Frank Kunneman discusses challenges and remedies regarding corporate governance during opening academic year UoC


9 September 2014

Prof. dr. Frank Kunneman, managing partner of VanEps Kunneman VanDoorne, was the guest lecturer to open the academic year of the University of Curacao this year.

The opening event took place on Friday 5 September, and the central theme of his keynote speech was the question whether corporate governance - the whole of processes and bodies that rule and control organizations - is 'ours'. It's a question that cannot easily be answered with 'yes' or 'no', although the final conclusion of the lecture was that corporate governance indeed matters to us all. This is however not yet thoroughly realized, nor translated into actions.

According to Kunneman, corporate governance is especially relevant for government entities, financial institutions, family businesses and for small and medium enterprises (SME). Each of these three sectors have their own regulatory framework, but they all have to deal with requirements regarding integrity, transparency, accountability and correct checks and balances. The necessity for these demands is explained by Kunneman with a calculation made by the OECD, that announced this year that over 5% of the global gross national product (USD 2.6 trillion) is wasted by corruption.

The fact that corporate governance is not yet sufficiently sensed and converted into actions, can be explained by multiple challenges. For instance, the political guidance of governmental entities is not yet sufficiently thought through and formalized. The globally increasing regulation as a result of the different economic crises is the most important challenge for financial institutions. They experience this regulation as a stranglehold.

Kunneman does not just point at challenges but also proposes solutions, which will have to be found in the golden mean. Financial supervision is necessary, but overregulation should be out of the question. This can be brought into practice by, for example, light versions of the Code Corporate Governance for smaller government entities and SME, and the implementation of so-called fit-and-proper tests as used by financial institutions for (larger) government entities. In that regard, the parliament should take a larger responsibility, states Kunneman at the closing of his lecture.