WHILE the States was struggling to resolve the difficult issues of the island’s proposed £93m. waste strategy, another meeting was taking place that touched on matters potentially far more significant for Guernsey’s future well-being.

Entitled Responsibilities of Directors in a Changing World, it was ostensibly a technical look at the duties of company bosses with reference to the Guernsey Financial Services Commission’s consultation paper on a code of corporate governance.

In other words, it was an Institute of Directors winter seminar of limited interest other than to a specialist audience.

However, there was an unusually large attendance, a strong panel including the London-based director of corporate governance at KPMG, the global professional services provider, and the hint of an atmosphere in the room.

As the event unfolded, it became clear that some of the most experienced business leaders in the island have very serious concerns about the code being proposed by the GFSC and the long term implications if it is adopted.

Since regulated entities generally do not go head-to-head with their regulator – especially on the eve on an International Monetary Fund inspection of Guernsey – this was an understated opposition, but it was overwhelming.

The draft code, and there were disturbing suggestions behind the scenes that the more draconian elements of it were inserted by the regulator, has unsettled the financial services sector and damaged relations with the commission.

While there will always be tensions in any regulated environment, this goes beyond that and the nervousness is that the GFSC is adopting a stance that will damage Guernsey’s competitive position.

Better run businesses depend on better directors, which in turn requires the adoption of best principles rather than a prescriptive code which improves nothing. Unless, that is, the code is for those who make their living from regulating others.

A flavour of the hostility towards the proposals came from the question: who regulates the regulator? No one, was the answer, combined with a wider view that there needed to be some oversight of the GFSC.

It was another way of asking who sets the regulator’s agenda – and who is accountable for that?