Code of Conduct issued for Cayman Directors

(CNS): The Cayman Islands Directors Association (CIDA) has announced the issue of its code of professional conduct. A release from CIDA explains that the association was formed earlier this year to promote and maintain professional standards of directors serving on the boards of Cayman Islands companies.

There are presently 120 members of the association. Requirements for membership are that applicants must be directors and must either be employed by a Monetary Authority licensed entity or be individuals sponsored by two existing members of the association. The Executive Committee is made up of 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.

At the first AGM of the Association held on 27 May 2008 the membership voted to appoint a Committee to develop a code of professional conduct for members (photo above). 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, a UK recognised body defining the conduct of directors in the United Kingdom and several other jurisdictions. As a result the IOD has given CIDA permission to base its Code on their 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 code for directors prevailing in the UK.

The Executive Committee of CIDA has accepted the recommendation of the Code of Conduct Committee and, in accordance with the articles of association of CIDA, has approved the Code as a Code of Professional Conduct with which all CIDA Members must comply. Paul Harris, president of the association, said he was pleased with the recommendation since members would obviously be comfortable conforming to a Code which is so widely recognised in the UK and internationally.

The secretary of the IOD, in giving permission for the IOD Code to be used as a base for the CIDA code summed up the advantages to this alignment when he noted in correspondence with CIDA: "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."

Harris also noted the importance of the Code being launched at this time when there have been 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 successfully confront the issues they are expected to face in the months to come.”

Asked what would be the situation of directors who were not members of the Association, Harris agreed that they would not be subject to the Code but pointed out that most Cayman resident directors involved in the fund industry were in fact already members of the association and the remainder would probably soon join now that the Code was in place.

A copy of the Code is published on the Association’s web site at www.cida2008.com