Gareth Manning, Gleaner Writer
Dr. Madhav Mhera (left), a United Kingdom--based corporate governance expert, in discussion with Grantley Stephenson (centre), chairman and CEO of Kingston Wharves Limited, and Senator Anthony Johnson on Monday. They were participating in the launch of the Jamaica chapter of the World Council for Corporate Governance, at the Knutsford Court Hotel, Ruthven Road, St. Andrew. - WINSTON SILL/FREELANCE PHOTOGRAPHER
UNITED KINGDOM-based corporate governance expert, Dr. Madhav Mhera, says Jamaican companies can improve their market capitalisation by placing more emphasis on their responsibility to the society.
Dr. Mhera was the guest speaker at the Jamaica Employers Federation and GovStrat Ltd. corporate governance conference held at the Knutsford Court Hotel in St. Andrew yesterday.
Speaking later with Wednesday Business, he said that acting on one's social responsibility creates a perception of social commitment in the market that helps to drive up profits.
IMPROVE CAPITALISATION
"We have now come to the conclusion that through the various case studies that have been done, that it really does improve your market capitalisation [though] it is not done simply to profit through the perception of the market in terms of your social commitment," he says.
"We believe that in order to create wealth for stakeholders, you must put stakeholders first; the customers; the environment; the society. Because once they are benefiting, it is going to help the corporation as a whole," Dr. Mhera added.
He said companies that have made significant improvements in their market capitalisation are companies that have worked with the poor and have used their profits to benefit the poor.
He pointed out that there are some international bodies, particularly banks, that have benefited from acting on their social responsibility.
He noted that Barclay's PLC has benefited enormously from its public relations by improving access to micro financing for many developing countries across the globe, which has helped to lift the veil of poverty in these countries by creating opportunities for the poor.
"In the old days, you had to have a lot of money in order to open an account. Now there are even small account holders [and] they are able to finance their micro businesses on a smaller scale," he says.
He pointed out that the access to funding has helped to drive entrepreneurship in these countries by allowing people to secure assets and converting into more tangible seed capital sources.
ACCOUNTABILITY ISSUES
5Dr. Mhera says for Jamaica to benefit holistically from corporate governance it must deal with issues outside of the organisation that will help to build public trust.
"People are looking for transparency, accountability, environmental responsibility, social responsibility," he said. "This has become far more important for people."
Dr. Mhera is chairman of the World Council for Corporate Governance in the U.K., president of the World Quality Council and president of the World Environment Foundation.
