JSE to discuss interlocking directorship

Published: Wednesday September 10, 2008

The Jamaica Stock Exchange (JSE) is concerned about the impact of interlocking directorships amidst an elite group of three directors overseeing half of the $1.2 trillion total asset base of locally listed companies

The matter will be discussed at the JSE's next quarterly meeting.

"It is something we will be looking at," said Marlene Street, general manager of the JSE. "It is not something I think we can immediately cure, because our pool of qualified persons that could readily fit are finite."

Jamaican boards are so interlocked that 26 of 34 local listed companies have boards members on other boards. Additionally, some $402 billion of the $427-billion market capitalisation on the exchange is interlocked.

Of the 336 directors on publicly listed companies less than one per cent oversee 50 per cent of total asset base; and less than 10 per cent oversee 95 per cent of the asset base. The elite three are Charles Johnston, the chairman of banana conglomerate Jamaica Pro-ducers, who also sits on the boards of Kingston Wharves and Bank of Nova Scotia, overseeing $277 billion in total assets; Dr Nigel Clarke, Seprod executive who sits also sits on board of National Commercial Bank overseeing $260 billion; Christopher Bovell long- standing GraceKennedy director who also sits on the boards of Pegasus and First Caribbean Jamaica Bank overseeing some $129 billion in assets. In total the three men oversee $666 billion in total assets.

"We will have that as a part of the agenda item for discussion and see how we move forward," she said. "I am not saying that even then we would have a solution. [But] we will see if there is necessity for a solution or a recommended practise to our listed companies. We would like to start looking at it from that standpoint."

In fact, there are eight directors which sit on three or more boards based on information compiled from the most current company reports and Jamaica Stock exchange yearbook. The only big company without interlocking directors is Caribbean Cement Co Ltd and its parent is Trinidad-based. However, its total asset base is but a fraction of the market at $8.56 billion and market capitalisation of some $7.83 billion.

Sagicor Jamaica head Richard Byles also sits on the boards of Pan Caribbean, Pan Jam, and Red Stripe overseeing some $117.4 billion in total assets. PCFS asset base is already included in Sagicor's asset base.

Jeffrey Cobham noted as a former NCB managing director has influence in insurance, coffee and fashion. He sits on the boards of PCFS, Sagicor, Salada and Pulse overseeing some $98.7 billion.

Patrick Rousseau the consummate lawyer has influence over telecommuni-cations and beverages. He sitting on the boards of Cable & wireless and D&G and oversees some $45 billion in total assets.

Other directors on multiple boards include: William McConell managing director of Lascelles who sits on that company's board along with Carreras. He oversees some $41 billion in total assets, although, up to last November, he was also on the board of Scotiabank which would have pushed that figure to $323 billion; Oliver Holmes is on Salada, Pulse and Carreras; R Danny Williams is on Jamaica Broilers and Sagicor Jamaica; Steven Facey is on Hardware & Lumber and FirstJamaica and Sagicor; Peter Melhado is on D&G and PCFS; Michael Bernard on Seprod and Carreras; and Eleanor Brown is on Salada and Pulse.


Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20080909T230000-0500_139987_OBS_JSE_TO_DISCUSS_INTERLOCKING_DIRECTORSHIP.asp