Being listed on the Jamaica Stock Exchange (JSE) is not just about gaining wider access to capital. Listing comes with stricter regulatory obligations and a heightened demand for transparency. Directors and management must therefore become champions of corporate governance, ensuring that investors, regulators, and the wider business community can trust the company’s operations.

This article is written by Shaniel May Brown, a partner at Myers, Fletcher & Gordon, who has substantial experience in securities law and in advising companies on their corporate governance requirements. She holds a post-graduate diploma in corporate governance from the Jamaica Stock Exchange/Private Sector Organisation of Jamaica as well as a certificate of completion in compliance, ethics & corporate governance from the JSE.

The Importance of Corporate Governance in Capital Markets

At its core, corporate governance is about accountability. Shareholders, especially minority shareholders, rely on directors and senior management to safeguard their interests and ensure that the company operates with integrity and transparency. For listed companies, this responsibility is magnified. Access to public capital brings heightened scrutiny. Strong governance reassures all stakeholders that the company is resilient and well-managed.

Corporate Governance Framework in Jamaica

The main documents that guide JSE-listed companies in relation to corporate governance are the JSE Rules and the Jamaica Corporate Governance Code (developed by the Private Sector Organization of Jamaica). Other provisions in relation to governance can be found in the Companies Act, the Securities Act and its regulations and where the listed company operates in a regulated sector, various guidelines and advisories issued by the applicable regulator.

The JSE Rules include governance standards such as (i) requiring the company to create and disclose its corporate governance guideline (which includes making it available on its website); (ii) requiring timely and accurate disclosure of financial and material information; and (iii) emphasising independence, diversity, and board and committee compositions. For example, companies listed on the main market must have at least an audit committee and companies listed on the Junior Market must have at least a remuneration/compensation committee and an audit committee. These committees shall also be comprised of majority independent directors.

One of the most important pillars of corporate governance is transparency and disclosure. Transparency is the currency of trust in capital markets. Listed companies are required to make timely disclosure of information that could affect share prices or influence investor decisions. This includes financial results, acquisitions/dispositions, changes in corporate structure or capital structure, borrowing of a significant amount of funds, significant litigation and major labour or contractual disputes. In practice, lawyers often advise on the content and timing of disclosures, ensuring compliance with both the Securities Act and the JSE rules. A lapse in disclosure not only undermines investor confidence but may also amount to market abuse, with serious legal consequences.

To aid companies in better tracking their corporate governance practices, the JSE created a Corporate Governance Index (CGI). The CGI provides a numerical basis for measuring how strongly a company adheres to corporate governance standards and best practices. Companies can use the CGI manual as a practical guide to track progress toward their corporate governance goals.

These mechanisms align with global best practices, helping to keep Jamaica’s market competitive and attractive to both local and foreign investors. They also underscore the principle that capital markets cannot function effectively without transparency and accountability.

Corporate Governance Guidelines for JSE-Listed Companies

In Jamaica every listed company must adopt a corporate governance guideline. This document sets the foundation for accountability, transparency, and investor confidence. At a minimum, it should cover: director qualifications and responsibilities; the roles of key board committees; director compensation; orientation and continuing education of directors; annual board performance evaluations; management succession planning; disclosure and transparency policies; standards of ethics and integrity for directors and officers; procedures for handling shareholder queries and complaints; communication policies with shareholders, regulators and the public; and policies on corporate social responsibility including reporting on environmental, social, and governance (ESG) factors alongside financials. Importantly, the guideline should also provide for enforcement and accountability — setting out mechanisms for investigating governance breaches, sanctions for non-compliance, and a commitment to continuous improvement in governance standards.

Raising the Bar Through Governance Culture

While compliance with rules is critical, the real test of governance is cultural. Companies that embed ethical practices and accountability into their DNA tend to outperform those that view governance as a box-ticking exercise. Boards should prioritise:

1) Establishing clear codes of conduct and ethics.

2) Providing continuous training for directors and officers on governance obligations.

3) Creating safe and effective whistleblower mechanisms.

4) Conducting board evaluations and succession planning.

With the rise of ESG investing, companies must strengthen their governance to remain competitive in global markets.

Failure to meet governance obligations carries real consequences — legal, regulatory, and reputational risks. Companies that embrace governance gain investor trust, reputational strength and sustainable long-term growth. Governance is not a one person dream but one for a team — your team of directors, employees and professional advisors.

For companies seeking to list, and those already listed, strong governance is not optional — it is an essential component of sustainable growth and a gateway to attracting global capital.

Shaniel May Brown is a Partner at Myers, Fletcher & Gordon, and is a member of the firm’s Commercial Department. Shaniel may be contacted via shaniel.maybrown@mfg.com.jm or www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice.