Boards put block on CIG’s choices for CIMA directors
Patricia Estwick
(CNS Business): Two people recently appointed by Cabinet to sit on the Cayman Islands Monetary Authority board have been prevented from taking up their seats as a result of objections from the private sector entities where they work, stopping them from accepting the voluntary posts. Of all government’s boards, CIMA, as the regulator of the financial services sector, is one of its most important and is dependent on suitably qualified and experienced individuals from the local financial services sector.
Expressing his disappointment, Financial Services Minister Wayne Panton confirmed that neither Brian Murphy nor Patricia Estwick, candidates he described as “exactly the kind of professionals” government needs on this critical board, would not be able to serve. Estwick is the CFO at Cayman National Corporation and the directors of that board have put a block on her serving as a CIMA director, Panton stated.
This is the second time that Estwick has been prevented from taking up a position with political connections by the bank. She was elected as the chair of the Progressives ahead of the 2013 election but her CNB bosses blocked that appointment as well.
The bank does, however, have a history of allowing its board members to serve in political positions and on government-related boards. Sherri Bodden-Cowan, who has served in the past as a director on the CNB board, not only served on numerous government boards but was also co-chair of the United Democratic Party for a short time, which coincided with her tenure on the bank’s board.
Meanwhile, Murphy, who is the retired CEO of local insurance firm Island Heritage, currently serves as a director on the board of the Cayman based reinsurance firm, Greenlight Re, and the directors of that firm have raised their concerns and objected to his serving on the regulator’s board.
With a number of board directors having stepped down recently because their tenure had ended, government needs to appoint several more new faces to the regulatory board. CIMA is particularly important because the independence of the local regulator and the oversight by a competent board is directly related to areas of compliance with OECD standards.
Government has expressed its concerns on numerous occasions about the wider issue of finding volunteers to serve on the numerous boards, councils and commissions relating to statutory authorities, government companies, regulatory agencies and other oversight bodies.
The Standards in Public Life Bill, which was passed by the Legislative Assembly in 2013, not only calls for board members to reveal their interests but also requires them to have the relevant experience, knowledge and expertise. When the law is finally implemented, finding suitable candidates will get even more difficult. The objections to such service by the private sector employers of individuals asked to assist government raises even bigger problems for the CIG and the need for oversight of its boards by those outside of government.
At present, the much-needed legislation has been stalled because of the new standards of transparency in the law for all those appointed to serve on any a public body. Even though the law was passed two years ago, it has not been implemented because of pressure from the private sector and volunteer board members who have concerns about the disclosure requirements for themselves and family members.
Category: Finance, Financial Services
The Board system is utterly iniquitous, outdated and is really a means of granting improper largesse and influence to political supporters.
Were they not able to see that this would be an obvious conflict of interest? Duh! Well can’t put anything beyond those brilliant people in cabinet.
The new disclosure requirements will have a direct impact on the companies that these directors represent in the private sector. So the companies are right to be wary if their employees sit on the CIMA board. This of course depends on the seniority/position of that staff member. But to state the obvious: one of these intended directors was previously considered for chair of the current ruling political party, suggesting they are at minimum a party loyalist. Maybe that’s not a good idea from a CIMA/independence perspective??
Pat Estwick would have been a perfect person for this board!! smart and knowledgable lady.
These two people should know better. CIMA is a financial regulator and these two individuals are connected with regulated entities. This is a clear conflict of interest as CIMA regulates CNC and Island Heritage, as well as these entities’ competitors.
Good job of the boards of these respective two entities for doing the right thing. Brian and Patricia, if you want to serve on the CIMA board then you must resign your positions with CNC and Island Heritage. And again, if you consider yourself financial professionals, you should know better….
While I have the greatest respect for Ms Estwick, surely such an appointment would never pass the “justice must seen to be done” test if she were allowed to provide ‘direction’ (that is what directors do, right?) to the Board of the entity that regulates the institution that employs her and its competitors.
I suspect that her institution’s board saw this clearly and wanted to avoid the smudge. Sadly, Alden and his cohorts haven’t yet figured out what constitutes a conflict of interest which I why we end up with Gerry Kirkconnell as the Dep Chair of the Port Authority and AL Thompson Jr as the Chair of the Central Planning Authority – just to name two instances.
And there are plenty more – Mr Arch on the Airport Authority board and the Welds et al on the Liquor Licencing board… just to name two more that have been involved in recent controversies.
The same regurgitated individuals on the boards is why nothing changes.
This is because both political parties tend to want to appoint their supporters, there are many qualified Caymanian professionals who can and would serve on these important boards but are never asked because they are not political supporters.
In fact your theory is disproven completely in respect of the Progressives purely by reference to CIMA. The CIMA board was not changed until now even though they are two years into the term of the Progressive Government. There are many other similar examples. The Progressives are nothing like the UDP in a whole range of respects including this one. Look around and you will see a diverse range of qualified Caymanians irrespective of their political persuasion serving on current Gov Boards. Although this is obviously not the view of the UDP, the right test is whether they are doing a good job not whether they will swear undying loyalty.