New guidelines are now in place for Cayman’s company directors following the issue of the Cayman Islands Directors Association (CIDA) code of professional conduct.
The CIDA was formed earlier this year to promote and maintain professional standards of directors serving on the boards of Cayman Islands companies.
There are currently 120 members of the CIDA. In order to become a CIDA member, applicants are required to be company directors and must either be employed by an entity licensed by the Cayman Islands Monetary Authority or be sponsored by two existing members of the CIDA.
The CIDA Executive Committee comprises Paul Harris (President), Don Seymour (Vice President), Allison Nolan (Secretary), Rex Rankine (Assistant Secretary), Jonathan Nicholson (Treasurer), Garry Wilkins, Victor Murray, David Egglishaw and Peter Anderson.
CIDA members voted to appoint a committee to develop a code of professional conduct at the association’s first Annual General Meeting in May 2008.
After a review of several codes of conduct from various sources, the committee entered into correspondence with the Institute of Directors (IOD) in the United Kingdom. The IOD is a UK-recognised body that defines the conduct of directors in the United Kingdom and several
other jurisdictions.
The IOD has given CIDA permission to base its code on the IOD Code of Professional Conduct for Chartered Directors and to refer to the link provided the CIDA code did not differ materially. The CIDA code is therefore almost identical to the prevailing code for directors in the UK.
The secretary of the IOD, Alan Morkel, summed up the advantages of this alignment: “My view on best corporate governance practice is that it should be widely shared, as there is no point in it, if it does not carry general accord,” he said.
CIDA President Paul Harris said: “I am pleased with the recommendation since members would obviously be comfortable conforming to a code which is so widely recognised in the UK and internationally.”
Following the IOD’s agreement, the CIDA Executive Committee has approved the CIDA Code of Professional Conduct with which all CIDA members must comply.
Mr Harris also noted the importance of the CIDA code being launched following recent failures in the fund sector: ”In view of the state of the world financial markets, there is a possibility that further failures, or at least restructuring, will occur. In such cases additional pressures will no doubt be placed upon the directors of those funds.
“Hopefully the code will play some part in assisting directors to successfully confront the issues they are expected to face in the months to come,” he said.
Asked if the CIDA Code of Professional Conduct would apply to directors who were not members of the CIDA, Mr Harris said that they would not be subject to the code’s provisions. However, he pointed out that most Cayman resident directors involved in the fund industry are already members of the association and he expected that the remainder would probably soon join now that the code is in place.
A copy of the CIDA Code of Professional Conduct is published on the CIDA web site at www.cida2008.com.