|The Bahamas Investor Magazine
December 8, 2010
December 8, 2010
The Bahamas Chamber of Commerce and the Bahamas Employers Confederation (BECon) are set to provide a more visible, vocal and stronger advocacy for the private sector once their merger is complete and new officers elected in May this year. It is widely believed that the new entity will be better suited to meeting the needs of the local and international business communities.
The resulting organization will set its sights on raising professional standards and helping to seek out new opportunities, with an emphasis on business education services. Moreover, the merger will reduce the duplication of services and combine membership. Its leaders believe that their forward-thinking philosophy and local support will also instill confidence in investors looking to do business in this jurisdiction.
Long time in the making
The merger has been a long time coming, with murmurings of a possible collaboration since 2001. But it took three years for a formal meeting to be held and for the respective groups to realize that a combined organization would be beneficial to both entities.
“Both organizations felt it would be strategic to pool their resources to become a more unified and stronger voice for the private sector, and to help improve [the organizations’] weak institutional capacities brought on by high debts, low levels of revenue and lack of resources to render the requisite services to their members,” says Luesette Howell, a senior specialist for employers’ activities from the subregional office for the Caribbean of the International Labour Organization (ILO). Howell, who is based in Trinidad, provided technical assistance for the merger.
Merger talks began in earnest in 2009 between then chamber president Dionisio D’Aguilar and BECon president Brian Nutt. The dialogue continued when Khaalis Rolle, chief marketing officer at Bahamas Ferries, succeeded D’Aguilar as chamber president in May the same year. Rolle had served on the chamber’s board since 2004.
Over the following two years, board members of both groups convened and formed a Merger Committee that included select members, who sat on both boards–a deliberate move to help preserve the unique culture of the two organizations.
However, the merger did not come without the natural tensions, says Michelle Patterson, Merger Committee chair. Patterson, a human resources executive, was one of four directors who served simultaneously on the boards of BECon and the chamber.
“Any time you have two very long-standing, traditional, high-profile organizations with their own mandates and roles, you obviously have to tread very carefully in terms of making sure that you protect everybody, particularly the membership of both organizations, their expectations and their needs,” she says. “There is a challenge in blending those personalities.”
With the help of Howell and the ILO external collaborator, Eduardo Alonso, both organizations began an organizational review in 2010, the objective of which was to draw conclusions and make recommendations for the smooth transition to a sustainable merger to commence at the beginning of 2011. The ILO found that the proposed merger had strong support.
The Merger Committee then had to produce a strategic plan with a clearly defined vision, mission statement and corresponding organizational structure that could fulfill the mission of the new organization, the goal of which would be “to create a sustainable and proactive new organization that will provide new and improved services as the consolidated voice of the private sector and that will have a greater capacity to influence economic and social policies.”
Effective and efficient
“What we are doing here isn’t new,” says chamber president Khaalis Rolle. “Several other countries have done the same thing. We are preparing for a new environment. We are beginning to see consolidation for more efficiency and to be more effective.”
An advocacy group for the private sector, the 76-year-old chamber represents a cross-section of businesses in The Bahamas. It has just over 700 member businesses and individuals in six divisions: construction, tourism, transportation, sales, manufacturing, and international companies and professional business services. Annual membership subscriptions total around $500,000.
Smaller and younger, but no less important, BECon, was founded in 1966 and officially represents local employers at the national, regional and global level. In fact, it is the ILO’s recognized voice of employers in the country. Additionally, BECon is a founding member of the Trinidad-based Caribbean Employers’ Confederation and member of the National Tripartite Forum (TRIFOR).
BECon has 75 members and accepts individual business persons only in special cases. The annual membership subscription totals around $60,000.
Although there is little overlap in the membership of the two organizations, there is some duplication in services, explains Nutt. “As the only two national organizations open to all businesses, we are both in a situation where we have overlap in our functions,”?he says. “The Bahamas is a very small country. Volume of scale is very difficult for us to achieve with a population of 300,000.”
The new organization is expected to have close to 800 members, with an organizational structure that differs from that of the chamber and BECon, which have a chairman of the board of directors, and not a president, at the helm. The chamber post of executive director will be replaced by a president/chief executive officer, who will be responsible for the day-to-day operations of the new organization. There will be about 13 people sitting on the board of directors.
“We are also ensuring that the labour component is protected in the new structure by having someone who is directly responsible for labour issues at the vice-chairman level,” says Rolle. “We want to build this new structure to be functional and productive.”
The various divisions of the new entity will be chaired by individual directors reporting to the overall board and working to bring the strategic plan to life. Previously, BECon, a voluntary association, was governed by its constitution, which provides for “not less than five nor more than 12 directors” charged with the organization’s management.
The chamber–a registered non-profit company with established, independent networks in the Family Islands–had nine board members and five officers, including the president. The chamber operated through committees charged with overseeing various tasks and functions. Each committee had a chairman, who in most cases sat as a member of the board.
Although the number of committees could vary annually, standing committees’ responsibilities ranged from the development of training programmes to overseeing the annual Chamber Week and business awards ceremony. The chamber also established special committees that were dissolved once their task was completed.
“Fundamentally, I think this [new organization] gives us economies of scale and economies of scope,”?says Rolle. “One of the issues that I have had since becoming president is maintaining membership, especially during a difficult economy. When times become difficult, your membership questions the value proposition.”
With money tight and sales flat, membership subscription was the first casualty, he said. Members expected a greater return on their investment, but the advocacy roles that both organizations excelled at simply did not meet their expectations.
“BECon and the chamber are the best at advocating and getting policies that made sense in place, challenging government on their decision-making process, making sure that the legislative environment was conducive to doing business,” says Rolle, whose organization recently led trade missions to a number of countries, including China and Haiti, in order to foster economic exchange and further deepen bilateral ties. “However, in many cases, members say we need to touch them on a level that helps them remain viable in a difficult economy.”
An expanded list of services offered through the new organization, such as a proposed labour help desk, a young professionals arm and possibly an energy and environment group, is expected to improve its value almost immediately. For additional value, there is also the Chamber Institute, which was established jointly by The Bahamas Chamber of Commerce and BECon more than a year ago. The institute offers affordable workshops and programmes featuring local and international instructors. The goal is to help members with their careers and business development plans.
Future foreign investments
“One of the things we recognize is the fact that in order to sustain our economy, we need direct foreign investment in The Bahamas,” says Nutt. “There is no question about it. We’ll continue to advocate to direct foreign investors that when they are operating in The Bahamas, the laws and regulations are not too cumbersome. We’ll do what we can to assist business in The Bahamas, whether it is local or foreign, with the realization that direct foreign investment is a cornerstone to our standard of living.”
With The Bahamas currently discussing membership in the World Trade Organization (WTO), Rolle believes local businesses have to focus on being more competitive and improving their ability to deliver services in a larger market.
“One of the complaints large foreign direct investors have is the ability to access services from businesses locally in a timely and cost-effective manner,” says Rolle. “I think once [our] businesses begin to understand what the global competitive landscape means to them and to their survival, I think you will see an improvement in the way we deliver services and the way foreign direct investors access services in The Bahamas. You’ll have improvements in the investment climate.”
According to Howell, a formal merger, with all of the legal, political and administrative requirements that go with it, would set a precedent for the region, giving The Bahamas the edge.
Says Nutt: “We’re taking what’s in existence, putting it together into one and coming out with a better product at the end of the day.”