The year 2002 was one in which investors in giant companies such as Enron, World Com, Tyco International Ltd and Kmart watched helplessly as their savings for retirement dwindled or in some cases disappeared as a result of corporate greed, malfeasance or downright fraud among CEOs and other executives.
In many instances, top executives used company funds as their personal piggy bank, thereby shattering the dreams, hopes and aspirations of countless trusting shareholders. Although here in the Bahamas there have not been many reported cases of impropriety on the part of top executives, the performance of some of our leading corporations calls for closer scrutiny of financial statements by shareholders.
Numerous are the times when shareholders are not privy to such statements.
On the other hand where statements are provided as required by law, terms like “pro forma accounting” and “special purpose entities” are used so as to confuse or mislead investors and shareholders.
The right of shareholders to access information regarding the affairs of the company is essential if they are to properly discharge their duties and responsibilities.
In this regard, the responsibilities of Directors in law are quite onerous and significant as it is fundamental to the performance of the duties of the Directors in the administration of the company’s affairs that they at all times act in good faith in the conduct of the company’s affairs.
It is because of this that all Directors have a fiduciary responsibility to preserve
the assets of the company and to keep full proper accounting of the company’s business.
To this end an audit of the company’s books or statement of account should be produced for the inspection of all shareholders, officers and directors of the company on an annual basis and copies of these ought to be submitted to the registered office of the company to be retained in its corporate files.
It only takes a few bad apples to spoil the whole lot and it is those ruthless financial executives who tarnish the reputation of the group.
Such behaviour is motivated by greed and displays a callous indifference to the plight of small individuals who are cheated out of their just entitlements.
Dividends like wages is a vital source of income and the words of James have been echoing over the last 1,900-plus years.
“Behold the hire of labourers, who have reaped down your fields which you kept back by fraud.” (James 5:1-4).
Yours, etc.
Clyde F. Phillip
A Letter To The Editor, The Nassau Gaurdian
