The Cayman Islands Directors Association Guiding the way

Sidebar Information:

The Cayman Islands Directors Association

During the period 2000 to 2008 the number of alternative investment funds registering in the Cayman Islands increased dramatically.

This gave rise to a demand for experienced and qualified directors to provide corporate governance to funds locally. Cayman management companies had supplied directors to Cayman registered companies for many years mainly by the use of corporate directors but now the demand was for personal directors and company managers soon began to realise the provision of local professional directors to hedge funds was becoming a core part of their business. In addition professionals were leaving law firms, banks and accounting firms to set up their own boutique director services companies. Retired but experienced professionals were also offering themselves to act as directors on a stand alone basis.

It was apparent that a new industry had been born in the Cayman Islands; one that was critical to the success of Cayman’s burgeoning fund industry. The desirability of a formal association of company directors had been discussed among professionals for some time but it was not until early 2008 that a small group of licensed company managers met to formally discuss the situation. It was agreed there had to be some method arrived at whereby good corporate governance could be promoted and maintained and where professional directors could meet together to discuss common areas of interest.

It was agreed that in the interests of securing the best independent corporate governance standards for the Islands the association should be an independent association of individuals rather than one comprised of or under the influence of institutional fund service providers. It was therefore decided to form an association along the lines of, but not affiliated with, the United Kingdom Institute of Directors, a UK recognised body defining the conduct of directors in the United Kingdom and several other jurisdictions. This meant that the association would be an association for individual directors and would be run solely by those persons carrying out director services in the Cayman Islands.

The focus of the Cayman Islands Directors Association is similar therefore to the Institute of Directors in London. The purpose is to promote and safeguard the interests of directors of Cayman Islands registered companies and to define a code of conduct and best practice for its members which will ensure corporate governance of the highest standard thereby further strengthening the integrity of the Cayman Islands financial centre.

A circular was sent out to all persons known to be directors of Cayman companies inviting them to join as founding members. A meeting of all the founding members of the Association was held on 27 May, 2008, at which the first executive committee was appointed. A committee was also appointed to compile a general Code of Conduct for the Association.

After a review of several codes of conduct from various sources the Committee entered into correspondence with the Institute of Directors in the United Kingdom. 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. CIDA has therefore kept very close to IOD’s Code of Professional Conduct except for local adjustments.

The IOD Code carries a number of useful references which are very relevant to the work directors perform here, particularly fund directors, such as: seeing the Board is provided with sufficient and timely information, ensuring open access between the Board and Auditors, ensuring proper communication with shareholders, avoiding conflicts of interest, no insider trading, independence and seeking professional advice etc.

The secretary of the IOD 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”.
The Executive Committee accepted the recommendation of the Code of Conduct Committee and, in accordance with article 17.1.6 of CIDA’s articles of association, approved the Code as a Code of Professional Conduct with which all CIDA members must comply. A copy of the full Code is published on the Association’s web site at

The criteria for membership of CIDA recognises two types of applicants:
(a) a person resident on the Island who is a director of a Cayman registered company, who is also employed by a Cayman Islands company licensed and regulated by CIMA and whose membership application is supported by his employer or;
(b) a person resident on the Island who is a director of a Cayman registered company whose application is supported by at least two existing members of the association.

Limiting the membership to employees of licensed and regulated firms and those whose applications they support introduces an element of indirect regulation to the membership since all of these persons will be very familiar with the concept of KYC, due diligence, accountability, disaster recovery, best practice etc.

CIDA publishes a periodic newsletter with articles of topical interest to Cayman directors and the association has also entered into meaningful dialogue with the Cayman Islands Government and with the Cayman Islands Monetary Authority with regard to matters concerning corporate governance in the Cayman Islands.

Having already dealt with the Code of Conduct, CIDA is now ready to embark on new projects. A series of quarterly meetings of members are planned to discuss issues relevant to corporate governance.

There has been discussion on the Island recently regarding the desirability or otherwise of directors indemnities and also whether there should be a defined limit as to the number of directorships any one individual should take on.

These are matters that the membership will be discussing in the near future, probably at the quarterly meetings in order to issue statements of guidance thereon. In doing so CIDA will look beyond any special interests other than those pertinent to the Cayman Islands financial industry and beyond any political rhetoric to establish a true level playing field with our global competitors, offshore and onshore.

With an executive committee of nine and a general membership of over 140, CIDA has become the voice of the fund director in the Cayman Islands. The organisation provides a wealth of knowledge and know-how relevant to the Cayman Islands fund industry. Membership however is open to all fit and proper individuals acting as directors of funds, public and private companies and special purpose vehicles.

It is the fund director who appoints the investment manager, the lawyer, the administrator and the auditor. It is the fund director who has the most contact with the service providers to the fund during its day to day operations and it is the fund director who must ensure, with the necessary professional advice, that the funds are compliant with all relevant laws. Coming together as a body in CIDA, fund directors now have the opportunity and ability to chart a course in the best interests of themselves, their companies and the fund industry of the Cayman Islands.


CIDA executive committee members pictured with Yolanda Mitchell and Mitchell Scott, senior officials of the Cayman Islands Monetary Authority at a luncheon meeting held late last year during which the executive committee explained the aims and purposes of the newly formed Cayman Islands Directors Association. Back row, left to right: Garry Wilkins (CIDA Exco), Albert Smith (CIMA former Head of Insurance), Victor Murray (CIDA Exco). Front row, left to right: Mitchell Scott (CIMA Head of Policy and Development), Paul Harris (CIDA President), Yolanda McCoy (CIMA Head of Investment and Securities), Don Seymour (CIDA Vice President), David Egglishaw (CIDA Exco).