The law applies to everyone, at least, that is what one would think. However, it is not true. The law does not always apply to everyone and in the same way. Let’s take the National Ordinance Corporate Governance (NOCG) as an example. This ordinance does not apply to government entities such as state-owned corporations and public foundations (Aqualectra, Curoil, FKP etc.).

This sounds a little odd, but this is how it works: the NOCG applies to the government of Curacao in its capacity of stakeholder in a corporation or foundation. The NOCG doesn’t apply to the government entities (such as a corporation, for instance Curoil itself), but to the shareholder. The government regularly has to make decisions as shareholder. For instance, you can think of decisions on appointment and removal of managing directors or supervisory directors, or of decisions on participating interests in other companies. The NOCG provides instructions on how the government has to exercise its shareholder’s rights in such cases.

Obligations NOCG for government as shareholder
Four important elements have been included in the NOCG. 1. The government has to draw up a Code Corporate Governance. 2. As shareholder, the government has to ensure that the Code Corporate Governance is implemented in state-owned corporations. 3. A Corporate Governance Advisor (CG Advisor) has to be appointed. 4. For certain shareholder’s decisions, the government has to request prior permission from the CG Advisor.

The corporation itself is not involved in this at all. Only the government in its role of shareholder has to comply with aforementioned obligations. This is also the reason why advice on appointment or removal of a managing director is not submitted to the CG Advisor by the management board of the (state-owned) corporation but by the shareholder, the government. The CG Advisor actually has nothing to do with the state-owned corporation itself.

The above has significant consequences. As a result, the Code Corporate Governance (Code CG) does not automatically apply to all government entities. The Code CG only applies to a state-owned corporation if the government as shareholder has amended the articles of incorporation in such a manner that they stipulate that the Code CG applies (see point 2 above). For some government entities this has not happened yet. The UTS articles of incorporation date back to 1995, for instance. Those articles of incorporation do not contain any provision concerning the Code CG. As a result, the code is not applicable at UTS. However, the management board and supervisory board of UTS have decided to voluntarily act in accordance with the Code CG. But this has no basis in the articles of incorporation, nor does it have a legal basis.

The above has even more consequences. If the government holds less than half the shares in a corporation, the government consequently cannot force application of the Code CG in that corporation. After all, if the other (majority) shareholder does not want to, the articles of incorporation will not be amended. In that case, for that matter, the NOCG always continues to apply to the government as (minority) shareholder in that corporation. For instance, if a supervisory director has to be removed, the General Meeting of Shareholders has to decide on it. In this example, one shareholder (the government) has to seek advice from the CG Advisor before being able to vote, whereas the other shareholder can vote at its discretion. If the government then wants to proceed to removal and the other (majority) shareholder does not want to, it does not happen.

It is even more complicated for foundations. A foundation does not have shareholders. The NOCG determines when the a foundation is one in the sense of this national ordinance (Article 1). A public foundation is a foundation where the government has the right to appoint one or more directors or has the power to amend the bylaws. If the government only has a minority on the board, the NOCG and Code CG can only be implemented in that foundation if the other directors also approve it. If the other directors do not want the NOCG and Code CG, it will not be introduced in the foundation. It is as simple as that. So in that case this law does not apply to that foundation.

Do you have a question about corporate governance yourself? Please e-mail it to and perhaps your question will be discussed in the next blogpost!