reducing the ‘agency cost’ inherent in today’s corporate structure, particularly for large corporations with a dispersed shareholder base; providing structure through which the strategic objectives of the company are set, and the means of obtaining and monitoring performance are determined; providing proper incentives for the board and management to pursue strategic objectives that are in the interest of the company and its shareholders; and engendering a degree of confidence that is essential for the proper functioning of a market economy.”

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