of the Employer Magazine

of the Employer Magazine
ISSUE I 2013
GOVERNANCE AND LEADERSHIP
TEXT
“Every employee, every manager, every producer,
and every executive impacts the quality of the
service that we provide to our customers. “Pan-American Life Insurance of Trinidad and Tobago
Feature Interview with Marcel Mayer
Employers’ Consultative Association
of Trinidad and Tobago
The Premier Employers’ Representative
CONTENTS
of the Employer Magazine
ISSUE I 2013
GOVERNANCE AND LEADERSHIP
TEXT
“Every employee, every manager, every producer,
and every executive impacts the quality of the
service that we provide to our customers. “Pan-American Life Insurance of Trinidad and Tobago
New Members of the ECA
Employers’ Consultative Association
of Trinidad and Tobago
The Premier Employers’ Representative
Leadership Profiles
Affiliations
Chairman’s Welcome
Corporate Governance: A Definition
GISL and Corporate Governance
Pan American Life of Trinidad and Tobago - Over 100
Years of Success Built on Strong Governance
Management - Dealing with Job Abandonment
ECA - Working for You
5 ways to Boost Your Decision Making Power
Salary Review Season is Coming
New Members
Upcoming Events
Papal Leadership Lessons in Change
Adding Value Not Bureaucracy: The Role of the Audit
Committee
Effective Internal Auditing and Internal Controls for
Good Corporate Governance
What Drives Employees to Work Hard?
Board Members - Keston Nancoo (Chairman), Suzetta Ali (Vice Chairman), Linda M. Besson (Executive Director/Secretary),
Ruben Mc Sween, Martin de Gannes, Neil Derrick, Dexter Charles, Lennon Ballah-Lashley, W.A. Hilton Clarke, Gwendoline
McLaren, Imran Khan, Narendra Kirpalani, Farzan Ali, Russell George, Henley Harewood, Grace Maharaj and Joy Ramlogan.
Publisher: Linda Besson
Editor: Annette Joseph
Layout & Cover Design: Avery Purcell
Editing: Annette Joseph, Avery Purcell
Advertising Sales: ECA Team - Public Relations & Communications Department
Employers’ Consultative Association of Trinidad and Tobago
17 Samaroo Road, Aranguez Roundabout North, Aranguez
Tel: 675-5873, Fax: 675-4866
Email: [email protected], Website: http://www.ecatt.org
Advertisers : - Guardian Holdings Limited, Petroleum Company of Trinidad and Tobago,
Trinidad and Tobago Unit Trust Corporation, Neal and Massy Automotive Limited, National Training Agency, Best Auto Limited
The views expressed by the ECA Voice Magazine are not necessarily those of the ECA. The ECA accepts no responsibility for
the views expressed by contributors nor for errors in contributed articles or advertisements. Reproduction in whole or in part
without written permission is strictly prohibited.
© Employers’ Consultative Association of Trinidad and Tobago – All Rights Reserved.
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Employers’ Consultative Association of Trinidad and Tobago
LEADERSHIP PROFILES
CHAIRMAN
Mr. Keston Nancoo presently serves as the Chairman of the Board of the Employers’
Consultative Association of Trinidad and Tobago (ECA). Mr. Nancoo is the Group Vice
President, Human Resources and Corporate Services at Guardian Holdings Limited
and has over thirty years of experience within the manufacturing sector, both locally
and regionally, in Human Resources especially in the area of Employee Relations,
Industrial Relations, Marketing and Communications. He served for some ten years
as the Branch Secretary of NUGFW, and has been a member of the ECA’s Board of
Directors for over four years.
Mr. Nancoo has a B.Sc. (cum laude) in Business Administration and an MBA in
Marketing from Andrews University in Michigan, USA. His training did not cease at
his MBA but his aspirations and commitment to his career also led him to pursue
additional training at The Chicago Business School and Harvard Business School.
EXECUTIVE DIRECTOR
Mrs. Linda M. Besson, is the Executive Director and Corporate Secretary to the
Board of Directors of the Employers’ Consultative Association of Trinidad and Tobago (ECA) and Executive Secretary to the Caribbean Employers’ Confederation
(CEC) - the Regional Body of Employers Organisations/Associations. Mrs. Besson
has over 30 years’ management experience and has spent more than 18 years
in her current position at the ECA and 14 years at the CEC. Prior to joining the
ECA she worked as a consultant manager to Trinidad Cement Limited Group of
Companies and previously worked at Eastern Credit Union Co-operative Society
Limited as General Manager. Mrs. Besson is adept and experienced at building
and developing organisations. She is very much at home working with people and
at empowering those around her to see the vision she sees and shares.
This has been very well demonstrated in the 15 years she served as Chief
Executive Officer of the Eastern Credit Union. In 1993 Linda Besson was the only
female CEO in the top 50 companies in Trinidad and Tobago. She has an
International MBA and is a member of the Association of Business Executives (ABE). Mrs. Besson has acquired expertise in the development and implementation of Management systems and has projectmanaged programmes. She also has major experience in Administration, Financial and Credit Management,
Business Development, Public Relations and Managing Change.
Her success is demonstrated in the fact that she is responsible for the growth of the ECA from 75 members in
1996 to over 734 members as at August 2013. She also manages a team of 29 persons, including professionals and
support staff and is responsible for the forward looking approach the organisation currently holds. The ECA ranks
as one of the top Business Organisations in Trinidad and Tobago, being the largest in terms of membership, its
service delivery and for its role in Industrial Relations.
As the Executive Secretary/Treasurer of the CEC Linda Besson is responsible for the day-to-day administration of
the Secretariat, for ensuring that the Confederation is represented at all meetings, workshops and seminars to
which it is invited. She coordinates projects and programmes that the regional body may be called upon to carry
out, including those coordinated through CARICOM (PANCAP-HIV/AIDS).
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Employers’ Consultative Association of Trinidad and Tobago
AFFILIATIONS
Caribbean Employers’ Confederation (CEC)
The Caribbean Employers’ Confederation (CEC) is a regional grouping of employers’ organisations in the
Caribbean Region founded in 1960. This organisation is dedicated to the development and promotion of good
industrial relations practices at the enterprize and macro level and is committed to achieving productivity
and prosperity for member countries and the region as a whole. Its office is housed at the Employers’
Consultative Association (ECA), 17 Samaroo Road, Aranguez Roundabout North, Aranguez, Trinidad.
International Labour Organization (ILO)
The International Labour Organization (ILO) was founded in 1919 in the wake of a destruction war, to pursue
a vision based on the premise that universal, lasting peace can be established only if it is based upon decent
treatment of working people. The ILO became the first specialised agency of the UN in 1946. The ILO is the
only “tripartite” United Nations agency in that it brings together representatives of governments , employers
and workers to jointly shape policies and progammes. This unique arrangement gives the ILO an edge in
incorporating “real World” knowledge about employment and work. The ILO is the global body responsible for
the drawing up and overseeing international labour standards. Working with its members states, the ILO seeks to
ensure that labour standards are respected in practice as well as principle. Trinidad and Tobago joined the ILO in
1963 and has ratified 17 conventions to date.
International Labour and Employment
Relations Associations (ILERA)
The International Labour and Employment Relations Association formally The International Industrial Relations
Association was established in 1966 in response to a growing need to develop and exchange knowledge in the
field of industrial relations at the international level, and to provide both the academic and the practitioner with
a forum for discussion and research. Its founding members were the British Universities Industrial Relations
Association, the Industrial Relation Research Association (USA), the International institute for labour Studies
(Geneva, Switzerland) and the Japan Institute of Labour. The Association has over 1,000 members worldwide
including prominent industrial relations scholars and practitioners. Subjects such as globalization, new technology,
gender, HIV/AIDS, employee involvement, occupational safety and health, industrial relations, labour law, human
resource management, international labour standards, social dialogue, labour administration, informal
economy and many other topics are largely discussed during its congress.
International Organisation of Employers
Since its creation in the 1920’s the International Organisation of Employers (IOE) has been recognized as the only
organisation at the international level that represents the interest of business in the labour and social policy
fields. Today, it consists of 146 national employer organisations from 139 countries from all over the world. The
mission of the IOE is to promote and defend the interest of employers in international fora, particularly in the
International Labour Organization (ILO), and to this end works to ensure that international labour and social
policy promotes the viability of enterprizes and creates an environment favourable to enterprize development
and job creation. At the same time it acts as the Secretariat to the Employers’ Groups at the International
Labour Conference, the ILO Governing Body and all other ILO-related meetings. In order to ensure that the
voice of business is heard at the international and national level, the IOE is actively engaged in the creation and
capacity building of representatives organisations of employers, particularly in both the developing world and
those countries in transition to the market economy. The IOE is the permanent liaison body for the exchange
of information, views and experience among employers throughout the world. It acts as the recognized channel
for the communication and promotion of the employer point of view to all the United Nations agencies and
other international organisations.
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Employers’ Consultative Association of Trinidad and Tobago
Chairman’s Welcome
Welcome to another exciting issue of ECA’s Voice of the
Employer Magazine. For 2013 we are taking a new thrust in
the composition of our articles and themes that we explore.
In this issue we address Governance and Leadership: Bridging
the Divide.
For far too often, the disparity between Leadership and Governance has
been far and wide, however these critical factors must go in hand.
More than ever, leaders are called upon to think and act in new ways. The
future needs women and men who are not afraid to travel the road less
taken … the road that requires vision and courage. Ralph Waldo Emerson,
the famous poet and lecturer, stated in a famous quote ‘we should not go
where the path leads, but go instead where there is no path and leave a
trail.’
What this then means is that leaders must position themselves and their
organisations to employ best practises strategies to ensure success.
Organisations must make money or acquire assets but in doing so, it must
be done in the right way through proper processes and structures.
In this issue we will examine the Board as an Audit Committee and look at
two Governance examples in two organisations and much more.
Leadership is no easy task; we know that for sure. As Leaders, we are
human and, as such, we are susceptible to stress and the challenges of our
environment. However the time must be taken to establish proper good
Governance in the organisations we serve.
Enjoy your reading!
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Employers’ Consultative Association of Trinidad and Tobago
Corporate Governance: A Definition
What is Corporate Governance?
Corporate Governance is the system by which companies are directed and managed. It influences how the
objectives of the company are set and achieved, how risk is monitored and assessed, and how performance is
optimised. Good corporate governance structures encourage companies to create value (through
entrepreneurism, innovation, development and exploration) and provide accountability and control systems
commensurate with the risks involved.
How is Good Corporate Governance Achieved?
What constitutes good corporate governance will evolve with the changing circumstances of a company and must
be tailored to meet those circumstances. Best practice must also evolve with developments both in your country
and overseas. There is no single model of good corporate governance.
The Fundamentals
Fundamental to any corporate governance structure is establishing the roles of management and the board with
a balance of skills, experience and independence on the board appropriate to the nature and extent of company
operations. There is a basic need for integrity among those who can influence a company’s strategy and financial
performance, together with responsible and ethical decision-making.
Meeting the information needs of a modern investment community is also paramount in terms of
accountability and attracting capital. Presenting a company’s financial and non-financial position requires processes that
safeguard, both internally and externally, the integrity of company reporting, and provide a timely and balanced
picture of all material matters. The rights of company owners, that is shareholders, need to be clearly recognised
and upheld.
Every business decision has an element of uncertainty and carries a risk that can be managed through
effective oversight and internal control. Keeping pace with the modern risks of business and other aspects of
governance requires formal mechanisms that encourage enhanced board and management effectiveness. Rewards
are also needed to attract the skills required to achieve the performance expected by shareholders. The impact of
company actions and decisions is increasingly diverse and good governance recognises the legitimate interests of
all stakeholders.
Each principle is of equal importance.
A Company Should:
1. Lay solid foundations for management and 6. Respect the rights of shareholders
oversight. Recognise and publish the respective roles Respect the rights of shareholders and facilitate the
effective exercise of those rights.
and responsibilities of the Board and Management.
7. Recognise and manage risk
2. Structure the board to add value
Have a board of an effective composition, size Establish a sound system of risk oversight and
and commitment to adequately discharge its management and internal control.
responsibilities and duties.
8. Encourage enhanced performance
3. Promote ethical and responsible decision-making Fairly review and actively encourage enhanced board
Actively promote ethical and responsible decision- and management effectiveness.
making.
9. Remunerate fairly and responsibly
Ensure that the level and composition of remuneration
4. Safeguard integrity in financial reporting
Have a structure to independently verify and safeguard is sufficient and reasonable and that its relationship to
corporate and individual performance is defined.
the integrity of the company’s financial reporting.
10. Recognise the legitimate interests of stakeholders
5. Make timely and balanced disclosure
Promote timely and balanced disclosure of all material Recognise legal and other obligations to all legitimate
stakeholders.
matters concerning the company internal control.
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Employers’ Consultative Association of Trinidad and Tobago
GISL Corporate Governance Concept
Corporate governance as defined in the Cadbury Report 1992, speaks to a
system by which companies/organizations are directed, controlled and
brought to account for their stewardship. Such a system is a requirement in
all organisations and facilitated through:
•
Clear identification, articulation, and definitions of roles and
responsibilities;
•
An understanding of the relationship with the organization’s stakeholders and those entrusted to manage resources and provide outcomes;
•
Support from top management.
Fundamentally speaking, good corporate governance ensures a level of
confidence in the operations of any company. The presence of an active
group of directors on the Board contributes significantly to the level of
confidence that a company commands in the public domain.
At the Government Information Services Limited (GISL), such levels of confidence are evident in the culture of
the organization which lends itself easily to openness through the provision of information in the public domain.
GISL strives to uphold that confidence by making the internal processes for decision making or decisions made
available whenever requested. This concept of transparency provides stakeholders with adequate knowledge on
how the organization is managed.
As with all State Enterprises, GISL derives its funding from public funds, and therefore relies heavily on the
monitoring and control mechanisms developed by the Ministry of Finance in its capacity as Corporation Sole,
such mechanisms allow the company to account to its Board, its Line Minister and the Ministry of Finance,
on the systems and processes developed to utilise subventions it receives to advance its mandate to deliver
government information. One such mechanism is the Project Management Protocol developed by the
government for adaptation by the management of some State Enterprises with specific mandates. This protocol
provides the basic principles of corporate governance that are required in the area of accountability and involves
the relationship between stakeholders and those entrusted with the resources to deliver the outcomes from the
organization as well as providing clarity to the roles, relationships and responsibilities of the Minister, the CEO
and the Board.
The Companies Act 1995 sets out the duties and responsibilities of a Board. They are in a general sense the
management of the business and affairs of a company. It is the responsibility of the Board not to extend into
the operational functioning of the organisation or to usurp the responsibilities of executive management by
involving itself in day to day functioning of the organization. Generally speaking it is an organ of review, appraisal
and appeal.
The Board of Directors at GISL performs a specific set of functions. These are directed to meet the mission of the
Company. The Board ensures that policies and business decisions taken at the Board level are implemented.
It is the responsibility of the Chief Executive Officer to operationalize the strategic direction of the company. The
CEO’s role is a significant one, as he operates not only in capacity of management but also as a member of the
Board providing critical information that can impact on the leadership of the company.
Corporate Governance is about providing strategic direction to ensure that relevant structures and processes are
put into place to effectively manage the delivery of overall corporate objectives. It not only includes legal, and
financial compliance but mechanisms that would prevent improper or unlawful behavior.
The Core Values of the organization such as Integrity, Leadership, Service, Innovation, and Respect are the pillars
which govern strategic decision-making at GISL.
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Employers’ Consultative Association of Trinidad and Tobago
OVER 100 YEARS OF SUCCESS BUILT
ON STRONG CORPORATE GOVERNANCE
Pan-American Life Insurance Company of Trinidad & Tobago is a
member of the Pan-American Life Insurance Group, a leading provider of
insurance and financial services throughout the Americas. The Group’s
flagship company, Pan-American Life Insurance Company was founded in
New Orleans, Louisiana in 1911 and since then has been guided by stability,
innovation and an experienced management team, earning it a track record
as a one of the most financially sound insurance companies in the industry.
At the core of our longevity is a deep commitment to our strategic focus
on life and health insurance and our geographic focus on the Americas.
Our expansion into the Caribbean has not only increased the Group’s
international footprint but it has also allowed us to offer individuals and
business in the region, the benefit of our more than 100 years of experience.
Our corporate governance structure is a clear product of that experience. For Pan-American Life,
corporate governance is an integral part of how we run our business and it starts with making sure that the
corporate governance structure is in line with our mission and corporate values. We work hard to offer our
policyholders financial security and peace of mind and in order to do that, it is important that everyone
throughout the organization understands their role. Every employee, every manager, every producer, and
every executive can impact the quality of the service that we provide to our customers.
One of the key tools in our corporate governance strategy is our corporate code of conduct. This
document provides a uniform set of principles for how we conduct business, perform our jobs and
maintain the trust of our customers. The Code of Conduct is designed to deter wrongdoing through a number
of areas, including the promotion of honest and ethical conduct; avoidance of conflicts of interest; full, fair,
accurate and understandable disclosure in reports and other public communications made by the Company.
With the Code of Conduct as its foundation, our corporate governance structure is geared to make
sure that all functions and responsibilities within the organization, and within each individual area, are
clearly defined. This is especially important because it means that everyone involved with the company
is aware of who they support and who provides support to them. That platform is what allows us to work
together effectively and deliver on our commitment to providing the best possible solutions to our customers.
At both the Group level, and here in Trinidad & Tobago, our Boards of Directors also play an
important part in establishing the corporate policies that we use to oversee our everyday operations. The
collaboration between management and the board ensures that the company is guided by integrity in its
business decision making and that all of those decisions are consistent with our service centric corporate philosophy.
Pan-American Life’s international presence, our diversified distribution and focused product strategy,
our disciplined risk management and our financial strength which includes a strong balance sheet, solid
capital generation and stellar ratings, are all reflections on the quality of our corporate governance structure.
The company is known to operate in an honest and ethical manner and that reputation instills
confidence in our partners and our policyholders. It is what makes us people you can trust for life.
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Employers’ Consultative Association of Trinidad and Tobago
Management:
Dealing with Job Abandonment
Job Abandonment is one way in which the employment contract can
come to an end. It occurs where the employee overstays an approved
leave of absence, or absents himself from work without proper
justification for a period of time.
The Industrial Court, in several of its judgments, has stated
“Abandonment is a matter of intention and this intention can only
be gathered or inferred from the conduct of the person intending to
abandon the job. The presence or absence of intent to remain away
permanently can be inferred from circumstances surrounding the
absence of the employee.”
The court has also highlighted certain factors that should be considered before determining that the worker
intended to abandon the job. Such factors include:1. Length of the absence;
2. Whether the worker kept in contact with the employer during the absence;
3. Whether the worker refused or failed to return on being directed to do so by the employer, and
4. Whether the employer warned the worker that failure to return by a fixed date would result in dismissal.
Generally, most Companies have a policy relating to the issue of Job Abandonment. Such a policy typically states
that if the worker is absent for three or more days, he will be considered to have abandoned his job. It should be
noted that the mere absence of the worker from the workplace will not necessarily prove abandonment of the job.
Where the Company has not heard from or seen the worker for a period of time, there is a procedure that must be
followed before the Company can truly state that the worker has abandoned his job.
The procedure is as follows:1. When an employee is absent from work, the employer should make reasonable efforts to contact the employee
to ascertain the reasons for his or her absence. This can be done by contacting the employee at the telephone
numbers listed on his personnel file or at any other known telephone numbers that the Company is aware that the
employee possesses.
2. If there is no legitimate excuse for the absence or contact cannot be made with the employee, the employer
must then write to the employee. This letter should notify the employee of his absence, direct him to report for
work on a specific date, and also put him on notice that his failure to attend work on or before the date stated in
the letter, would result in the Company determining that he has abandoned the job. The letter should then be sent
via registered mail at the last known address of the employee.
3. Should the employee fail to report for duties by the date stipulated in the letter, the employer must send a
final letter informing the employee of his failure to report for duties on the requested date and stating that the
Company has determined that the employee has abandoned the job. This letter should also be sent via registered
mail.
It should be noted that in instances of perceived Job Abandonment, that the onus is on the employer to
communicate with the absent employee.
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Employers’ Consultative Association of Trinidad and Tobago
ECA... Your Association Working for You
ECA signs Memorandum of Understanding with the Ministry of
Tertiary Education and Skills Training
The signing which took place at the Ministry’s Head Office in Port of Spain will also provide an advantage to
job seekers in this country. The signing of a Memorandum of Understanding took place between the Ministry,
the Employers’ Consultative Association of Trinidad and Tobago,(ECA), the Trinidad and Tobago Local Content
Chamber and the Trinidad and Tobago Manufacturers Association (TTMA).
Employers engaged at the Role of Labour Standards in Accessing the International Markets &
Supporting the Caribbean Single Market Workshop Hosted by the ECA and the ILO
The ECA recently partnered with the International Labour Organization (ILO) to inform and prepare employers
in Trinidad and Tobago for the introduction of the Caribbean Single Market Trade Agreement which takes effect
on January 1st, 2014. The session was held on July 4th, 2013 at the Kapok Hotel and Conference Centre and
dealt mainly with the Labour Standards which employers are required to have in place before the Agreement
takes effect. In addition the session covered the effects and conditions which are mandatory for business to
Qualify under the new agreement.
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Employers’ Consultative Association of Trinidad and Tobago
5 Ways to Boost Your
Decision-Making Power
By Ed Powers
Often entrepreneurs feel ready to take their company to “the next level,” but aren’t sure how to make it happen.
The good news is that there are a few things you can do to make life a bit less lonely at the top, and to give yourself
the smarts and inspiration to push onward.
Access expertise: You may know perfectly well how to run your company, but if you step back for a moment
you’ll probably see that there’s one thing (okay, maybe a couple of things) that you do better than anyone
else. And there’s probably something you could do a little better. After accepting this moment of transcendent
self-awareness, go get that expertise. This may mean reaching out to a consultant or simply someone you admire
who is good at what you aren’t. Don’t sweat how formal or informal your approach might be.
Grow your network: Many owners are looking to raise growth capital. Look for business organizations that can be
helpful, such as industry associations or your local chamber of commerce. Often, these organizations link up with
companies that could be a supplier, a potential customer or someone you can work with in some way. But they also
often enable entrepreneurs and CEOs to open up about the challenges they face, and to identify new solutions.
Networking with other similarly-situated CEOs can only help.
Be strategic: Most days, company owners are busy simply running their businesses. Few owners get to step back
and think strategically. They just don’t allocate the time to it. Strategic planning also can devolve quickly into
budgeting sessions or other mundane issues. Step back and take a day (or more) and think about what your
business could be. What is the opportunity you should really be pursuing?
Discipline yourself: Some of us can get up in the morning and say, “I’m going to get this done today.” Others need
someone looking over their shoulders. One benefit of having a board, informal or formal, is that you can use them
to add more discipline to your business. If you have to report out to your advisors, you are going to need to tell
them what you have accomplished!
Prepare for the sale: Eventually you aren’t going to own your business--either you or it is going to pass away, or
you are going to transfer or sell it to someone else. Reporting out to advisors or a board on a regular basis is one
of the best ways to prepare your business for the transfer process, because the questions your advisors or board
will ask are probably not that different than the questions a potential buyer would ask.
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Employers’ Consultative Association of Trinidad and Tobago
Salary Review Season Is Coming.
Who’s Getting a Raise?Ryan Himmel
Pay and recognition are two of the most important factors that impact employee morale, performance and
growth. If your business isn’t keeping up with market trends, you can run the risk of losing talented employees and
turning away top prospects. A recent report by World at Work indicated that workers on average will receive a
3.1% pay raise in 2014 as compared to 2.9% in 2013. The results of this survey are just an example of one of the
many factors that employers should consider when determining employee raises for the upcoming year. Let’s look
at a few others.
1. The company’s overall performance and budget
Most well-managed businesses actively optimize their company budget for the upcoming year according to
current and expected growth. Depending on the business, a large or small portion of the gross profit will be
allocated to salaries for the upcoming year. Typically, the larger the overall company growth rate, the greater the
percentage of salary increases, with all other expenses being relatively equal.
For instance, if your company grew gross profit dollars 12% year over year, a mid to high single-digit average salary
increase will likely be feasible, while still generating positive cash flow.
Now, how you allocate the salaries according to divisions within the company will likely also be based on each
group’s performance. This may be difficult for divisions that are cost centers such as accounting and product
development as they don’t directly contribute to growth or bottom-line improvements. To solve this problem, it’s
best to apply a methodology for allocating salaries across divisions within the company. We’ll cover this in a bit.
It’s also important to acknowledge that overall budgets are subject to changes as employee evaluations and other
factors may warrant it.
2. The employee’s contributions to the firm
Once you’ve set a company budget, you’ll need to review each employee’s performance. Theoretically, the
employee should have set a list of goals and objectives for the year that will be very useful for evaluating
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Employers’ Consultative Association of Trinidad and Tobago
performance. I would encourage companies to rank their employees and set ratings such as below-average,
average, above-average and exceptional. Rankings and ratings are helpful in distinguishing between employees
and defining various levels of employee contributions for the year. For instance, a company that grew gross profit
12% may incorporate salary increases in increments of 0%, 3%, 6% and 9% in accordance with each employee’s
rating.
3. Competitor salaries
If you are assessing salaries in relation to only company specific factors, you’re bound to lose employees to
competitors. Be cognizant that most employees are always comparing their salary to what else is offered in the
marketplace. You may not know the exact raises and salaries your competitors give their employees, but you
should have an idea. Use industry checks and sources to assess competitor company performance and salaries. You
can utilize that data to adjust your company’s salary increments and potentially award top performers a greater
raise than the competition. If you can’t offer salaries that are at or exceed your competition, then there may be
other options such as providing better employee benefits and work-life balance programs than competitors.
4. Macro-economic factors
Most employees are aware of both local and national economic conditions. For instance, a depressed economy
with muted growth can certainly factor into employee expectations as it’s likely that most will understand when
little to no raises are provided during that period. Still, cost-of-living changes need to be incorporated in your
company’s compensation model. If salaries aren’t increasing while average rents are at a high rate, you can rest
assured that many employees will begin considering other employment opportunities. In the end, it’s important
to have an understanding of all of these factors when determining salaries and raises. For almost all companies,
employees are the engine that drives growth, so you should make sure you keep them happy.
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Employers’ Consultative Association of Trinidad and Tobago
New Members of the ECA
The Employers’ Consultative Association of Trinidad and Tobago acknowledges the following companies that were
admitted into the membership for the period January to June 2013. The ECA welcomes you and looks forward to
serving you with excellence!
Venwell International Inc
B’s Homemade Ice-cream
Lab Medica Services Limited/ HealthNet Caribbean
Shipping Solutions and Services Limited
Bridge Control Services Limited
Southern Sales and Services Company Limited
Worley Parson Trinidad Limited
Cosmo Energy Cooling Limited
Advanced Cardiovascular institute
Restaurant Concepts Limited
Gittens Engine Sales and Services Company Limited
Climate Control Limited
General Finance Corporation Limited
Shazam Enterprises and Investments Limited
Reesal Industries Limited
First Guard Security Group Limited
Perfection Services Limited
Upcoming Events
September, 2013
ECA - Breakfast MeetingESC - The Progressive Forms Of Discipline
ESC - Principles And Practices Of Good Industrial Relations
ESC - Injury Benefits Claims And NIS
ESC - Character Defamation: The Use Of ESC - Social Media Outside The Workplace
ESC - The Master Class Series
ESC - Misconduct Outside The Workplace
ESC- Emotional Intelligence
October, 2013
ECA/ESC Conference 2013
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Employers’ Consultative Association of Trinidad and Tobago
PAPAL LEADERSHIP
LESSONS IN CHANGE
By Martin de Gannes, ECA Board Member
It is interesting to observe that a new Pope of the Catholic Church has been elected, very smoothly and calmly.
There have been no upheavals, no bacchanalia, no mis-speaking, no misgivings, no mis-steps. There are leadership
and management lessons to be learnt from this event which need to be shared.
The First Leadership Lesson has to do with Pope Benedict. He took the decision to step down from the most
powerful office in the Catholic Church, as he felt he no longer had the physical/mental energy to properly perform
his function. That is a leader. He knew when to step down, as he could not fully and effectively perform his role;
he removed himself from such a powerful office; he put the office and the organization above any personal desire
for continuity and power. Oh how our leaders in all walks of life can learn from this!
The Second Leadership Lesson is that he walked away quietly, and the announcement of his departure was almost
unexpected, and kept extremely confidential until it was released. There were no months of speculation, negative
comments in the press and the usual bacchanalia.
The Third Leadership Lesson is that the church as an organization had a clear and well defined process to elect
a new Pope. This process went into quick gear, once the announcement was made. There was no scurrying
around, wondering what to do, “who we go put”, as we usually observe when leaders change in other walks of life.
Perhaps, most importantly was the transparency of the change process. The church shared with the whole world
the process and timelines for selecting a new Pope, and stuck to those timelines. Talk about a “results” focus.
The Fourth Leadership Lesson, as to be expected, speculation began in the world press as to who would be the
front runners to replace the Pope. Yet, not one person from the College of Cardinals gave any indication as to
whom the most likely successor would be. This is Corporate Discipline at its best. So often, we have so-called
leaders coming out of Board Meetings and even Cabinet Meetings, and talking about what was discussed during
the meeting.
The Fifth Leadership Lesson is that, there was no shortage of well-prepared candidates to step into the position.
Leadership Planning and Preparation at its best. How many organizations can claim to have a pool of well prepared
candidates to take over as CEO.
The Sixth Leadership Lesson, once the new Pope Francis was announced, there was no public bitterness by any of
the other contenders for the position. Fullest support for the new Pope from all colleagues - “teamness” of the
highest order.
The Seventh Leadership Lesson, once the new Pope was elected, there was immediate communication to the
public. No delays, no speculation, just clear and instant communication, once the decision was made. The white
puff of smoke was followed with an announcement of the successful candidate approximately one hour later.
The Eighth Leadership Lesson, the College of Cardinals had one goal, a singular purpose – to elect a new Pope
behind closed doors. There was a clear focus on the goal by each Cardinal, and an understanding by all, that none
could leave the room until the task at hand was achieved – that is, elect a new Pope. This was not about meeting
to ole talk, with no result in mind – as we have become accustomed to in Trinidad and Tobago. There was a clear
commitment to action and achieving the goal, and this was done.
These are some of the Leadership and Management Lessons to be learnt from the election of the new Pope and
no doubt there are many others.
This is a strong and viable example of the – change process that should be considered in similar circumstances.
20
Employers’ Consultative Association of Trinidad and Tobago
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We Make It Our Business to Improve Yours
Adding Value Not Bureaucracy:
The Role of the Audit Committee
By Je-Anne Borneo, VP-Professional Services
Institute of Internal Auditors Trinidad and Tobago Chapter
The Internal Auditor is often described as the organization’s critical friend - the
independent advisor who can challenge current practice, champion best practice and
be a catalyst for improvement, with the objective of ensuring that the organization as
a whole can achieve its strategic objectives. Arguments associated with the promotion of audit committees are premised on their potential for alleviating weaknesses in
corporate governance.
The New York Stock Exchange (NYSE) along with the National Association of Securities Dealers (NASD) sponsored
the Blue Ribbon Committee (BRC) research on Improving the Effectiveness of Corporate Audit Committees. The
BRC report includes recommendations aimed at strengthening director independence and qualification and
highlights the role of the internal auditor in assisting audit committees, and in turn the board, in the corporate
governance process. With the internal audit function’s direct reporting line to the audit committee, it allows the
internal auditor to remain structurally separate from management and enhances objectivity.
The Institute of Internal Auditors (IIA) defines internal auditing as, “an independent, objective assurance and
consulting activity designed to add value and improve an organization’s operations. It helps an organization
accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness
of risk management, control, and governance processes”. According to this definition, it is implicit that the audit
committee which has oversight of the internal audit function is not in the business of being inflexible but is focused
on adding value to the organization through collaborative efforts to improve business and governance processes.
Bridging the Gaps
The audit committee – a subcommittee of the board, acting under delegated authority – provides key links
between management, internal auditor and the external auditor. It can ease pressure on a busy board
because it can take time to address financial reporting and internal control issues. It also assists by providing a
primary focus for discussions with internal and external auditors as it enables both sets of auditors to boost their
independence. It is important for the Audit Committee to have good relationships and communication with those it seeks
briefings from, and to those it provides assurance. This means that the Committee must have appropriate
business knowledge and the means through which to fulfil its function. The effectiveness of internal audit, external audit, the finance function, and the Audit Committee is increased when the parties work in partnership,
providing a highly sound corporate governance framework.
The Audit Committee’s Role
The organization and its shareholders rely on the Audit Committee’s judgment to appropriately oversee areas such
as risk, compliance, financial reporting, and corporate resources. Committee members should have a strong grasp
of key financial reporting and accounting issues, industry knowledge and internal controls.
The key role of the Audit Committee is to scrutinise and advise on financial and corporate governance issues. The
membership of the Committee must therefore be able to scrutinise the financial reporting framework so as to
enhance accountability and add value. Therefore the composition of the Committee is also important.
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Employers’ Consultative Association of Trinidad and Tobago
According to the IIA (iia.org) the key issues of concern for the audit committee are:
•
Financial Accuracy
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Risk Management
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Control Assessment
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External Auditor Oversight
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Effective Use of Internal Auditing
It is important that the audit committee adds value to the enterprise risk management (ERM) process as ERM
supports value creation by enabling management to:
•
Deal effectively with potential future events that create uncertainty.
•
Respond in a manner that reduces the likelihood of downside outcomes and increases the upside
•
Helps ensure effective reporting and compliance with laws and regulations and helps prevent losses —
whether in the form of revenues or reputation
Who should sit on the Committee?
Transparency and independence are significant to the role of the Audit Committee. It should ideally comprise
persons independent of the company i.e. persons who do not have a financial obligation to the success of the
company, but persons who are interested in ensuring that the success of the business is predicated on sound
internal controls inclusive of policies that would allow for just business practices that would advance the business.
Key Responsibilities
According to Deloitte’s Centre for Corporate Governance, the key responsibilities of the Audit Committee Include:
•
•
•
•
•
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Having an effective relationship with management, the internal auditors, and the independent auditor.
Taking a ‘risk intelligent’ governance approach.
Overseeing the establishment of appropriate controls and antifraud programs.
Overseeing dissemination of earnings, press releases, financial information and earnings guidance.
Monitoring a robust code of ethics.
Establishing a process for investigations, especially those against senior management.
Adding Value
In addition to the roles and responsibilities highlighted above there are other ways in which the audit committee
adds value:
1.
Encouraging good communication
Good, open relationships between the Audit Committee, Finance Director, and Internal and External Auditors are
also essential to adding value to the organisation. There are a number of ways that this is done for example;
•
The profile of the Audit Committee usually supports and adds weight to audit investigations;
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The Committee promotes audit enquiries internally with the relevant directors to make sure they know
the purpose of the audits;
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The Committee holds the organisation to account for the implementation of all audit recommendations
(internal and external); and
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It meets with appropriate business heads to discuss how they are delivering their agreed actions and/or
on risks for which they are responsible.
2.
Relations with others
The Audit Committee can assist the Accounting Officer with the Governance Statement by producing an Audit
Committee Annual Report outlining activities, issues and recommendations for the year. An Annual Report can
also help the Accounting Officer to better understand the role and remit of the Committee, significant areas of
business risk in the organisation, and the value that the Committee adds to the organisation.
3.
Adding value to the overall organisation
As well as providing assurance within the governance and accountability structures of the organisation, it is
essential that the Audit Committee is seen to contribute, deliver results and add value to the organisation by
having regular Committee meetings or by making available to management the expertise of the members of the
Committee.
Undoubtedly, the Audit Committee is essential to ensuring that organisations function according to good
governance, accounting and auditing standards, and adopt appropriate risk management arrangements. A sound
Audit Committee that comprises members with the right skills and experience will contribute to the overall
success of the company and more specifically to healthier corporate governance practices.
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Employers’ Consultative Association of Trinidad and Tobago
Effective Internal Auditing and
Internal Controls for Good Corporate
Governance
By Claire Gomez Miller CIA, CRMA, FCCA
The facets of internal auditing are many – the eyes and ears of the organization; the watchdog for integrity,
compliance, effectiveness and efficiency; the conscience of the organization; a deterrent to fraud and wrongdoing;
the keeper of ethics and professional standards. Modern internal auditing has made internal auditors experts in
risk management, controls and governance.
Internal auditors are in effect staff of the board of directors and a cornerstone of corporate governance,
assisting the organization in controlling risks, achieving its vision and objectives, and building the right Tone at the
Top. They are present as advisors when risk controls are being designed; they provide assurance of effective risk
management and controls; they are there to investigate control breakdowns when significant risks materialise;
and throughout their activities, they provide recommendations for continuous improvement and effective risk
controls and governance processes.
As a global profession, internal auditing is governed by mandatory standards and code of ethics and conduct that
are set by The Institute of Internal Auditors (IIA). The IIA is an international professional association with global
headquarters in Florida, USA. Established in 1941, it is believed to be the genesis of modern internal auditing,
transforming a very ancient profession into what it is today. Globally, the IIA has more than 180,000 members.
The IIA in North America comprises 160 chapters that include Trinidad and Tobago and other Caribbean countries
- Aruba, Bahamas, Barbados, Cayman Islands, Curacao, Jamaica, Puerto Rico, and Turks & Caicos, Bermuda, and
Guyana.
Under its professional standards, Internal Audit must assist the organization in maintaining effective controls
by evaluating their effectiveness and efficiency and by promoting continuous improvement. Internal Auditors
must also evaluate the adequacy and effectiveness of controls in responding to risks within the organization’s
governance, operations, and information systems regarding the:
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Achievement of the organization’s strategic objectives
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Reliability and integrity of financial & operational information;
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Effectiveness and efficiency of operations;
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Safeguarding of assets; and
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Compliance with laws, regulations, and contracts.
Given its modern day roles and responsibilities, an effective internal audit function is the bridge between
governance, leadership and operations of any organization, providing independent and objective
assurance and advisory services to both board and management. An effective internal audit function also provides
assurance to all stakeholders including shareholders, of the organization’s strong corporate governance and social
responsibility.
To be effective, internal auditors must be, and must be seen to be, competent, knowledgeable, ethical,
independent, objective and compliant with professional standards. Internal Audit’s focus must always be 100%
on Controls, Risk and Governance; it must forever live its definition. The IIA defines internal auditing as “an
independent, objective assurance and consulting activity designed to add value and improve an organization’s
operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to
evaluate and improve the effectiveness of risk management, control, and governance processes.”
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Employers’ Consultative Association of Trinidad and Tobago
Boards of directors and executive management must ensure that an effective internal audit function is
established and maintained within their organizations. It must be sufficient, suitable, compliant and ethical;
properly resourced and its independence preserved by the Board.
A typical audit team comprises a senior auditor and two staff auditors under the direction of a chief audit
executive; this should be seen as the minimum staffing. For large organizations, the number of audit teams will
be based on the organization’s risk profile, complexities, regulatory framework, business locations, sales and
transaction volumes.
Small organizations that cannot afford an audit team should at minimum have an independent chief audit
executive, reporting functionally to the board and administratively to the chief executive officer, and
responsible for co/outsourcing internal audit activities. Chief audit executive describes a person in a senior position
responsible for effectively managing the internal audit function in accordance with the internal audit charter and
the Definition of Internal Auditing, the Code of Ethics, and the Standards. Such a person is not responsible for any
of the operations of the company.
Internal audits must be performed with proficiency and due professional care. Internal auditors, being
knowledge workers, must collectively possess the knowledge, skills, and other competencies needed to perform their
individual responsibilities. They must also have sufficient knowledge to evaluate fraud and key information
technology risks and their controls. Professional certifications and qualifications are encouraged as they
demonstrate the internal auditors’ proficiency. The premier certification for internal auditing is the IIA’s global
Certified Internal Auditor professional designation. The IIA also provides specialised certification in Government
Auditing, Financial Auditing, and Risk Management Assurance.
The nature of the organization guides the relevant expertise that the internal auditor must also bring to the
function. It is therefore not surprising to find within a modern internal audit function multi-disciplined auditors
with professional qualifications in accounting, finance, engineering, quality, law, safety, environment, security,
information technology, human resource and even medicine.
Internal auditors must be compliant with the International Standards for Professional Practice of Internal Auditing.
The Standards mandates a quality assurance and continuous improvement program that must be developed and
maintained by the Chief Audit Executive to ensure the internal audit function remains effective and compliant.
Every five years, the internal audit function must subject itself to an independent assessment of its compliance,
practices and effectiveness.
One of the biggest risks to the effectiveness of the internal audit function is its independence and objectivity.
The internal audit function must be independent, and internal auditors must be objective in performing their
work. This is so important, that the Standards require that the chief audit executive confirm to the board, at least
annually, the organizational independence of the internal audit function. The board preserves the independence
of internal audit when internal audit reports functionally to the board and the board.
.
•
Approves the internal audit charter;
•
Approves the risk based internal audit plan;
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Approves the internal audit budget and resource plan;
•
Receives communications from the chief audit executive on the internal audit activity’s performance
relative to its plan and other matters;
•
Approves decisions regarding the appointment and removal of the chief audit executive;
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Approves the remuneration of the chief audit executive; and
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Makes appropriate inquiries of management and the chief audit executive to determine whether there are inappropriate scope or resource limitations.
•
Ensures the internal audit function is free from interference in determining the scope of internal
auditing, performing work, and communicating results.
•
The chief audit executive communicates and interacts directly with the board.
25
Employers’ Consultative Association of Trinidad and Tobago
What Drives Employees to Work Hard?
By Em Maier
Many assume that passionate employees accept less money because they love
their jobs, but a new study indicates that they end up earning more.
Workers who are passionate about their jobs don’t care as much about money. They’ll come early and stay late,
without expecting overtime pay. Right? That’s one theory. But it may not be true. For decades, labor economists
have argued about what motivates workers--and how that affects compensation.
In one corner are those who support the “donating” theory. Workers who love what they do are more willing to
accept lower wages, the academics argue, because they’re getting satisfaction through the environment. They’ll
come early and stay late, without expecting overtime pay.In the other corner are the proponents of “motivationproductivity.” They argue that an engaged employee works harder at his or her job, increasing work output and
simultaneously garnering higher wages.
In a study published in August’s Small Business Economics, a group of Italian economists sought to clarify which
of these two theories is more accurate. The authors focused on 4,134 paid workers from 320 Italian non-profits,
noting that non-profit wages are frequently lower than in other industries. It seemed more likely these workers
would be driven by passion than money. Individuals were asked to rate their identification with a definition of
work: as a mere contractual relationship where labor is exchanged for pay. Those who agreed completely with this
statement--in effect, those who were working just to get paid--in some cases earned as much as 5 percent less
than average.
Intrinsic motivations do have an effect on wages, the study found. Those who are willing to work for nothing actually tend to earn more than people who are in it for the money.Why might this be? In part, these employees tend
to be more productive, putting in more overtime hours, which compensates for the donated work. While the effect
on pay was limited (amounting to about 1% of total wages), their results suggested that intrinsic motivation creates extra productivity, leading to higher pay.
Additionally, the researchers suggested that having personal goals closely aligned to that of the company’s is correlated with significant gains in productivity, and can be correlated to commitment and loyalty.
So what’s the takeaway for employers? Make sure your employees care about their work, and their increased
productivity will pay for itself.
26
Employers’ Consultative Association of Trinidad and Tobago
From Exploration and Production
to Refining and Marketing
Energy Based,
People Powered
Petroleum Company of Trinidad and Tobago Limited (Petrotrin),
the integrated, national oil and gas company of Trinidad and
Tobago, has a rich and diverse history of operations, incorporating Exploration and Production and Refining and Marketing
operations that are more than a century old.
The company has within its portfolio a large complement of
legacy assets and plants initially developed and installed by a
variety of major multinationals as well as several new plants and
projects that it has deployed in its thrust to retain its competitive
advantage.
In 2013 January, the company celebrated its twentieth
(20th) anniversary of incorporation as Petrotrin, and continues
in its pursuit to deliver superior results through safe and
responsible operations in the areas of Exploration and Production and Refining and Marketing.
Petrotrin continues to be an attractive investment destination for parties seeking business opportunities in the following
areas:
Onshore and offshore exploration and production
Refinery upgrade
Environmental management
•
•
•
PETROLEUM COMPANY OF TRINIDAD & TOBAGO LIMITED
www.petrotrin.com