In the past few weeks, it has been a mess again at the publicly owned limited corporations in the Dutch Caribbean. In St. Maarten, GEBE supervisory directors are fighting with their shareholder in various preliminary injunction proceedings. In Aruba, the WEB directors were given a golden handshake. In Curacao, we have barely recovered from the chaotic course of the appointment procedure of supervisory directors at the Central Bank or at RdK, the shareholder passes a resolution of no-confidence in the sole director and in the supervisory directors.
What is the underlying problem?
For most governments, it is hard to swallow the fact that they are coming to power whilst people with a different political persuasion are occupying important positions in the semi-public sector. It is then very tempting to be at the controls to get rid of these people. What controls are available?
- Just wait. The term of office of every director and supervisory director is limited. After a few years, they must be reappointed. It is quite simple to forego this reappointment and then put your “own” people in their place. There are two caveats to this. These ‘own’ people must also keep the interests of the corporation in mind and not be guided by the party-political interests of a sitting government. Secondly, it is not always in the interest of the organization to replace (well-functioning) directors and/or supervisory directors.
- Dismiss. This has often happened in the past with changes in government. The mandatory review by SBTNO makes this more difficult now. Moreover, if it is patently obvious that there is a political background for the dismissal, then the judge will prevent it.
- Pass a resolution of no-confidence. This trick has recently been used at RdK. The hope is that the director and/or supervisory directors in question will feel that they cannot do their job properly without the confidence of the shareholder and will then resign of their own accord. That would be easy. There are also several caveats to this. First, a shareholder passing a resolution of no-confidence has no legal effect. This will have to be followed by a suspension and/or dismissal. This should not be done arbitrarily. There must be reasons for it. These can be assessed on their legitimacy in a court of law. Secondly, certainly in the situation where a resolution of no-confidence is passed in the director and all the supervisory directors simultaneously, it would be an awfully bad thing if these persons were to resign with immediate effect. The organization is then literally rudderless. Therefore, as was the case with RdK, they will have to give the shareholder the opportunity to find a suitable replacement during a transition period, based on their own responsibility for the continuity.
- Bully. Adjourning shareholder resolutions, not allocating a bonus, anything is conceivable.
What works best?
If you want to do the right thing, you just let well-functioning directors and supervisory directors continue their work. After their term expires, you can appoint someone else with the same or better qualifications. Note that once political friends have been appointed, they may only pursue the interest of the organization and not the political interest of the government that appointed them. However, new directors and supervisory directors often dance to the tune of the political party that appointed them. The crux of the story, then, is the entanglement of politics with government-affiliated organizations. The only way to break away from this is to actually distance politics, for example, through an umbrella holding corporation. Governments must confine themselves to determining the broad outlines of policy.
Ironically, this is the very thing they are not doing. Hence, a mess.