CHIEF EXECUTIVE OFFICER and general manager of the Barbados Stock Exchange (BSE) Marlon Yarde has suggested that a fear of “investorship” may be hampering the growth of the Barbados economy.
Pointing out that there were a number of companies with quality products and services perfectly suited for export markets, he said they needed significant injections of capital to be able to penetrate international markets.
Yarde suggested that the economy could greatly improve if these companies offered shares to the public with the intent of raising capital to increase capacity.
“With greater capacity comes greater potential to boost export sales and increase profitability. By extension, this increased capacity can help to increase local employment, improve [gross domestic product] and help the economy to expand,” he said.
Yarde noted that some businesses were cautious about offering shares to the public because of a concern that they would lose control of the ownership or the direction of the company.
Concern unfounded
However, he said this concern was, for the most part, unfounded since Barbadian investors generally did not get involved in the operational issues of listed companies.
Yarde noted that operational issues were the purview of the CEO and senior management who were directed by the board of directors. Board members are elected by shareholders at the annual general meeting and they have responsibility for the appointment of the CEO and senior management, he reminded business owners.
He stressed that the CEO and senior management were accountable to the board while the board was accountable to the shareholders. This structure, he said, followed the robust corporate governance guidelines required for publicly listed companies. Yarde also reminded business owners that they had total control of just how many shares of their business could be offered to the public and listed on the exchange.
“Business owners that are concerned about maintaining majority ownership can own 51 per cent of total shares listed,” he said
He said the overall benefits of going public far outweighed any perceived challenges. “There is a very simple truth for business owners to consider.
“A 51 per cent ownership stake in a multimillion-dollar company is worth more than a 100 per cent ownership stake in a $100 000 company. If going public allows businesses to raise the capital to grow from a $100 000 company into a multimillion-dollar company, the business owner benefits, investors benefit and our economy benefits. The concern about having investors on board should not be a barrier to companies building greater profit potential,” he said. (PR/NB)?
