GOOD CORPORATE GOVERNANCE REVISITED

Where these rules not designed to protect companies from the government?

It has been my opinion for many years already that government-owned companies should be kept out of the political sphere as much as possible, so that they may benefit from a commercial, businesslike and market-oriented management. In doing so they also run less of a risk of being milked or used as political toys.

When the current government of Curacao came into power a couple of months ago, it made it very clear, right from the beginning, that it intended to dismiss all and any supervisory directors of both state-owned companies and state-controlled foundations.

According to the Curacao Corporate Governance Ordinance, the government must ask prior advice from the Corporate Governance Adviser (Stichting Overheids Accountants Bureau has been temporarily appointed as such adviser), i.e. prior to any dismissal. On 1 December 2010, the Corporate Governance Adviser made it very clear that the proposed collective dismissal would be a violation of the principles of good corporate governance (click here). Any dismissal should therefore be reviewed on a case-by-case basis.

One would expect the government to change its policy and to adhere to the principles of good corporate governance as laid down in Curacao legislation and as promoted by the Organization for Economic Cooperation and Development (OECD). In 2005 the OECD issued the ‘Guidelines on Corporate Governance of State owned Enterprises’. According to the OECD:

“The State should act as an informed and active owner and establish a clear and consistent ownership policy, ensuring that the governance of the state owned enterprises is carried out in a transparent and accountable manner, with the necessary degree of professionalism and effectiveness”.

Much to my surprise, the government of Curacao announced that it will now change the law in order to be able to dismiss supervisory directors collectively. The reason: the government wants to have more, rather than less, political influence on state-owned entities. Bye-bye good corporate governance and hello to opportunities for misuse.

In my posting of 15 April 2010 on this very blog, I posed the following question: “However, the question is to what extent politicians can withstand the old temptation to appoint their friends or other persons they consider loyal to their party.” We now know the answer.

Karel Frielink
Attorney (Lawyer) / Partner

(11 January 2011)

.

Leave a Reply

You must be logged in to post a comment.