Four years ago (July 2013), the Court decided to appoint Huub Willems as an investigator to review the policies and state of affairs at the government entities IUH (Aqualectra), Curoil and RdK. The process that was implemented at the time, consists of three steps. Willems’ investigation is step one. He came to the conclusion that the government entities in question had been mismanaged. Taking that first step took three years. That is way too long, but better late than never. Subsequently the Court ruled on Tuesday 13 June 2017 that mismanagement has indeed taken place. That is step two. The third step is that the people responsible for that mismanagement will be held liable. Will this third step now be taken?

The Court (only) holds the bodies of those entities accountable for the mismanagement. These are the general meeting of shareholders (in this case represented by the then prime minister), the supervisory board and the management board. It is remarkable that the Court deliberately doesn’t name individuals or holds them accountable. In the ruling all ‘stakeholders’ are denoted by a number, although it’s not very hard to find out which person is hiding behind what number. Does this mean that on the basis of this ruling these individuals can’t be held liable? Absolutely not.

Simply put, the Court finds that the inquiry process is better suited to assess the policy of the company’s bodies than that of individuals. If those bodies have been mismanaged, it’s up to those that have suffered damage (i.e. the companies themselves) to hold the individuals who have caused the damage liable. The good thing is that the Court’s ruling contains a very detailed motivation. It meticulously explains that and how all bodies of both Aqualectra and RdK have made a mess of it, to put it simply. This makes it quite easy to personally hold people who were part of those bodies liable in a separate procedure.

The Court’s ruling can be seen as a cross that has put the ball right in front of the goal. All you have to do is score. How? Well, there still is a bit of a problem there. After all, in first instance the directors of these government entities must determine if the company will take steps to recover the damage. However, those directors may have been involved directly or indirectly in the mismanagement themselves. In such a case of conflict of interest, the supervisory board could and should take the initiative. If, on the basis of the results of the investigation, the supervisory board doesn’t consider itself completely unbiased either (after all, each of the companies’ bodies was involved), it’s up to the shareholder of Aqualectra and RdK (represented by the current government) to make a recommendation to the directors of these companies. They should do (or commission) an investigation into the extent to which the (ex) directors and (ex) supervisory board members involved can be held liable based on the Court’s ruling of 13 June.

The objective is not to nail people to the cross. However, he who deliberately ruins a public company must be held accountable for his actions. From the viewpoint of good corporate hygiene and mature governance it is simply necessary that all stakeholders in government entities are fully aware that they should not put political and/or personal interests above those of the company and that if they do, they’ll have to justify their actions. Failure to take step three would confirm the existing feeling that ‘you’ll get away with it anyway’. Who is left to pick up the pieces in that case? Exactly: Curaçao. All of us. So take that third step!

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.

The third step is that the people responsible for that mismanagement will be held liable. Will this third step now be taken?

Related article