Barbados’ history of success in the global business arena is no secret. For decades, the island has been revered by investors and partners for its well-established legal system, robust regulatory framework, expansive treaty network, and its commitment to international best practice standards across all areas of its global business sector. In the face of unprecedented challenges, Barbados continues to refine and redefine what it means to be the premier global business hub in the Eastern Caribbean.

In 2023, the Financial Services Commission (FSC) issued a Corporate Governance Guideline aimed at cultivating a business environment within the non-bank financial sector that is rooted in accountability, transparency and trust. By aligning these comprehensive requirements and recommendations with those established by the OECD and the Basel Committee on Banking Supervision, Barbados stands on an equal footing with internationally recognised standards, and demonstrates to foreign investors and multinationals that its financial services sector is committed to the highest standard of ethical, transparent and sustainable business practices.

The FSC’s Guideline at a glance

At the core of the FSC’s Guideline is a strong sense that financial institutions must not only be regulated, but empowered to thrive in global spaces. Central to the Guideline is the critical role which the board has to play in promoting the long-term stability of any financial institution. Boards are tasked with setting strategic direction, overseeing executive management, managing risks and protecting shareholders’ rights, while balancing the competing interests of a wide range of stakeholders. The Guideline calls for boards to be composed of an appropriate balance of relevant skills, diversity and independence to promote the kind of decision-making that encourages more inclusive, innovative, and ethical practices.

Effective corporate governance equally hinges on the board’s resilience and adaptability. In a nod to the future, the Guideline highlights the value in ensuring that boards are equipped to adapt to modern challenges, including new regulations and emerging risks of all kinds, through ongoing training and periodic assessments of performance.

The Guideline is nothing short of a powerful call to action for entities to transcend regulatory compliance and adopt effective corporate governance practices that maximise long-term success and build investor confidence. While all financial institutions within the FSC’s regulatory jurisdiction are required to implement a comprehensive corporate governance framework that ensures compliance with the Guideline, the Guideline emerges as a blueprint for other businesses in Barbados seeking a roadmap for a sustainable and effective corporate governance.

The case for integrating disruptive technology into corporate governance

With the increasing complexity of the regulatory and business environment, there is a compelling case for boards in Barbados to integrate disruptive technologies such as artificial intelligence (AI) into their corporate governance policies and practices. Opportunities abound for boards to use AI to make data-driven decisions that support their strategic objectives and improve the efficiency of their oversight functions; but the significant threats of AI-related risks cannot be overstated – especially if boards fail to integrate AI into corporate governance responsibly.

Responsible integration of AI into corporate governance is a dual exercise of using AI responsibly in the exercise of governance and operational functions, while simultaneously ensuring that frameworks are created to govern its use. Future-thinking boards, alongside management, must assess and determine the avenues through which AI can deliver meaningful value in the context of their business activities, corporate structure, stakeholder interactions, and the specific regulatory environment in which they operate. As businesses navigate the tidal wave of digital transformation, it is incumbent on the board to set clear, ethical standards for AI usage at all levels of the organisation, with principles of transparency, accountability and integrity at the heart of this exercise. With the right frameworks in place, boards can then leverage AI-driven tools in furthering their mandate, to allow for enhanced data-driven decision-making and efficiency.  

Barbados is off to a commendable start in crafting the legal, regulatory, and tax frameworks to support the integration of AI into businesses, and ultimately into boardrooms where the future must be top of mind. With data privacy legislation in place, there exists a framework to safeguard and guide the use of personal and sensitive data. Coupled with this, Barbados proposes to offer tax credits for centres offering AI and digital training, in order to attract businesses and investors seeking to offer services on island.

Ultimately, for Barbados, the dual integration of AI into corporate governance is not merely a value add – it is fundamental to ensuring effective corporate governance and long-term success. Through innovation, modernised legislation and guidelines that encourage the highest ethical standards, Barbados can reinforce its reputation as a future-focused, global business destination, poised to attract the right investors on the path to safeguarding the future success and viability of its global business sector.