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To: Chairman of Guardian Holdings From: Adasa Edwards

Corporate Governance GHL


Review Report

Adasa Edwards 18th March 2012

Table of Contents
Executive Summary / Background to the CompanyPage 2 Overview...Page 3 Problem IdentificationPage 4 Structure and Organizational Chart.Page 5 Effectiveness of GHL Policy Driven Strategies.Page 7 Recommendations for GHL Board of DirectorsPage 8 GHL Risk Assessment...Page Glossary of Definitions..Page 10 References..Page 11 Appendices.Pages 12-21

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Executive Summary Background to the Company Guardian Holdings Limited Guardian Holdings Limited (GHL) is a holding company formed in 1982 and became a publicly listed company in Trinidad & Tobago on June 18, 1996 and in Jamaica on September 20, 2000. GHL subsidiaries provide financial services through the production, distribution, and administration of insurance and investment products. GHLs principal operations are conducted throughout the Caribbean, and in England and the Republic of Ireland. There are three main business segments: Life and Health Insurance, and Pensions; Property and Casualty Insurance; and Asset Management. Guardian Holdings Limited (GHL) is the parent company for an integrated financial services group with a focus on life, health, property and casualty insurance, pensions and asset management. The company has grown steadily and currently operates across the English and Dutch Caribbean with interests in the United Kingdom. It is listed on both the Trinidad and Tobago and Jamaica stock exchanges. Guardian Holdings Limited 2010, [online] Available at:< http://www.guardianholdings.com/content/ > [Accessed 10 March 2011].

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Overview

Why Adopt A Corporate Governance Context? The pertinence of authority management within a business framework is essential as corporate governance can be stretched beyond policy development. Good corporate governance can strategically develop other organizational foundations. Therefore there is an essential link between governance and other strategic business units development. Cognizance of the principles of good corporate governance can adversely initiate increase economic development since the principles of this study is initiated through specific rules that attains to good corporate structure and policy development. If corporations are to stay financially stable in an economic depressed era there are necessities that are to be followed such as stringent leadership and prudent regulation and supervision. It therefore means that adversely bad corporate governance would lead to instability within and organizations financial structure. There must be capable and experienced directors with a focus mission and vision guideline inclusive of an accountability of organizational system at all levels. It is therefore essential that we understand ethics and the nature of corporate business as it relates to the above mention study(corporate governance). Ethics is concerned with values and moral identity and the distinguishing nature of what is wrong from right. The values, which are ethical values, should be the model for leadership within any organization since ethical leadership is transparent, good for business and creates a trusting nature between shareholders and corporation. We should not be blinded by the fact that business is based on competiveness and marketing and not all leadership styles are the same, but good governance attains maintaining ethical values and cohesively preserving competitiveness.

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Problem Identification Corporate governance notwithstanding the confides at enterprise level can be seen as a system by which companies are directed and control, ( Tricker 2009) in introducing the definition explain it explains it as the exercise of power over corporate entities. Understanding this definition needs ones nature to be conscious of executive leadership level and not only from a management viewpoint. In identifying the problem I would seek to resource pertinent data and information that will attain to negative factors of this corporate structure thereby making it a problematic finding that without research and understanding of the principles, policies and practices of this related study would seem un-disclosed. Firstly in identifying negatives or problematic situations within GHL(Guardian Holdings Limited), I must say that they provided comprehensive reports and adheres to the principles of research topic somewhat, the company provided a Corporate Governance report for past fiscal year which was the fundamental basis of my research. Guardian holdings the premier Insurance Company within my region provides a sound stable foresight for shareholder and stakeholder, with claims of potential growth in interest rate in the long-run. Investigation of GHL investment portfolio via companys website and Trinidad and Tobago Stock exchange reveal to me uncertainties and I am sure every other shareholder and stakeholder. I studied this company since I have invested a significant portion of my salary within their seemingly stable stock no crucial investment decision made by the governing council or board of directors of GHL holdings. The underlying data unraveled as can be seen in the annual report see( GHL Annual report figure1.) that GHL made significant acquisition that are not mention within the annual reports of the company. These non-disclose data in and economic depress time can lead adversely to un-stability. The fact is that most times high riskinvestments leads to high turnover and even increased profit margin, although this risk taking measure is at the expense of the stakeholders. On the 19th Aril 2006, the share price of Guardian Holding Limited (GHL) was stagnant at $18.00 at this time this share price was down 77% since the beginning of that mention year. GHL then ended its fiscal year which in Trinidad occurs after our annual budget around October of 2005 with a significant lose in profitability.ES was down 38% from 2.98 to 1.85. Fair value gain related to GHL equity holdings fall from 528 million to a loss of 24 million, a gain in the diversification strategy implementation of another portfolio cushion this unforeseen loss. Therefore their diversification mechanism can be both positive and negative, they acquire Link and Zenith which are two European based companies within the property and casualty line of business rather than there predominance of the Insurance market. Such acquisition was undisclosed to me and to the public. Integral investment such as these that are not mention in the
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annual report of subsidiary companies that holds share interest in the investment portfolio of this organization. Within the Annual report (see) there is mention of Tonetic and RBTT which are Technology and Commercial Bank in Trinidad and Tobago respectively, so why not disclose mention of these investment which attain to profitability within GHL diversification strategy, the answer to me is simple it is because they are stepping out of there dominant life insurance segment and the UK general insurance market are softening, this can adversely lead to a dis economies of scale since Trinidad and Tobago has already seen the collapse of and Insurance Investment giant by diversify globally in another geographic location, this disclosure of information may somewhat be seen by shareholders as too risky but if we are to attain to the principles practices and policies of corporate governance then we are to respect the fore mention grounds of good governance. Governance of Corporations needs a lot of intrinsic investigating and for transparency multinational organization and regional institution are adopting to introducing auditing committees. GHL attains to this principle by establishing three standing committees. The problem that is instituted in this situation is that executive directors form the body of these committees Audit, Compliance & Risk Committee 1. Remuneration committee 2. Corporate Governance Committees. 3. Remuneration Committee

Another issue of transparency is that the chairman of GHL sits on various boards both public and private sector as chairman, this can lead to contradiction and conflict also insider trading to compliment Chairmans personal business relations. The Chairman of GHL is also the chairman of Associated Brands and Caribbean Airlines within resent and past tenures. The inside running can be seen as regular business but once there is negotiations for personal gain and not one of benefit for stakeholders and shareholder it can be seen as insider trading and therefore the company is not practicing the ethics that is thought in a good governance framework. In evaluating what needs to be done to quelled this challenging circumstance I believe that adherence to the corporate governance code will provide corporate executives and member of GHL board of directors with the principles of good governance that can be used as a guideline for transparency and virtuous ethics. The code of governance chosen would be disclosed in my recommendation for GHL.

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Structure and Organizational Chart

Analysis and Process of GHL I believe that GHL holds and attains to a sound structural authority in that they have a welldiversified board of directors that steers and directs in a strategic beneficial policy making initiative. GHL consist of a board of directors of which MR. Arthur Lok Jack is the chairman, a well experience and practicable director that have presided various board within the Caribbean and more noticeable Trinidad and Tobago. Directly under the Board of Directors(see apendix document 2) will be the delegation of their senior management team who would carry out the policies that was given out by the board of directors. I believe that this structure is pertinent in good governance, Most multinational corporations attains to this governing structure where by the CEO carries out the policies set by the Board of Directors, therefore the Management structure of Guardian Holding controls the operational aspect of the company whereby the Board sets the policies. Jeffrey Mack holds the position as Chief Executive Officer for GHL and delegates approved policies to be carried out throughout his downward hierarchies. After the board converges about business prospects and initiatives, the outcome from GHL committees and board of directors meeting are then trusted into minutes for Mr. Philip HamelSmith (Chairman)see appendix corporate governance committee. This committee will then reviews and develop appropriate guidelines for governance for GHL They will then make recommendation for the board of directors to initiate new strategies of authority to implement a course of principle of action, which will then lead to policy making for GHL. The policy making process is keen to the development of any governing body and it is at this level the process is initiated, therefore employee follow the strategic vision set out by GHL Board of Directors.

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Effectiveness of GHL Policy Driven Strategies

GHL is very effective in the governance of their holistic enterprise and subsidiary companies. The experienced and well qualified board of directors is in depth in firstly the fundamentals of the insurance and investment industry. I see this as a well-defined objective for stability of and Regional or multi-national corporation. As can be seen by the fall in this economic depressed era where past noticeable stable firm had their rise and fall, it is not simple to keen and optimum share rice and offer a favorable share price for stakeholders. Insurance is the savvy of this corporation and risk assessment is the essential factor here. I think that the investments that are being implemented by this board are acquisitions of future growth. GHL is no fool in investments, they hold firm to instigating an experienced committee of Audit and Compliance and sets out to investigate all fore mention accounts of past and resent accounts. As can be seen in the abstract of personal information of every board member, the experience of insurance and financial are untwined. Therefore there corporate vision, values and strategies are in the direction that it should be in.

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Recommendations for GHL Board of Directors

My recommendation for GHL will be based on my investigation and resulting problem identification in my report. It is essential to understand that the underlying problem that I pointed out was a matter of concealed information, insider trading and transparency. GHL published a detailed Corporate Governance Report and gives all financial accounts on their website, they are still not attaining to the fundamentals of corporate governance principles. My recommendation will therefore be to adopt one of the international codes of corporate governance practice resourced from International Agencies. The Organization for Economic Development Co-operation (OECD) produce the right format and framework to curb GHL problem and to promote my argument. It states 5 principles to attain to that guides a corporation in proper ethical policy making. 1. Ensuring the Basis for an Effective Corporate Governance Framework. This therefore means ensure transparency 2. The rights of shareholders and key ownership It should protect and facilitate the shareholders rights 3. Equitable treatment of shareholders 4. 4The role of stakeholders in corporate Governance 5. Disclosure and Transparency.

All mention points attains to my disagreement with GHL current governing, but point four and five really address this in context as it encourage active agreement between stakeholder on one common basis of financial sustainability and the trustworthiness of information and disclosure.

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GHL Risk Assessment Within Last year GHL seek to resource and then initiated BeWise GRC platform for Risk Management; this is a significant and well established governance risk management and compliance platform for analyzing risk. The basis of the software tool is for sustainability performance management.

Through research and development this Bewise initiative will produce reports with the importation of evidence and financial statements of the likely outcome of implementing a risk investment .Before this software implementation Guardian Holding Limited relied on their auditing committee for Risk Management.

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Glossary of Definitions

GHL- Guardian Holdings Limited RBTT - Royal Bank of Trinidad Tenectic Limited A Subsidiary of Guardian Holding Limited

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References

Guardian Holdings Limited 2010, [online] Available at:< http://www.guardianholdings.com/content/ > [Accessed 10 March 2011]. Guardian Holdings Limited 2010, [online] Available at:< http://www.guardianholdings.com/content/index.php/about/corporate-governance-2/> [Accessed 10 March 2011]. Guardian Holdings Limited 2010, [online] Available at:< http://www.guardianholdings.com/docs/Q3-US-Financials.pdf> [Accessed 10 March 2011]. Tricker, B, 2009. Corporate Governance- Principles, Policies and Practices. : Oxford.

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Appendix

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Organisational Structure Guardian Holdings Limited || Joint Ventures Joint Ventures Country of Incorporation Effective Percentage (%) of Interest held & 50

Servus Ltd

Republic Tobago Republic Tobago Republic Tobago

of

Trinidad

Tobago Ltd RGM Ltd

Plantations

of

Trinidad

&

25

of

Trinidad

&

33.3

Guardian Holdings Limited || Organisation Structure


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You are here: Home About Organisation Structure GHL Share Prices Trinidad and Tobago Stock Exchange Closing ($) 14.01 Day's Quotation Change 0.01

Jamaica Stock Exchange Closing Bid ($) 0.00 Closing Ask ($) 300.00

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Guardian Holdings Limited || Member Companies Fig.1

GHL CONSOLIDATED

Business Divisions

LH&P

Caribbean P&C

International P&C

Asset Management

Line of Business

Life Health Pension GLOC

Property Motor Marine

Q/Share XL

Fund admin Trading

GGIL

Guardian Re

GAM

Guardian Life of the Caribbean

GLL

WIA

GAMJA

Fatum Life

Fatum Gen.

Asset Management

Life & Pension

P&C Insurance

Strategic Investments

TPA Services

Reinsurance & Lioyds

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Governing Board of Directors Board Document 2 Arthur Lok Jack (Chairman) A Guardian Holdings Director since March 1997, Arthur Lok Jack became Chairman in 2004. As one of the Caribbean regions most dynamic and successful entrepreneurs, Arthur Lok Jack has grown his own business, Associated Brands Industries Limited, into a major enterprise regionally. Mr Lok Jack is Chairman of BWIA and the recipient of the Chaconia Gold Medal in August 2004, he has also been awarded the titles of Master Entrepreneur (Ernst & Young), Caribbean Luminary (UWI), and was bestowed a Doctor of Laws Degree (Hon) by the University of the West Indies, in recognition of his influence on Caribbean economic well being. In further recognition, in 2005 The University of the West Indies, Institute of Business was renamed The Arthur Lok Jack Graduate School of Business. Peter Ganteaume, Deputy Chairman Peter Ganteaume has had a distinguished career in finance, accounting and audit since qualifying in June 1969 as a Member of the Institute of Chartered Accountants of England and Wales. He was appointed CEO of Guardian Holdings Limited in July 1999 and served the company until 2006. Mr. Ganteaume is a former Executive Chairman of PricewaterhouseCoopers and has presented numerous papers on technical accounting and finance related subjects. He has also served as Chairman of the Accounting Standards Committee of the Institute of Chartered Accountants of Trinidad and Tobago and as a member of the Board of Directors of the American Chamber of Commerce of Trinidad & Tobago. He has also been appointed by the Trinidad & Tobago Government to serve on Fiscal Review Committees. Jeffrey Mack, Group Chief Executive Officer Jeff Mack became the Group CEO of Guardian Holdings beginning in 2009 bringing with him a combination of immense industry expertise with international experience and management know-how. He has an MBA in Finance from Fordham Universitys Graduate School of Business and holds the Chartered Property and Casualty Underwriter (CPCU) as well as the Associate in Reinsurance (Are) designations. Jeff is also a skilled communicator, his first degree being in that field. From 2004 to 2008, Jeff had been Chairman of the Board, President and Chief Executive of the four insurance companies of Providence Washington Insurance Group: Providence Washington Insurance Company, York Insurance Company, American Concept Insurance Company and Providence Washington Insurance Company of New York. For 18 years prior to that he had been with Swiss Reinsurance, his last post being Managing Director and Chief Operating
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Officer of Swiss Reinsurances Financial Services Business Group in Zurich, Switzerland. Douglas Camacho Mr. Camacho is Group Executive Director of Guardian Holdings Limited (GHL) and Group President- Strategic Investments and Projects and a Director of Guardian Life of the Caribbean Limited. He is currently President of the Association of Trinidad and Tobago Insurance Companies (ATTIC), Chairman of the Board of Governors of the Trinidad and Tobago Insurance Institute (TTII), Chairman of the Board of the Insurance Association of the Caribbean (IAC)and Chairman of the Pan Caribbean Business Coalition (PCBC). Mr. Camacho also serves on the Boards of the Eastern Caribbean Gas Pipeline Company (ECGPC), RGM and SERVUS - Guardian's facilities maintenance management company. Active in the industry for over 30 years, he has been a member of the Guardian Holdings Board since 1998. Philip Hamel-Smith Philip Hamel-Smith joined the Guardian Holdings board in March 1997. An Attorney-at-Law, he is the Managing Partner of M. Hamel-Smith and Company. This former Trinidad & Tobago Senator, Mr. Hamel-Smith has served as Vice President of the Senate and is a member of the Law Association of Trinidad & Tobago, the St. Kitts & Nevis Bar Association, the American Bar Association and the International Bar Association and Law Society of the United Kingdom. Mr Hamel-Smith is also a Director of The American Chamber of Commerce of Trinidad & Tobago. Aleem Mohammed Dr. Mohammed was appointed to the Guardian Holdings Board in June 1998. A medical practitioner by profession, Dr. Mohammed is Chairman of the SM Jaleel Group of Companies.

Selby Wilson Mr. Wilson joined Guardian Holdings Limited as a Director in March 1997. He is former Minister of Finance in the Government of the Republic of Trinidad and Tobago. Mr. Wilson is a Fellow of the Certified Chartered Association of Accountants. He now practices as a Telecommunications Policy Consultant and currently works in an advisory capacity with the Caribbean Telecommunications Union. He has lectured at the tertiary level in Management Accounting and Financial Management.

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Imtiaz Ahamad Mr. Imtiaz Ahamad joined the Guardian Holdings board in 2004. The CEO of Southern Sales and Service Company Limited also sits on the Boards of Automobile Sales Limited, CIC Insurance Brokers Limited and CIC Holdings Limited. He also sits on UWI Campus Council. Antony Lancaster Mr. Antony Lancaster brings to the Board nearly 50 years experience in the general insurance field, many of which were in the Caribbean and also a number of international jurisdictions and in particular the United Kingdom. Prior to his retirement he served as Chairman and Chief Executive of GAN insurances and the Groupama insurance companies in the UK. He joined the Guardian Holdings board in 2003. David Davies Mr Davies brings to the Board extensive experience in the pensions and the insurance industry, spanning some 30 years, with strong technical, commercial and general management skills in business and strategic development, major restructuring and business process improvements. A Fellow of the Institute of Actuaries and previously Chief Executive of Pearl Assurance and London Life in the UK, he joins the Board of Guardian Holdings Limited (GHL) as a non-executive Director. Fe Lopez-Collymore F Lopez-Collymore is the General Counsel and Corporate Secretary of the GHL Group based in Trinidad and Tobago. Admitted to practice as an attorney-at-law of the Supreme Court of Trinidad and Tobago since 1981, she oversees the provision of corporate secretarial and legal services to the Group in addition to her function as Corporate Secretary. She is a member of the GHL Executive Board. Jemal-ud-din Kassum A highly-respected finance professional, Mr. Kassum brings to the GHL Board his broad experience in international development banking and policy advisory experience in emerging markets.From 2000-2005 he was the World Banks Regional Vice President for East Asia and the Pacific region. In this capacity he was responsible for all the World Banks lending and policy advisory operations in 22 countries including China (the World Banks largest client), Indonesia and Vietnam. This included managing a highlydecentralized team of 700 managers and staff, a US$60 billion sovereign lending portfolio, and annual new lending of about US$3 billion.His tenure at the World Bank was preceded by a 25-year career with the International Finance Corporation (IFC) where, from 1997 to 2000, he was Vice President responsible for all of the IFCs global new investments.

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In 2006 he co-founded AJK Financial Services, LLC, a Washington, DCbased advisory firm focused on emerging markets. He has also advised the World Bank Group and the African Development Bank on investment strategies related to both private and public investments in emerging markets.

Senior Management Team- Document 3 Jeffrey Mack Group Chief Executive Officer Douglas Camacho Executive Director/Group President, Strategic Investments & Projects Neil Dingwall Group Actuary/Chief Performance Officer Martin Jim Group Chief Finance Officer Brent Ford - Group Chief Investment Officer/Group President Asset Management Ravi Tewari Group President, Life Health & Pension Richard Espinet Group President, Caribbean Property & Casualty Steven Martina Chief Administration Officer, Insurance Administration Services Paul Traboulay Group Chief Risk Officer Fe Lopez-Collymore General Counsel & Company Secretary Wendell Mitchell Group Chief Information Officer

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