Confidentiality in Curacao. Well, Arthur Donker would say, “Never a dull moment on this rock!” I have heard people say that in some circles in Curacao really confidential documents are deliberately not stamped with that word in the left top corner. For the specification “Confidential!” would be the best guarantee for very fast distribution.
There is an interesting field of tension here. Publicity and transparency are unconditionally linked with democracy and healthy economic and social development. Confidential documents belong to backrooms and intrigue. Yet, it is not as simple as that. In some cases confidentiality, albeit temporary, is functional and necessary. Everyone knows it from his own experience, both private and in business. When you are pregnant, you often wait a while with the announcement, for it could still go wrong in the first few months. When you tell a friend about problems in your marriage, you do not want him to post it on Facebook immediately. Two companies negotiating on a possible merger do not want it to be common knowledge just yet. If the negotiations would fail, both companies would suffer major and unnecessary damage. And everyone understands that the secret service can only do its work based on confidentiality. If not, it would not be the secret service but the public service. And this also has a boundary. We have seen so with (illegal?) publication of illegal activities of reputable countries. In short, as I said, the term “confidentiality” creates an interesting field of tension, just like it does in corporate governance.
Political background and confidentiality
Notably with the government entities in Curacao we notice regularly that the supervisory directors are also selected based on their political background. The governing political parties of that time determine who the supervisory directors are, because their representatives in the government are also representatives of the shareholder in those government entities. And the shareholder appoints the supervisory directors. That’s why. There is much to comment on here, which I will do some other time. Now we are talking about the phenomenon of confidentiality.
Is a supervisory director appointed by the shareholder, who, in turn, represents a political party himself, allowed to pass confidential information obtained as supervisory director on to this shareholder/political party? The short answer is no. Perhaps there is a field of tension here from a political perspective, but there isn’t from the perspective of the company’s interest.
Both the law and the Code Corporate Governance assume that a supervisory director fulfills his duties independently. Even if he has been appointed by or on behalf of a political party, he still has to fulfill his duties without instructions. The interest of the company is his guideline. If the interest of the company requires confidentiality, the supervisory director has to respect and guarantee this confidentiality. If he doesn’t, he can even be held liable by the company.
It is possible that a supervisory director does not always know whether or not information has to be treated confidentially in which case. Perhaps he is not a very smart supervisory director, but that is a different issue. It is good to provide this clarity immediately when the supervisory director is appointed. This can be done simply and effectively by including in the agreement for services that the supervisory director concerned has to treat all information he obtains on account of his position confidentially. It is also good to include this rule in the Regulations for the Supervisory Board. It does not provide a guarantee, but it does provide clarity.
Do you have a question about corporate governance yourself? Please e-mail it to email@example.com and perhaps your question will be discussed in the next blogpost!