Good Governance: Good Corporate Compliance

Go Lean Commentary

(Photo by Chris Hondros/Getty Images)

Private business versus public government …

Business is to the East, while government is to the West. … East is East and West is West – never the twain shall meet.

Not quite!

Governments many times place restrictions and regulations on private businesses; think:

  • Workers Compensation
  • Child Labor Restrictions
  • Occupational Hazards
  • Social Security / National Security
  • Family Leave / Pregnancy Job Guarantees

So we accept that in a modern society, corporate entities may be required to comply with intrusive government mandates that go above and beyond basic consumer protections; and we call it Good Governance

… then in 2002, considering an American example, along came an even more intrusive government mandate on corporate enterprises (publicly-traded corporations) and the repercussion has been:


… no one complains; in fact, all the qualifying companies comply and buy into the notion that these sets of intrusive laws are good for the overall society. Whew! How did this happen?

This is the drama of the Sarbanes-Oxley law in the US. See the encyclopedic details here:

Title: Sarbanes–Oxley Act
The Sarbanes–Oxley Act of 2002, also known as the “Public Company Accounting Reform and Investor Protection Act” (in the Senate) and “Corporate and Auditing Accountability, Responsibility, and Transparency Act” (in the House) and more commonly called Sarbanes–Oxley, Sarbox or SOX, is a United States federal law that set new or expanded requirements for all U.S. public company boards, management and public accounting firms. A number of provisions of the Act also apply to privately held companies, such as the willful destruction of evidence to impede a federal investigation.

The bill, which contains eleven sections, was enacted as a reaction to a number of major corporate and accounting scandals, including Enron and WorldCom. The sections of the bill cover responsibilities of a public corporation’s board of directors, adds criminal penalties for certain misconduct, and requires the Securities and Exchange Commission to create regulations to define how public corporations are to comply with the law.

5.0 Implementation of key provisions

Source: Retrieved October 30, 2018 from:


VIDEO 1 – Enron Scandal Explained in One Minute: Corporate Recklessness, Lies and Bankruptcy –

One Minute Economics

Published on Aug 9, 2016 – Enron represents perhaps the most popular example of how a corporation can go from hero to zero or in their case, from a stock price of $90.75 and a market capitalization which made it the 7th largest US corporation to bankruptcy. Enron’s bankruptcy made it clear just how far corporate recklesness can go and represented a warning signal that should have been taken a lot more seriously, as the Great Recession has proven.


VIDEO 2 – WorldCom – What Went Wrong –

Published on Nov 28, 2008 – A brief documentary dealing with the largest corporate scandal in history. Created for a second year college accounting class.

The historicity of those events that spurred the Sarbanes-Oxley Act is most incredible. Those two companies – Enron and WorldCom – flouted the presumption of integrity in American business; even the external auditors – Arthur Anderson – was complicit in the wrong-doing. Reform became inevitable. Something had to be done to ensure Good Corporate Governance.

Sarbanes-Oxley became the Good Governance solution. It details roles and responsibilities for firms and auditors alike!

The book Go Lean…Caribbean – available to download for free – serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU), as a technocratic federal government among the 30 member-states in the region. The goal is for expressions of Good Governance in all of Caribbean life; two role models are presented for the Caribbean to emulate: Sarbanes-Oxley (SOX) for Corporate Compliance and the Information Technology Infrastructure Library (ITIL) for computer-based data processing. These assert Good Corporate Governance models. The Go Lean book specifically quotes these references “10 Ways to Grow the Economy” (Page 151) and “Appendix ZN – ITIL Supplement” (Page 338) respectively:

  1. Better Corporate Governance and Financial Markets Oversight
    Learning from the experiences of the US and Europe, provisions embedded in legislation like Sarbanes-Oxley Act and Dodd-Frank Act would be in place from the beginning. The CU will apply the lessons-learned proactively, rather than wait for the economies to implode before instituting reform, like common sense lending standards, transparency, full disclosure, “sunshine” laws. The CU will also implement controls on automated trading systems, ensuring the proper safety valves, monitoring and metering oversight. These measures equal security, a secondary mandate for the CU.
  2. Information Technology Infrastructure Library (ITIL)
    A set of practices for IT Service Management (ITSM) that focuses on aligning IT services with the needs of business. …
    Responding to growing dependence on IT, the UK Government’s Central Computer and Telecommunications Agency (CCTA) in the 1980s developed a set of recommendations. It recognized that without standard practices, government agencies and private sector contracts had started independently creating their own IT management practices.
    The IT Infrastructure Library originated as a collection of books, each covering a specific practice within IT service management. ITIL was built around a process-model based view of controlling and managing operations. [From among the many, the Go Lean book details these 2 practices:]
    o  IT Service Continuity Management
    o  Availability Management

Good Governance is important in the government realms – member-states, federal and non-governmental organization (NGO’s) – but also in the private-corporate sector. Implementing these practices and compliance may be Too Big for Any One Caribbean country alone to introduce and implement; but together – with some interdependence – a leveraged roll-out is viable. Notice this theme, as pronounced in these statements in the opening Declaration of Interdependence (Pages 10 – 12):

Preamble: … while our rights to exercise good governance and promote a more perfect society are the natural assumptions among the powers of the earth, no one other than ourselves can be held accountable for our failure to succeed if we do not try to promote the opportunities that a democratic society fosters.

xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.

xvi. Whereas security of our homeland is inextricably linked to prosperity of the homeland, the economic and security interest of the region needs to be aligned under the same governance. Since economic crimes … can imperil the functioning of the wheels of commerce for all the citizenry, the accedence of this Federation must equip the security apparatus with the tools and techniques for predictive and proactive interdictions.

xxv. Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary & fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.

While the Sarbanes-Oxley Act is an American law, that is not the only country that needs to ensure Good Corporate Governance. As related in a recent blog-commentary, the Caribbean specifically, and the whole world in general, is still reeling from the dire effects of the Great Recession of 2008. This crisis was spurned by bad corporate governance: over-leveraged banks, mis-stated credit ratings, and NINJA home mortgage-holders.  We cannot afford a repeat of these mistakes … ever.

This commentary concludes a 5-part series from the movement behind the Go Lean book in consideration of the Good Governance needs for a new Caribbean regime. The other commentaries in the series are cataloged as follows:

  1. Good Governance: … Versus Partisan Politics
  2. Good Governance: Stepping Up in an Emergency
  3. Good Governance: The Kind of Society We Want
  4. Good Governance: Getting ‘Out of the Way’ of Local Economic Empowerment
  5. Good Governance: Good Corporate Compliance

The Go Lean book was written in the wake of the Great Recession of 2008, reflecting all of the lessons learned from the earlier 2002 crises of Enron and WorldCom referenced in the foregoing encyclopedic reference.

Fool me once, shame on you.
Fool me twice, shame on me.

The book featured Good Corporate Governance practices; this is best described in this one chapter entitled “10 Ways to Impact Wall Street“. The goal of this chapter was to look, listen and learn about best-practices by studying the American eco-system of Wall Street. We do not want to be America; we want to be better! See the specific plans, excerpts and headlines from the book on Page 200 entitled:

10 Ways to Impact Wall Street

1 Lean-in for the Caribbean Single Market
This treaty allows for the unification of the region into one market, thereby expanding to an economy of 30 countries, 42 million people and a GDP of over $800 Billion. The CU’s single market and currency union will allow for the emergence of viable capital markets for stocks, public/private bonds, and securities to create the economic engines needed to fuel growth, expansion and development. The CU will fill in the missing piece of the equation for successful international financial centers by providing the “whole institutional infrastructure of laws, regulations, contracts, trust and disclosure”.
2 Ensure Corporate Governance
The CU adoption of a “Good Governance” principle in its charter extends to its oversight of corporations and other publicly-held institutions. The CU regulatory agencies will oversee under a laissez-faire policy (minimum governmental interference in the economic affairs of individuals and society), yet be vigilant against systemic risks to the monetary and economic engines. So provisions like full disclosure, certifiable accounting integrity and risk-best-practices will maintain public confidence. The CU’s initiatives allows for more separating of duties versus the state regulators.
3 Protect Public Financing Vehicles
4 Adopt Advanced Products
5 Apply Common Sense – Derivatives – Lessons Learned

The use of derivatives helped cause the 2008 Financial Crisis in the US. Though these have the potential of being beneficial products, the compliance, leverage limits, and reserve requirements will not be abandoned as in the US.

6 Ensure Quality and Limits on Electronic Trading systems
These computer programs will have to be certified by CU Independent Auditors before coming online. The process for Quality Assurance (QA) will be assumed by the CU for maintenance of these systems. Before program changes can be implemented the CU will conduct the Test Plan to certify compliance and rollback strategies are in place.
7 Downplay Lawless Impressions – Offshore Banking
8 Protect Against Foreign Currency Manipulators
9 Protect Against Insider Trading and Securities Fraud

Economic crimes involving the securities industry can have far reaching consequences beyond normal felonies. As such, the CU will maintain jurisdiction and marshal the investigations, prosecutions and sentencing of these crimes.

10 Learn from Occupy Wall Street Protest Movement

This Go Lean book presents that the expansion of the 9 stock exchanges in the Caribbean region …

Bahamas (BISX), Barbados (BSE), Bermuda (BSX), Cayman Islands (CSX), Eastern Caribbean (ECSE), Guyana (GASCI), Haiti (HSE), Jamaica (JSE) and Trinidad (TTSE).

… will provide many opportunities to implement Good Corporate Governance standards and practices. But it is conceivable, believable and achievable that we can provide good stewardship to this financial eco-system, for the betterment of all Caribbean society.

The roll-out of these Financial-Watchdog duties for CU agencies will be Day One / Step One of the Go Lean/CU roadmap.

There have been many glimpses of economic governance for a new Caribbean in previous blog-commentaries; consider: Industrial Reboot – Payment Cards 101 Lessons Learned from 2008: Too Big to Fail –vs- Too Small to Thrive Counter-culture: Monetizing the Change Change! Forging Change – Corporate Vigilantism Model: Economics of ‘South Beach’ JPMorganChase spent $10 billion on ‘Fintech’ for 1 year Two Pies: Economic Plan for a New Caribbean Alibaba Cloud stretches global reach with four new Data Center facilities

It is the assertion of the Go Lean book and the many previous blog-commentaries that Good Governance is a requirement to reform and transform Caribbean society. Reforming and transforming the homeland is our quest, our prime directive. This intent has been proclaimed with the following statements:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
  • Establishment of a security apparatus to ensure public safety and protect the resultant economic engines.
  • Improvement of Caribbean governance to support these engines, including a separation-of-powers between the member-states and CU federal agencies.

This is the vision of a new regime for governments and corporate institutions. We want and need Good Governance. We must have this future. While it may be heavy-lifting, it is worth every effort. This is how we make our society a better place to live, work and play. 🙂

Download the free e-Book of Go Lean … Caribbean – now!

Sign the petition to lean-in for this roadmap for the Caribbean Union Trade Federation.

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