Resolution

Blog

12 January 2018

There are many government-related entities in Bonaire. They are very important for the economy of Bonaire and for normal social life. The same is true for Curaçao, Aruba and St. Maarten, by the way. Government-related entities are responsible, for example, for managing port activities, telecom facilities, the airport, the water and energy supply, and housing. In all of these entities, the government (read: politics) plays a role to some extent. In St. Maarten and Curaçao they have tried to reduce the political influence in these companies within the context of the 2010 dismantling of the Netherlands Antilles. In these countries the National Ordinance and the Corporate Governance Code, although far from adequate, serve to achieve this objective.

In Bonaire things are arranged even worse than in Curaçao and St. Maarten. That’s remarkable for such a perfectly regulated country as the Netherlands. In Bonaire they have failed to establish the institution of a corporate governance adviser. The Kingdom Representative plays a limited role in the appointment of directors and supervisory board members, and that’s all. As a result, the government-related entities in Bonaire are at the mercy of the whims of the politicians who happen to be in power. Sometimes these are people who understand that government-related entities should be able to do their work at a proper distance from the political arena. Sometimes there is less understanding for that notion.

It happens regularly that important decisions have to be made by the shareholder. The shareholder of the government-related entities in Bonaire is the Public Body of Bonaire, represented by the Executive Council, under the responsibility of the Island Council. The Executive Council can thus influence the realization of important decisions. Also by doing nothing. Examples include the appointment of directors. The (re)appointment of Supervisory Board members must also be done by the shareholder (represented by the Executive Council). What if it fails to do so? A shareholders’ meeting to implement the necessary (re)appointments will simply not be convened, and then what? For the companies involved, this is a disaster. If a director resigns and a new (suitable) director is not appointed quickly, then the company, you guessed it, will be unmanageable. If the term of appointment of supervisory board members has expired and these board members aren’t reappointed, the company will also become unmanageable. If there are only one or two supervisory board members left instead of the statutory minimum of three, how can valid decisions be made? In that case the management of the company is brought to a halt. After all, prior approval by the Supervisory Board is required for all important decisions as laid down in the articles of association. But what if there is no such board?

“Ah, well”, you may think, “I’m sure all will be fine, we’re at the beginning of the new year!”. Indeed. But if there’s no more water coming out of the tap you’ll think otherwise. These government-related entities are of the utmost importance for your economy, whether you’re living in Bonaire, Aruba or Curaçao. You may therefore expect from your political representatives that they will take their responsibility. In your interest, they must ensure that competent people are appointed in a timely manner at those companies that are so important to your day-to-day functioning.

But what if that simply doesn’t happen? Article 2:7 of the Civil Code of Bonaire and of Curaçao and St. Maarten stipulates that those who are involved in the management and supervision of a legal entity must behave with regard to each other in accordance with the rules of reasonableness and fairness. I think that an Executive Council that doesn’t take its responsibility as a shareholder should be forced by the civil court to convene a shareholders’ meeting if this is necessary for a company’s survival.

Do you know what’s funny? There is no literature or jurisprudence about this matter. Do you know why that is? Because this is the only place in the world where a shareholder will knowingly let a company hit the rocks. One thing is clear. This kind of behavior is not in the interest of the people, it is not in your interest. Therefore the shareholder in these government-related entities must come into action and take his responsibility. A resolution for 2018! Felis Aña!

This blogpost is also available in Papiamentu. Click here to download a pdf version.

Do you have a question about corporate governance yourself? Please e-mail it to governance@ekvandoorne.com and perhaps your question will be discussed in the next blogpost.