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25 November 2019

The board of the foundation Effective Curacao resolved in its meeting of September 17 to appoint you as a board member. Does that make you a board member? No. You still need to accept the appointment. This can be done in various ways.

It can be done orally. You receive a call about the appointment and you say: ‘How nice! Wonderful!’. Your appointment is then a fact. Acceptance can also take place in writing, for instance by email or in an app. It can even be done in advance when you were sent an email with the announcement that the board would like to see you joining the board and you react positively to this invitation. You have then already agreed in advance and you then immediately become a board member at the time of the board resolution. The acceptance can also take place tacitly, for instance when you heard that the resolution to appoint you to the board was adopted and you subsequently attend the first following board meeting. Through this act (by sitting down at the table) you tacitly accepted the appointment resolution. You can never be appointed in a board position if you did not want this yourself.

“It may also be that precisely the invalidly cast vote of the fake director is decisive for the decision-making. As an organization you are then heading towards a direction that is, from a legal perspective, literally unfounded”

In case of resignation it is even easier. Resignation is a so-called unilateral legal act. When you say to your fellow board members that you resign as a board member with immediate effect then exactly from that moment you are no longer a board member. The resignation does not need to be accepted by the board to be legally valid. It does not require a separate board resolution. You resigned and that is it.

The registration with the Chamber of Commerce is irrelevant to the question whether you were appointed or resigned. It is, however, relevant to the question if and when others can assume that you became a board member or resigned. It is therefore recommended that immediately after your resignation you cancel your registration with the Chamber of Commerce. Otherwise others may wrongly believe that you are still authorized to act as a board member and you may expose yourself to liability.Sometimes appointments are for an open term. If the articles of incorporation do not include an age restriction then you are consequently a board member for life. This is not desirable. Good Corporate Governance includes giving account, accountability. By restricting the term of appointment a moment of assessment has, by definition, been included. The appointing body then has the possibility of not renewing the appointment. You can get rid of a board member without having to rely on the draconic measure of dismissal.

As the board you should, of course, pay proper attention to these time limits. This is not always the case in our country. All sorts of resolutions are then adopted where the director (sometimes even plural) – meanwhile formally no longer in office – enthusiastically joins the meeting. And also participates fully in the decision-making. If this is the case then as the board you created your own time bomb. Namely, resolutions are adopted that may be nullified in court, for instance because afterwards the required quorum appeared to be absent (after all, one or more directors were actually not appointed and are therefore not a board member). It may also be that precisely the invalidly cast vote of the fake director is decisive for the decision-making. As an organization you are then heading towards a direction that is, from a legal perspective, literally unfounded. These kinds of instances can, however, be remedied afterwards through ratification.

Why make things difficult if it can be done easily? It is easier to keep track per board member when he or she was appointed and when the term of appointment expires. A few months in advance you can then assess whether reappointment is desirable and to set the correct procedure in motion. Simple but effective.

This blogpost is also available in Papiamentu. Download the PDF version. You can also download the English PDF version.

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