Raphael John-Lall

For­mer ex­ec­u­tive chair of Cli­co, Claire Gomez-Miller, be­lieves that while each com­pa­ny has its own pro­ce­dures, di­rec­tors at state-owned com­pa­nies are free to re­sign af­ter a change of gov­ern­ment, but she does not rec­om­mend “mass res­ig­na­tions” at state boards.

Gomez-Miller has more than 30 years’ in­ter­nal au­dit­ing, risk man­age­ment and gov­er­nance ex­pe­ri­ence in state and pri­vate or­gan­i­sa­tions with­in the en­er­gy, in­sur­ance and fi­nan­cial sec­tor at se­nior ex­ec­u­tive and board lev­els. She is a char­tered cer­ti­fied ac­coun­tant and cur­rent­ly serves as man­ag­ing di­rec­tor of British Amer­i­can In­sur­ance Com­pa­ny Trinidad (BAT).

She spoke at a we­bi­nar host­ed by the Caribbean Cor­po­rate Gov­er­nance In­sti­tute (CC­GI) on May 8 on the top­ic of ‘Tran­si­tion­ing of State Boards Un­der New Gov­ern­ment Ad­min­is­tra­tions.’

Since the new Unit­ed Na­tion­al Con­gress (UNC) Gov­ern­ment took of­fice ear­li­er this month, di­rec­tors of ma­jor state en­ter­pris­es have been ten­der­ing their res­ig­na­tions.

Guardian Me­dia re­port­ed last Thurs­day that the chair­man and board of di­rec­tors from the ma­jor­i­ty State-owned Telecom­mu­ni­ca­tions Ser­vices of T&T (TSTT) and its whol­ly owned sub­sidiary, Am­plia, all re­signed.

Gomez-Miller said it is up the di­rec­tors to make in­di­vid­ual de­ci­sions.

“We come back to the ques­tion, should di­rec­tors ten­der their res­ig­na­tions up­on a change of gov­ern­ment? In­di­vid­u­al­ly as a di­rec­tor, you would be act­ing in ac­cor­dance with that gov­ern­ing leg­is­la­tion that formed your or­gan­i­sa­tion which would state that you have the right to ten­der your res­ig­na­tion at any point in time.

“I per­son­al­ly will not pro­mote the in­stan­ta­neous mass res­ig­na­tions of di­rec­tors. I do not rec­om­mend that pri­mar­i­ly from the per­spec­tive of the fidu­cia­ry du­ties of those mem­bers of the board. How­ev­er, if you de­cide you re­al­ly want to ten­der your res­ig­na­tion, at that point in time then do con­sid­er an un­dat­ed res­ig­na­tion let­ter. Un­dat­ed res­ig­na­tion let­ters mean you have ten­dered your res­ig­na­tion how­ev­er the date can be left to the min­is­ter, the Cor­po­ra­tion Sole at his con­ve­nience.”

Gomez-Miller said that what­ev­er de­ci­sions are made, man­age­ment must look at what is in the com­pa­ny’s best in­ter­est, so that there will be “min­i­mal dis­rup­tions.”

“I would look at the fidu­cia­ry du­ties of the board as it re­lates to the ex­pec­ta­tion and the le­gal re­quire­ment that they should al­ways act in the best in­ter­est of the com­pa­ny. That means whether it is a state-owned board, pri­vate board or NGO board. So, the fidu­cia­ry du­ties would in­clude en­sur­ing that all times the or­gan­i­sa­tion con­tin­ues its le­git­i­mate busi­ness with min­i­mal dis­rup­tions of its over­sight and op­er­a­tional ac­tiv­i­ties,” she said.

One of the re­spon­si­bil­i­ties of state com­pa­ny board is to en­sure the prop­er man­age­ment of the risk of busi­ness dis­rup­tion, she said.

“In do­ing so, any ac­tion that is tak­en by the board or even the in­di­vid­ual di­rec­tors must be weighed against that fidu­cia­ry du­ty,” said Gomez-Miller.

What­ev­er de­ci­sions are tak­en, she urges board mem­bers to be pro­fes­sion­al.

“If it is that we are act­ing from the po­si­tion of pro­fes­sion­al­ism, then we would want to re­move the emo­tions in a sit­u­a­tion as such. Al­so the prece­dence that would have been set in the past his­to­ry in a lot of our na­tions where au­to­mat­i­cal­ly there is a change of gov­ern­ment, state com­pa­ny di­rec­tors ten­der their res­ig­na­tions.”

She al­so ad­vis­es that in man­ag­ing that risk of dis­rup­tion in the or­gan­i­sa­tion, there should an or­der­ly way in which pro­ce­dures are fol­lowed.

“As to what those ac­tions would be, it all de­pends. It de­pends on if the board com­pris­es po­lit­i­cal ap­pointees such as per­sons ap­point­ed by the po­lit­i­cal par­ties. So, if you know that your in­stru­ment was one that was based on the di­rect ap­point­ment or se­lec­tion of your ap­point­ment to a board of an or­gan­i­sa­tion and that right was giv­en from the po­lit­i­cal par­ty, then of course you are a po­lit­i­cal ap­pointee and as such you should ten­der your res­ig­na­tion.

“How­ev­er, if you are an ap­pointee who was se­lect­ed in ac­cor­dance with the or­gan­i­sa­tion’s gov­ern­ing leg­is­la­tion, be it un­der an act or com­pa­ny reg­is­tra­tion, that ap­point­ment is made by the gov­ern­ment or the state, then you are a state-ap­point­ed di­rec­tor. You are po­lit­i­cal­ly ex­posed- and I know a lot of us do not like to hear that-be­ing po­lit­i­cal­ly ex­posed but you are a po­lit­i­cal­ly ex­posed per­son by virtue of your ap­point­er. That is the Gov­ern­ment mean­ing the state.”

She added that glob­al cor­po­rate gov­er­nance stan­dards are al­so de­mand­ing that state-ap­point­ed boards be in­de­pen­dent.

“I am speak­ing specif­i­cal­ly now from the prin­ci­ples of cor­po­rate gov­er­nance for state-owned or­gan­i­sa­tions that was pub­lished in 2015 by the Or­ga­ni­za­tion for Eco­nom­ic Co­op­er­a­tion and De­vel­op­ment (OECD). The OECD felt that it was nec­es­sary to es­tab­lish those prin­ci­ples of cor­po­rate gov­er­nance for state-owned or­gan­i­sa­tions try­ing to en­force gov­ern­ments glob­al­ly to adopt cer­tain stan­dards that al­low for in­de­pen­dent board ap­point­ments. So, you ought not to have po­lit­i­cal ap­pointees on your board, you ought to have in­de­pen­dent ap­pointees notwith­stand­ing that they maybe rep­re­sent­ing the in­ter­est of var­i­ous non-po­lit­i­cal par­ties. For ex­am­ple, you may have the trade unions be­ing rep­re­sent­ed on the board as key stake­hold­ers,” said Gomez-Miller.

Re­gion­al is­sue

Se­nior di­rec­tor, pub­lic bod­ies gov­er­nance at Ja­maica’s Min­istry of Fi­nance, Taneisha Camp­bell, who al­so spoke, said the we­bi­nar fa­cil­i­tat­ed a time­ly con­ver­sa­tion as it was im­por­tant for the con­ti­nu­ity of pub­lic gov­er­nance not on­ly in T&T, but across the Caribbean re­gion.

“It is im­por­tant in Ja­maica where we are in an elec­tion year and we are mov­ing clos­er to that time­line in Sep­tem­ber when we will be go­ing to the polls. Of­ten times when we hear board tran­si­tions it is usu­al­ly syn­ony­mous with a change of gov­ern­ment but it is not al­ways a change of gov­ern­ment that al­lows for a tran­si­tion of boards.

“In the con­text of Jam­i­ca when there is change of gov­ern­ment and a change of min­is­ter the tran­si­tion takes place. Usu­al­ly, the new gov­ern­ment wants to chart its own course and choose their in­di­vid­u­als who are as­signed to lead in the var­i­ous ca­pac­i­ties. Then the board mem­bers are ex­pect­ed to im­me­di­ate­ly to ten­der their res­ig­na­tions.”

She said while board tran­si­tions are an im­por­tant part of democ­ra­cy, it must be done in a way where stake­hold­ers are up­hold­ing in­tegri­ty and in­sti­tu­tion­al sta­bil­i­ty and where good gov­er­nance is pre­served.

“We are en­sur­ing that our pub­lic in­sti­tu­tions are still be­ing main­tained in a way where it will help achieve its strate­gic ob­jec­tives in the medi­um to long term as well as to con­tribute to na­tion­al de­vel­op­ment.”