The principal forms of business organisations in Jamaica are:

• sole traders or sole proprietors;
• partnerships – general or limited, joint ventures;
• private companies limited by shares;
• public companies limited by shares;
• companies limited by guarantee with or without a share capital;
• companies having unlimited liability; and
• branches of overseas corporations.

The principal source of corporate governance requirements for companies in Jamaica are:

• the Companies Act, 2004 (as amended);
• the PSOJ Corporate Governance Code, 2021;
• the Jamaica Stock Exchange Rules;
• the Jamaica Stock Exchange Corporate Governance Index Manual, 2020;
• the Corporate Governance Framework for Public Bodies; and
• the OECD Guidelines on Corporate Governance.

The corporate governance requirements that exist for companies with shares that are publicly traded relate to compliance with the principles in the Jamaica Stock Exchange Rules and Rulebooks, Corporate Governance Index Framework and the PSOJ Corporate Governance Code which takes into account whether the company has regulations or policies that cover the following.

• Shareholder rights – the rights of shareholders including access to information, participation in shareholder meetings, approval of board remuneration, shareholder views or management of the control structure of the company.
• Fair and equitable treatment of shareholders – promotes the equitable treatment of shareholders, taking into account the allocation of voting rights and effective mechanisms for minority shareholder participation including the ability to influence board composition, insider trading or disclosure of related-party transactions and adequate notices of shareholder meetings.
• Stakeholders and corporate governance – stakeholder participation including the attention given to employee welfare, employee membership on boards, whistle-blowing policies, environmental issues and employee share option schemes or opportunities.
• Disclosure and transparency – the form of ownership and structure of the company in a manner that promotes openness, trust and transparency including the form of owner structure as well as the role and importance of the audit function, and the extent to which the policies are disclosed in the annual reports or on company websites.
• The board of directors – the responsibilities of the board including its oversight of policies relating to governance, disclosure and ethics, meeting frequency, the composition of the board as between independent and non-independent directors, the existence of board committees and the independent evaluation of board performance.
• Compliance with Jamaica Stock Exchange requirements – the Jamaica Stock Exchange’s regulations including whether they conform to acceptable industry standards such as the IFRS, disclosure of the top ten shareholders, connected parties of directors, shareholders and senior management, communications and timely disclosures, updated website with the company’s mission vision and financial performance. 

All the requirements listed above are desirable and, in the case of the JSE rules, mandatory.

Directors or other officers of the company are generally responsible for ensuring that all filings and maintenance of registers are carried out in accordance with the relevant provisions of the Companies Act. The Companies Act requires the filing of compliance documents with the Registrar of Companies (the “Registrar”), such as notice of change of director(s), secretary or the annual returns. A penalty may be imposed on any director who knowingly and wilfully allows these notices to not be filed or these actions to not be taken on the company’s behalf.

Reporting on ESG is considered in the context of the role of stakeholders in corporate governance. It takes into account whether there are board-approved policies as to how environmental issues are to be addressed or handled. Companies are evaluated on the existence of the policies as well as their availability for inspection such as in the annual reports, on the website or any other publicly accessible source.

The principal bodies or functions involved in the governance and management of a company are:

• the board of directors;
• board committees;
• the company secretary;
• shareholders in general meetings; and
• senior management and the chief executive officer (CEO) or managing directors.

Board committees support the board in carrying into effect the policy making, governance and strategic objectives. There are different types of board committees such as audit and remuneration, corporate governance, risk management and corporate social responsibility committees.

The Board of Directors

The board of directors is responsible for the company’s business, stewardship and strategic direction. Board power is kept in check by shareholders in a general meeting. They make decisions in relation to:

• nomination of board members;
• appointment of board members to fill casual vacancies;
• appointment and removal of the company secretary;
• addressing conflicts of interest;
• auditor-related issues other than their appointment;
• treasury, risk management, capital and internal controls;
• dividend policy and payments;
• communications and disclosure;
• accounting and management control policies and practices including the signing of cheques, promissory notes and other negotiable instruments;
• appointment and termination of directors and senior management;
• acquisition and disposal of major assets;
• budget, strategy, mission and vision; and
• major contracts and investments.

The following resolutions are subject to the approval of the board:

• determining and amending the operational and financial strategic objectives of the company;
• determining and amending key performance indicators in support of the strategic objectives (including, for example, any financial ratios); and
• any other matters that Jamaican laws or regulations or the company’s articles of incorporation require the board to approve.

Other Decision-Makers

The board committees support the boards within the scope of their terms of reference.

The company secretary does not make decisions. The company secretary is the administrative office of the company. The secretary ensures compliance of the company with its governing legislation and regulations, for example, preparation of returns and filings with the Registrar of Companies and maintenance of company registers.

Shareholders are the ultimate decision-makers in companies. They exercise their powers in general meetings. The following powers are reserved to them:

• the appointment, removal and remuneration of auditors;
• the appointment, removal and remuneration of directors; and
• the amendment of articles.

In the decision-making process:

• the board of directors makes decisions at meetings by resolutions or consensus – resolutions may also be made as written resolutions, if permitted by the articles;
• board committees make decisions by consensus and in accordance with their terms of reference;
• the company secretary makes only such decisions as are authorised by the board or terms of appointment;
• shareholders make decisions by resolutions in extraordinary general meetings and annual general meetings by resolutions or consensus – resolutions may also be made as written resolutions, if permitted by the articles; and
• senior management, CEOs and managing directors make decisions to carry into effect the policy and strategic directions of the board and within its authorised limits.

Meetings

All meetings must be convened on proper notice and must be quorate. Directors or shareholders entitled to attend and vote at meetings may waive procedural irregularities in the giving of notice. Absence of quorum cannot be waived.

Extraordinary general meetings or special meetings may be called by the directors at any time or at the request of the shareholders to conduct any business which needs to be conducted in between annual general meetings.

The directors and shareholders meetings are presided over by a chairman. 

Questions, Votes and Resolutions

Questions arising at meetings are determined by a majority of votes except where in relation to the special resolution in Section 138(2) of the Companies Act, which provides that a majority vote is three fourths of all the members present and entitled to vote in person or by proxy.

In cases of an equality of votes, the chairman may, depending on the chairman, have either a second or casting vote.

Article 64 of Table A of the Companies Act provides that at any general meeting a resolution put to the vote of the meeting must be decided on a show of hands unless a poll is demanded by:

• the chairman;
• at least three members present in person or by proxy;
• any member(s) present in person or by proxy and representing not less than one tenth of the total voting rights of all the members having the right to vote at the meeting; or
• a member(s) holding shares of the company being shares on which an aggregate sum has been paid up equal to not less than one tenth of the total sum paid up on all the shares.

The structure of the board of directors is as follows:

• chairman;
• vice-chairman;
• independent directors; and
• non-independent directors.

The chairman presides over board meetings and ensures their orderly conduct, sets the agenda for meetings and leads the discussions, appoints all committee chairs and recommends committee members. The chairman usually maintains strong communication with the chief executive officer and maintains corporate integrity.

The CEO functions as the senior executive officer responsible for ensuring that decisions of the board are implemented and that the organisation functions effectively and efficiently.

Non-executive directors help develop and approve proposals on strategy. They are mostly involved in policymaking decisions, and provide independent oversight and constructive challenge to the executive directors.

It is not uncommon for the board of directors to only have a chairman because of the small nature of a company.

The requirements and recommendations are as follows. Each board member should:

• be independent of each other;
• be able to assess the company’s overall policy and strategy;
• have adequate knowledge of the environment in which the company operates and its associated risks; and
• have subject matter expertise to enable the performance of their role as a board member.

Regarding the board as a whole:

• the composition of the board should match the intended board composition as to diversity in gender and expertise;
• at minimum, the board should be comprised of members with expertise in governance, general finance, business, accounting, law, human resources and management; and
• be transparent as to the number of directors who should be independent.

Appointments may be made by directors to fill casual vacancies and by the shareholders in a general meeting. In either case, they are appointed by ordinary resolution.

There is, subject to the provisions of the Companies Act and the articles of incorporation, a requirement for the staggered retirement of directors except at the first annual general meeting where all the directors must retire. In all subsequent years, one third of the directors must retire, if there are multiples of three. If there are no multiples of three the number nearest to one third shall suffice. Each year, it is the longest-serving directors who shall be required to retire. If two directors were appointed simultaneously, the director to retire is chosen by lot.

Directors may also be removed pursuant to Section 179 of the Companies Act prior to the expiration of their term of office. Directors can also be removed in accordance with the articles, where they:

• cease to be a director by virtue of Section 177 of the Companies Act; 
• become bankrupt or make arrangements or compositions with their creditors generally;
• become prohibited from being a director by reason of any order made under Sections 180 and 182 of the Act;
• become of unsound mind;
• resign by notice in writing to the company; or
• have been absent for more than six months without permission of the directors from meetings of the directors held during that period.

Section 177 deals with the duty of directors who are entitled to be directors by virtue of a share qualification. Section 180 sets out the procedure by which directors may be removed by the court. Section 182 sets out the considerations by the court for the disqualification of the directors which includes persistent breaches of the Act.

The Companies (Amendment) Act, 2017 incorporates the common law duty of directors “to avoid circumstances which, whether directly or indirectly, constitute a conflict of interest or may result in a conflict of interest with the interests of the company”.

The duty is not infringed by mere interest or relationship. The Act provides that this duty is not infringed if the circumstances cannot reasonably be regarded as likely to give rise to a conflict of interest or if the matter giving rise to the circumstances has been approved by the director. Therefore, a director has a duty to disclose the nature of their interest at a meeting of the directors where they are directly or indirectly interested in a matter which may constitute a conflict of interest or may result in a conflict of interest with the interests of the company. The necessary quorum must be met at the meeting without including the director in question.

Additionally, pursuant to Section 193(1), directors or officers must disclose their interests in a contract or proposed contract. They must disclose the nature and extent of their interest in writing to the company or request to have this information entered in the minutes of the meetings of the directors.

Disclosure

The disclosure by a director must be made at the meeting at which a proposed contract is first considered or at the first meeting after they become interested in a contract or proposed contract. A person who has interests in a contract and thereafter becomes a director must disclose his interest at the first meeting of the directors. The same is true for an officer of the company.

A record of this contract must be kept at the registered office of the company. The contract is subject to the approval of the board of directors of the company, and subject to the provisions of the First Schedule. It is important to note that the director concerned must not be present during any deliberations of the board in connection with that approval.

Voting

Additionally, Article 90(2) of Table A of the Companies Act provides that a director must not vote in respect of any contract or arrangement in which they are interested, and if they must do so their vote must not be counted, nor must they be counted in the quorum present at the meeting.

The PSOJ Corporate Governance Code, 2021 recommends that the board identifies in its disclosures each board member that it considers to be independent. The board should determine whether a director is independent in character and judgement and whether there are relationships or circumstances which are likely to affect, or could appear to affect, the director’s judgement. It also recommends that the board should state its reasons if it determines that a director is independent notwithstanding the existence of relationships or circumstances which may appear relevant to its determination, including if the director:

• has been an employee of the company or group within the last three years;
• has or has had, within the last three years, a material business relationship with the company, either directly or as a partner, shareholder, director or senior employee of a body that has such a relationship with the company;
• has received or receives additional remuneration from the company apart from a director’s compensation, and participates in the company’s share option or a performance-related pay scheme;
• has close family ties with any of the company’s advisers, directors or senior employees;
• holds cross-directorships or has significant links with other directors through involvement in other companies or bodies; or
• represents a significant shareholder.

Former CEOs

A former CEO will not qualify as an independent director unless there has been a period of at least three years between the date on which they ceased employment with the company as CEO and the date of their appointment to the board.

The principal legal duties of directors and officers of a company are contained in the Companies Act. The Act stipulates that every director and officer of the company in exercising their powers and discharging their duties must:

• act honestly and in good faith with a view to the best interest of the company; and
• exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances, including, but not limited to, the general knowledge, skill and experience of the director or officer.

Directors have a duty to avoid circumstances which directly or indirectly constitute a conflict of interest.

Directors owe their duties to the company alone.

However, in determining what the best interests of a company are, a director or officer may have regard to the interests of the company’s shareholders and employees and the community in which the company operates.

A director may be removed or required to pay damages in the event that there is a breach of duty.

If a director’s breach causes harm to the company, the following persons may enforce the action on behalf of the company:

• a member or former member of a company or affiliated company;
• a debenture holder or former debenture holder of a company or an affiliated company; or
• a director or former director or officer of a company or an affiliated company.

These are complainants pursuant to Section 212(3) of the Companies Act.

A complainant may apply to the court for leave to bring a derivative action in the name of the company and on behalf of the company for the purpose of prosecuting, defending or discontinuing an action on behalf of the company.

The result of this is that the court may make an order as it deems fit, including:

• authorising the complainant, the Registrar or any other person to control the conduct of the action;
• giving directions for the conduct of the action;
• directing that any amount adjudged payable by a defendant in the action be paid, in whole or in part, directly to former and present shareholders or debenture holders of the company or its subsidiary, instead of to the company or its subsidiary; or
• requiring the company or its subsidiary to pay reasonable legal fees incurred by the complainant in connection with the action.

The harm caused to the company will be remediated including restoring any loss sustained by the company.

Section 213A of the Companies Act makes provision for action to be taken against the directors or officers of the company where it is alleged by a complainant that:

• an act or omission of the company or any of its affiliates effected a result;
• the business or affairs of the company or any of its affiliates are or have been carried on or conducted; or
• the powers of the directors of the company or any of its affiliates are or have been exercised in a manner that unfairly disregards, or is unfairly prejudicial or oppressive to, any shareholder or debenture holder, creditor, director or officer of the company.

Shareholder or member approvals are required in connection with the remuneration, fees or benefits payable to directors. Article 82 of Table A of the Companies Act, 2004 provides that the remuneration of the directors must, from time to time, be determined by the company in general meeting. The remuneration is deemed to accrue from day to day. The directors may also be paid all travelling, hotel and other expenses properly incurred by them in attending and returning from meetings of the directors or any committee of the directors or general meetings of the company, or in connection with the business of the company.

The directors have the power to determine the remuneration of the company secretary and the managing director.

Guided by the Jamaica Stock Exchange Rules and the PSOJ Corporate Governance Code, companies are required to state in their annual report the components of director remuneration including whether a director received or receives additional remuneration from the company apart from director’s fees, or participates in its share option scheme or any performance-related pay or profit sharing scheme or guarantees on termination. 

Shareholder Rights

Shareholders do not participate in the day-to-day management of the company. They own while the directors manage. However, they exercise ultimate control in general meetings. In the period between meetings, however, they have certain rights. These include:

• the right to access financial records;
• the right to access and inspect the financial records; and
• the right to inspect a company’s books and records.

Section 157 of the Companies Act provides that:

• the auditors must make a report to the members on the accounts examined by them, and on every balance sheet, every profit and loss account and all group accounts laid before the company in general meeting during their tenure of office, and the report must contain statements as to the matters mentioned in the Seventh and Eighth Schedules; and
• the auditors’ report must be read before the company in general meeting and must be open to inspection by any member.

Under the Companies Act, shareholders have the right to sue directors and officers of the company for breach of their duties or for acting in a manner that is inimical to or disregards their interests.

Voting Rights and Shareholder Powers

Shareholders also have voting rights. This means that they are able to participate in corporate decision-making, including the right to appoint directors, make proposals and vote for structural changes such as acquisitions or liquidation.

The articles of incorporation usually reserve certain powers to the shareholders to be exercised in general meeting. Shareholders have the right to attend general meetings of the company where the directors present the company’s annual report and comment on its performance over the year. At the annual general meeting and extraordinary general meetings, shareholders may, among other things, elect new directors, discuss directors’ remuneration, and ask questions regarding the company’s future.

Shareholders can also require directors to convene extraordinary general meetings if they are the holders of one tenth of the paid-up capital of the company.

Shareholders also have the right to transfer ownership. They have the option of quickly liquidating shares into cash by selling their shares.

See 5.1 Relationship Between Companies and Shareholders.

Shareholder meetings are required. Section 126 of the Companies Act provides that every company must in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year, and must specify the meeting as such in the notices calling it; and not more than 15 months must elapse between the date of one annual general meeting of a company and that of the next.

The Statutory Meeting and Statutory Report

Section 127 of the Companies Act prescribes that every company limited by shares and every company limited by guarantee and having a share capital must, between one month to three months from the date at which the company is entitled to commence business, hold a general meeting of the members of the company, which must be called “the statutory meeting”. The directors must, at least seven days before the day on which the meeting is held, forward a report (referred to as “the statutory report”) to every member of the company.

The statutory report must be certified by not less than two directors of the company or where there are less than two directors, by the sole director, and must state:

• the total number of shares allotted, distinguishing shares allotted as fully or partly paid up other than in cash, and stating in the case of shares partly paid up the extent to which they are so paid up, and in either case, the consideration for which they have been allotted;
• the total amount of cash received by the company in respect of all the shares allotted;
• an abstract of the receipts of the company and of the payments made thereout, up to a date within seven days of the date of the report, exhibiting under distinctive headings the receipts of the company from shares and debentures and other sources, the payments made thereout, and particulars concerning the balance remaining in hand, and an account or estimate of the preliminary expenses of the company;
• the names, addresses and descriptions of the directors, auditors, if any, managers, if any, and secretary of the company; and
• the particulars of any contract, the modification of which is to be submitted to the meeting for its approval, together with the particulars of the modification or proposed modification.

The directors must deliver to the Registrar a certified copy of the statutory report for registration after the sending of the report to the members of the company. Also, the directors must make a list showing the names, descriptions and addresses of the members of the company, and the number of shares held by them respectively, to be produced at the commencement of the meeting and to remain open and accessible to any member of the company during the continuance of the meeting. Section 127 does not apply to private companies.

Voting at Meetings and Giving Notice

The Act stipulates that the directors of a company, notwithstanding anything in its articles, must, on the requisition of members of the company holding not less than one tenth of the paid-up capital of the company, at the date of the deposit, which carries the right of voting at general meetings of the company – or, in the case of a company not having a share capital, members of the company representing not less than one tenth of the total voting rights of all the members having at that date a right to vote at general meetings of the company – proceed duly to convene an extraordinary general meeting of the company.

The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the registered office of the company. If the directors do not within 21 days from the date of the deposit of the requisition proceed duly to convene a meeting, the requisitionists, or any of them representing more than half of the total voting rights of all of them, may themselves convene a meeting, but any meeting so convened must not be held after the expiry of three months from that date. Also, a meeting convened by the requisitionists must be convened in the same manner, as nearly as possible, as that in which meetings are to be convened by directors. Additionally, in the case of a meeting at which a resolution is to be proposed as a special resolution, notice of the meeting must be given in order for the meeting to be duly convened.

The Companies Act describes the notice that must be given for any shareholder meeting. In the case of the annual general meeting, this is 21 days’ notice in writing and in the case of a meeting other than an annual general meeting or a meeting for the passing of a special resolution, 14 days’ notice in writing, in the case of a company other than an unlimited company; and seven days’ notice in writing in the case of an unlimited company.

A meeting of a company called by a shorter notice period indicated may be deemed to have been duly called if it is so agreed in the case of a meeting called as the annual general meeting, by all the members entitled to attend and vote at the meeting; and in the case of any other meeting, by a majority in number of the members having a right to attend and vote at the meeting, being a majority together holding not less than 95% in value of the shares giving a right to attend and vote at the meeting, or, in the case of a company not having a share capital, together representing not less than 95% of the total voting rights at that meeting of all the members.

Section 129 of the Companies Act requires 21 days’ notice for calling an annual general meeting and 14 days’ notice in writing in the case of a meeting other than an annual general meeting or for the passing of a special resolution.

Section 130 requires that notice of the meeting must be served on every member of the company.

The court may make orders for the calling or conduct of meetings where it is impractical to do so in any manner in which meetings of the company may be called.

See 4.6 Legal Duties of Directors/Officers and 4.9 Other Bases for Claims/Enforcement Against Directors/Officers.

Shareholder disclosures are not required except where those shareholders are directors or senior management. See 6. Corporate Reporting and Other Disclosures.

Section 145 of the Companies Act states that companies are obligated to provide shareholders with an annual report card on the financial position of the company. They must place before the annual general meeting a profit and loss account or an income and expenditure account, a balance sheet with a directors’ report attached, and an auditor’s report.

In accordance with Jamaica Stock Exchange (JSE) Rule 407, public companies are required to submit to the JSE two hard copies and one electronic copy of their quarterly financial statements at intervals not exceeding three months and within 45 days of the end of the period to which the statements relate. Directors, senior management, their connected person shareholdings and the shareholdings of those persons holding ten of the largest block of shares must be included in the financial report.

The quarterly financial statements must be approved by the board of directors and signed by two or more directors of the company, and should state whether or not they are audited or unaudited. Companies with quarterly filings that are 45 days overdue shall have the trading in their shares suspended until the reports are submitted to the stock exchange.

A company that is unable to comply with the JSE quarterly reporting requirement in a timely manner must notify the JSE where it can be foreseen that there is the probability of a delay, and the circumstances and probable extent of the delay. Simultaneously, the company should place an advertisement in the print media advising shareholders of the delay.

Listed companies have the option of submitting their quarterly results as follows:

• fourth-quarter financials be submitted in 45 days (unaudited) and 90 days (audited); or
• audited financial results submitted in 60 days.

Listed companies are required to indicate to the stock exchange and the market which of the two options would be chosen at the beginning of the third quarter each year. However, if there is no change in the option previously chosen, no communication is required.

Rule 414 of the Jamaica Stock Exchange Rules requires listed companies to adopt and disclose corporate governance guidelines. 

The PSOJ recommends that the companies listed on the JSE describe, in their annual report and accounts, their corporate governance from two perspectives: the first dealing generally with their adherence to the Corporate Governance Code’s main principles, and the second dealing specifically with the explanations for non-compliance with any of the Code’s provisions. These descriptions together should provide shareholders with a clear and comprehensive picture of a company’s governance arrangements in relation to the Code as a criterion of good practice.

Every company must deliver to the Registrar successive annual returns which are made up no later than the anniversary date of the incorporation of the company or the anniversary of the last return that was delivered. Each return must be delivered to the Registrar within 28 days after the date on which it is made up.

Every company having a share capital must also deliver to the Registrar a return containing a list of all persons who are members of the company and of all persons who have ceased to be members since the date of the last return or, in the case of the first return, of the incorporation of the company. In respect of the beneficial ownership of a company, or an intended company, a beneficial ownership return must be filed:

• when forming a company;
• upon the delivery of a return of allotments, in respect of each allottee named therein;
• by a company and delivered to the Registrar annually within 28 days after the date on which it is made up; and
• within 14 days after any change of beneficial ownership information that occurs before the next annual filing of the return is due.

A beneficial ownership return must include the following information:

• the date on which it is made up;
• the name of the company, address of the registered office and, in the case of an overseas company, its principal place of business;
• an accurate, adequate and up-to-date list of all persons who, on the date of the return, are members and beneficial owners of the company, and of all persons who have ceased to be members and beneficial owners since the date of the last return or, in the case of the first return, of the incorporation of the company;
• the name, date of birth and nationality, address, occupation, taxpayer registration number or other tax identification number or the number, place of issue and expiry date of the valid passport or driver’s licence of the beneficial owner;
• in the case of a past member or beneficial owner, the last valid passport or driver’s licence held prior to the cessation of membership or ownership of the company, as the case may be;
• in respect of each member who is not an individual, the member’s name, date of establishment, nationality, address and taxpayer registration number, or other tax identification number; and
• in the case of a company having shares, the number of shares held by each of the existing members and beneficial owners at the date of the return, specifying the shares transferred since the date of the last return or, in the case of the first return, of the incorporation of the company by persons who have ceased to be members or beneficial owners, respectively, and the dates of registration of transfers.

The company must appoint an external auditor. The Act stipulates that none of the following persons can qualify for appointment as auditor of a company. These are:

• an officer or servant of the company;
• a person who is a partner of or in the employment of an officer or servant of the company; or
• a body corporate.

Section 154(1) of the Companies Act, 2004 provides that at each annual general meeting, a company must appoint an auditor to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting. The first auditor of a company may be appointed by the directors at any time before the first annual general meeting. An auditor so appointed holds office until the conclusion of that meeting. It is to be noted that the company in general meeting may appoint an auditor if the directors fail to do so.

The auditor of a company has a right to receive notice of every meeting of the shareholders and to attend and be heard at the meeting on matters relating to his duties as auditor. The auditor must make a report to the members on the accounts examined by them, and on every balance sheet, every profit and loss account and all group accounts laid before the company in general meeting during their tenure of office.

The auditor of a company must always have a right of access to the books and accounts and vouchers of the company, and is entitled to request any information and explanation from the officers of the company as is necessary for the performance of his duties.

Guided by the Jamaica Stock Exchange Rules and principles in the PSOJ Corporate Governance Code, the board of directors must ensure the implementation of robust risk management and internal control systems. This includes disclosure in the annual report in a separate segment – Management Discussion and Analysis (MD&A). The MD&A should cover:

• liquidity and capital resources;
• effect of any transactions involving related parties;
• results of operations;
• risk management; and
• present and future prospects of the company.

The MD&A should entail in detail the method by which they have assessed the prospects of the company, over what period they have done so and why they consider that period appropriate. The directors should declare whether they have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the period of assessment. Also, the board of directors must monitor the company’s risk management and internal control system and carry out a review of their effectiveness annually.