Looking back on the future: the further development of corporate governance in Curaçao

A seminar on Checks and Balances in Corporate Governance on Curacao, was held on Thursday February 21st, 2013. More than 125 interested managing directors, supervisory directors, lawyers, accountants and other participants were in attendance.

The seminar was organized by the Board of financial supervision (College financieel toezicht – Cft), the Foundation Bureau for Supervision and Standardization Government Entities (Stichting Bureau Toezicht en Normering Overheidsentiteiten – SBTNO) and the Dutch Caribbean Accountants Association (DCAA). I had the honor to speak on the present and future of the Corporate Governance Code of Curacao.

I have addressed several issues. Here follow a few quotes (click here for the full text of my speech / click here for the text in Dutch):

As far as I am concerned the government should make a clear choice: either activities are carried out in the form of a public service and under the direct responsibility of a minister (and then everybody is a civil servant) or activities are carried out in the form of a company (NV or BV), but then they must be kept as much as possible outside the political sphere of influence. The current situation has a hybrid nature: the company form was indeed chosen but with the retention of as much political influence as possible. This situation is unhealthy and sometimes leads to considerable tension.

When the role of the Supervisory Directors is taken into consideration one cannot get away from the impression that some (former) Supervisory Directors stretched the supervisory duties imposed on them by law and by the articles of association quite a lot. Not seldom do they appear to sit in the Director’s chair or they consider the Director as someone who is supposed to follow blindly the instructions of the Supervisory Board or even of individual Supervisory Directors. Some Supervisory Directors in a manner of speaking spend more time in the company office than the Director himself or they drop in on a Director many times a day to discuss business. Those types of situations are unhealthy. It also impairs the autonomous performance of the Management Board.

On top of that, there are some supervisory Directors who inform the political party, which put them forward as a candidate, about their activities. This does not sit well with corporate governance and is in contravention of the duty of secrecy they have where confidential information is involved. There was even a politician who stated openly that he gave ‘his’ Supervisory Directors specific instructions about what they had to do or not to do. Such practices should be stopped.


Moreover, in my opinion the autonomy of the Management Board of a state-owned company should again become a core issue. The Management Board manages the company, not the shareholder and not the Supervisory Board. Shareholders and Supervisory Board should refrain from giving specific instructions to the Management Board. And then as an illustration I am talking about instructions for instance aimed at buying or selling a certain building, appointing or dismissing personnel, hiring advisors and breaking existing contracts. It is recommended that the Corporate Governance Code be tightened up on this point. I know that Book 2 of the Civil Code allows the incorporation of a wide power of instruction in the articles of association but the rules and principles of corporate governance are opposed to this and there should be no misunderstanding about this.

The shareholder has on the one hand (i) supervisory duties in connection with the Management Board rendering account in the meeting of shareholders (therefore afterwards), and has on the other hand (ii) the power to determine the main lines of the policy to be conducted (intended for the future). It should normally remain this way. Within those ranges the Management Board is free to act.

The Supervisory Board (i) also supervises, albeit more frequently and in more detail than the shareholder, (ii) is entitled to advise the Management Board, and (iii) its approval may be required for passing certain resolutions. The list of subjects which are subject to the approval of the Supervisory Board must be as restricted as possible while it should relate to essentials. Usually it should not be the case that engaging or dismissing an employee, or bringing lawsuits are by definition subject to the approval of the Supervisory Board.


If it would be up to me a fundamental discussion would be held about the relationship of the various bodies of a state-owned company and the outcome of this should also be incorporated into the National Ordinance and the Corporate Governance Code. I already proposed the idea to have the independence of the Supervisory Board provided for in Book 2 of the Civil Code, and therefore also the annual accounts system of the large NV, mandatory for all state-owned companies. As far as I am concerned this should also be included in the discussion. Finally, I think that it is good to give some thought to the question of whether the circle of those persons who can submit an application for inquiry proceedings should be made wider. For instance what are the objections against giving SBTNO that right? Etienne Ys expressed this recently in similar terms and indicated that this right can already be included in the articles of association of state-owned companies (Section 2:272 subsection 2 under c of the Civil Code).


Karel Frielink
Attorney (Lawyer) / Partner

(28 February 2013)


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