Published On: Mon, Jul 22nd, 2013

Board of Supervisors, you are warned (cont.)

Etienne YsThe Court has ruled on 15 July of this year, at the request of the Public Prosecutor (hereinafter OM), to appoint a committee to investigate (civil survey) the policy and affairs of Aqualectra, Curoil and Curacao Refinery (RDK) after 10 - 10 - 10 (article 2:271 paragraph 1).

The Court held that there are reasonable grounds to doubt a correct policy at Aqualectra, Curoil and RDK (see in this connection 2:274 Art. Paragraph 1).

The organizations within these companies have, according to the Court, not always adhered to the following principles:

- The Management Board, Supervisory Board and Shareholders must adhere to the rules of Book 2 of the Ordinance and the Code of Corporate Governance;

- Each of these three bodies should remain within the limits of their authority and give the same space to other bodies;

- For Management and Supervisory Board, the interest of the corporation is important;

- The management must exercise its task with some autonomy. This independence should not be restricted or largely deprived by legal or statutory actions;

- The Shareholders and the Supervisory Board cannot just usurp management tasks;

- The Management is primarily responsible for the strategy and policy;

- In a conflict (with opposing interests) between for example (representative of) the shareholder and the company, the shareholder should keep distance in the decision-making process within the company. It is expected of the shareholder that it is committed to unite these opposing interests. Also interesting are some considerations that the Court has used in the handling (inadmissible) of the OM’s request

- That Fundashon Akshon Sivil (hereinafter FAS) can be considered a stakeholder within the meaning of Art. 2:272 paragraph 2 point A, and

- That this constitutes "the public interest" making it possible for the prosecution to file a request for a civil survey on its own initiative, even without a petition of an interested party.

I hope that the judgment of the Court on the admissibility of both FAS (and other civil initiatives) as the OM continues to encourage to stay vigilant for possible malpractices within our public limited companies and foundations (hereinafter NV’s and Ost's).

It did not actually have to come this far if the Government and Parliament had assumed their responsibility and have noted the appearance of mismanagement within these NV's. According to art. 3 of the Ordinance on Corporate Governance, the Government should ensure that companies comply with the principles and provisions of the Code of Corporate Governance.

If the investigation shows that there has been mismanagement, this can be established (Article 2:282 paragraph 1) by a ruling of the Court. If the misdeeds have caused damage to the company, then this report can help with the assumption of liability of the perpetrators. I hope that the Government and Parliament really ensure that the perpetrators are effectively addressed.

I also hope that this ruling of the Court has a preventive effect on other NV’s and Ost's.

Supervisory Board, you have been warned!

Etienne Ys
Former Prime Minister of the Netherlands Antilles

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