Executive Council acts against the law

“There is a legal procedure for dismissal of directors which has to be observed. Dismissal is not possible just like that.”

This is the comment of Mayesi Hammoud, working with VanEps Kunneman VanDoorne, on a letter of the new Executive Council (EC) of MFK/PS/MAN in which supervisory directors and members of the Management Boards or Supervisory Boards of public corporations and foundations are notified of their dismissal as supervisory director or member of a Supervisory Board.

“First, the question is whether the EC can decide to dismiss directors of public corporations, as the shares of the public corporations are formally still held by “StIP” (Foundation Implementation Privatization).”

Hammoud also refers to the Island Ordinance Corporate Governance. Article 10 hereof stipulates that if dismissal of a director (such as a managing director, member of a management board, member of a supervisory board, or a similar body of a foundation) is decided on by or on behalf of the EC, the EC has to report its intention to proceed to dismissal to the consultant corporate governance. This consultant – in this case for the time being still “Stichting Overheids Accountantsbureau SOAB” until “Stichting Bureau Toezicht en Normering Overheidsentiteiten SBTNO” is ready for it – subsequently has to advise the council in writing on the intended dismissal within four weeks upon receipt of a report of the EC.

Hammoud: “The advice of the consultant has to address the question whether the intended dismissal meets the applicable rules, the Corporate Governance Code, and the Articles of Incorporation of the corporation or foundation and the question whether the corporation or foundation can arrive at dismissal in reason based on the arguments raised for the intended dismissal.”

If the EC subsequently makes a decision deviating from advice from the consultant stating that there are important objections to the dismissal, the EC promptly has to report it to the consultant supported by reasons.

The lawyer: “The Island Ordinance does not contain sanctions for not observing it. However, imposing sanctions is done through the Civil Code because not observing the regulations as contained in the Island Ordinance may lead to invalidity or voidability of inter alia resolutions to appoint and dismiss directors.”

Code applies since financial year 2009

It can be derived from the list of resolutions of the political Steering Group Political Changes Netherlands Antilles that convened on January 22, 2008 in St. Maarten that an understanding has to be provided of existing regulations concerning corporate governance and that new regulations for corporate governance would be developed, if necessary, regulating at any rate: (I) procedures for alienation and acquisition of participations, (II) guidelines for the dividend policy and (III) procedures and requirements concerning the appointment and dismissal of directors.

There is a State Ordinance Corporate Governance and an Island Ordinance Corporate Governance. “The content of both ordinances is almost identical.” 

The Island Decree Code Corporate Governance Curaçao (the “Code”) was adopted by the EC on October 28, 2009. The Island Decree came into effect as per January 1, 2010. The Code itself states that the code will come into effect as of the financial year 2009 and that corporations have to do everything in their power to comply with the principles and provisions hereof as soon as possible.

The Island Ordinance stipulates that an expert organization, being the consultant code corporate governance, is designated for advice. A foundation has already been established – “Stichting Bureau Toezicht en Normering Overheidsentiteiten” (SBTNO) – which has to act as consultant. “This foundation has not been fully implemented as yet, however,” the lawyer says. “Consequently, as we understand, the “Stichting Overheids Accountantsbureau” (Soab) is charged with the tasks of the consultant as referred to in the Island Ordinance.”

Hammoud: “The advice of the consultant corporate governance is public. The advice is published on the consultant’s website and open for inspection at the consultant’s offices. One can also apply for a copy of the advice with the consultant.”

The Island Ordinance also contains rules for the appointment of directors, for that matter. Also if the EC wants to proceed to appointment of directors, first the advice of the consultant corporate governance has to be sought. Directors to be appointed have to meet a profile. Thus, there are more matters to be taken into account at present within the framework of corporate governance.

Source: national newspaper “Antilliaans Dagblad” dated 13 September 2010