Caribbean companies are transforming boards and cultivating enlightened board practices driven by sustainability, stakeholder engagement and regulatory changes.
These trends, with implications for our companies, have been captured in a worldwide study by the University of Cambridge Institute for Sustainability Leadership (CISL) in partnership with DLA Piper. My TT-based colleague Seeraj Gajadhar was part of the CISL Future of Boards research team doing this study and co-authored some of the reports from the work.
The reports focus on the key trends across four domains or areas of effectiveness driving boards. Boards and their companies are categorised according to organisational logic.
In line with these organisational logics, we can also classify Caribbean companies into three main groups – business as usual (BAU), enlightened shareholder value (ESV) and purpose-driven organisation (PDO).
Legal frameworks and sustainability concerns
The study's first domain examines the legal and regulatory frameworks that guide board practices, focusing on hard and soft laws related to sustainability.
Caribbean companies are increasingly navigating a complex legal landscape that demands a nuanced understanding of sustainability issues.
This legal backdrop pushes boards to adopt practices that align with sustainable futures, urging a shift from mere compliance to proactive leadership in sustainability.
Board practices: Purpose, strategy and reporting
The second domain centres on board practices, including integrating purpose, strategy, materiality and reporting into corporate governance.
Across the world, companies are witnessing a growing emphasis on defining and operationalising organisational purpose beyond profit maximisation.
This trend is coupled with increased incorporation of ESG considerations into strategic planning and reporting, signalling a shift towards more sustainable and transparent business models.
Board membership, structure and dynamics
Changes in board composition, structure and dynamics are also noted, with gradual trends towards diversity and the number of independent non-executive directors (NEDs).
The emergence of sustainability-related sub-committees and the importance of effective leadership skills are critical factors as board practices evolve.
Stakeholder engagement
The fourth domain discusses stakeholder engagement practices, highlighting a gradual evolution in how boards interact with shareholders and other stakeholders.
Companies, including Caribbean ones, increasingly recognise the value of engaging with a broader range of stakeholders beyond traditional financial shareholders.
This trend underscores the interconnectedness of business success and stakeholder well-being.
Organisational logics explained
Before delving into the implications of these trends, it is essential to understand the different organisational logics:
– BAU organisations adhere to traditional corporate-governance models, focusing on short-term financial performance and prioritising imme
