Good Corporate Governance @ PJIA-companies

 

By Franklyn Richards

Good Corporate Governance @ PJIA-companies

The article in The Daily Herald of St. Maarten of December 4, 2024: “PJIAH asserts Government has no role to play in CEO selection for PJIAE” prompts one to check what are the rights of the shareholder.

According to rules and regulations (civil code book 2 of St. Maarten, articles of incorporation, jurisprudence) the rights of the shareholder (government or private sector) are:

Issuing additional shares, Reducing the share capital; Adopting the annual accounts; Distribution of dividend; Amendments to the articles of incorporation; Appointment or dismissal of directors; Mergers or demergers; Dissolution of the company; Major investments; Advisory vote.

The structure of the operations @ PJIA consists of 2 companies, namely the PJIAH and the PJIAE. The shareholder of PJIAH is Government and the shareholder of PJIAE is PJIAH.

In the case of the appointment of the CEO of the PJIAE the shareholder which is the PJIAH (consisting of the supervisory board of directors and the CEO (Mr. Perry Wilson) by means of a shareholder meeting called by PJIAH as shareholder of PJIAE has the right in accordance with the rules and regulations and not Government to appoint the CEO of PJIAE!

Relevant support to the above is found in a recent case with respect to PJIAH/PJIAE, SXM202100563/ KG 2022/102, ECLI:NL:OGEAM:2021:54.

For brevity I refer specifically to section 4.16 which freely translated reads as follows:
“In addition, the Court considers the following. The board must perform its tasks independently and autonomously. The AGM of a legal entity is not authorised to give specific instructions to the board without a statutory basis. This basis cannot be found in the articles of association of the Operating Company, nor in the provision of article 7 paragraph 1, second paragraph. In addition, the board retains its own responsibility at all times and must assess for itself whether instructions are in the interest of the company and the associated company and whether instructions must be implemented. The Supervisory Board must also focus on the interests of the legal entity and the associated company. The interest of the shareholder is only one of the many interests that the board and the Supervisory Board must safeguard. Instructions from the shareholder that conflict with the interests of the company and the associated company must be ignored by the board.”

Conclusion: The above mentioned and case law support the claim with respect to the autonomy of the supervisory board and the Director of PJIAH and the limited role of the shareholder in operational matters.

In short:
In accordance with good corporate governance the Government other than being informed by the PJIAH has no role in the appointment of the CEO of PJIAE!

Source Mr F. Richards linkedin page