Beyond the Charter: Building Stronger Government-Owned Companies Through Good Governance

A constructive response to Regina Labega’s Tribune article, “Write It Into the Charter: Why Socio-Economic Obligations Belong in the Articles of Incorporation of St. Maarten’s Government-Owned Companies” (The Tribune, 3 July 2026).

Franklyn Richards LL.M. is a corporate governance legal advisor, former Lieutenant Governor of St. Maarten, and has advised governments and government-owned entities throughout the Dutch Caribbean on corporate governance, public administration and government-owned enterprise reform. The views expressed in this article are his own.

Ms. Regina Labega deserves credit for stimulating an important national discussion about the future governance of St. Maarten’s government-owned companies. Her recent Tribune article rightly argues that companies such as NV GEBE, TelEm Group, Port St. Maarten and Princess Juliana International Airport Operating Company have socio-economic responsibilities that should endure beyond changes in governments, ministers and management.

I share that objective.

Indeed, I agree that the Articles of Incorporation of our government-owned companies should clearly reflect their public purpose and the responsibilities they owe to the people of St. Maarten.

Where I respectfully differ is not with the objective, but with the proposed solution.

Embedding socio-economic obligations in the Articles of Incorporation is an important step, but it is only one part of the solution. If we truly want stronger, more resilient and better-performing government-owned companies, we must look beyond the charter and strengthen the entire corporate governance framework within which these enterprises operate.

The real question is not simply what is written in the Articles of Incorporation. The real question is whether Government, as shareholder, together with the Supervisory Boards and Management Boards, consistently fulfil their respective responsibilities in accordance with the law and the principles of good corporate governance.

No matter how well drafted the Articles of Incorporation may be, they cannot replace sound leadership, professional oversight, accountability, transparency and responsible stewardship.

More Than Ordinary Companies

Government-owned companies are sometimes viewed as private companies whose shares happen to be owned by Government.

That is an incomplete picture.

These enterprises were established because they perform essential public functions. They generate electricity, deliver drinking water, provide telecommunications, operate our airport and harbour, and maintain the infrastructure upon which our economy, tourism industry, businesses and daily lives depend.

Their purpose is therefore twofold.

They must operate efficiently and remain financially sustainable while at the same time safeguarding the public interest by providing reliable, affordable, resilient and sustainable essential services.

Neither objective can exist without the other.

A profitable utility that fails to deliver reliable electricity or drinking water is failing its public mission. Equally, a company that neglects financial discipline ultimately jeopardizes its ability to continue serving the public.

“Good corporate governance is about maintaining that balance.”

The Legal Foundation Already Exists

Book 2 of the Civil Code of St. Maarten already provides the legal framework for the governance of companies. The Articles of Incorporation establish the constitutional foundation of each enterprise by defining its objects, governance structure and the respective powers of the Managing Board, Supervisory Board and General Meeting of Shareholders.

The Articles should therefore contain the company’s public mission, governance principles, accountability mechanisms, reporting obligations, internal control framework, enterprise risk management principles and the strategic matters requiring shareholder approval.

However, Articles of Incorporation are intended to provide institutional stability. They should establish enduring constitutional principles rather than detailed operational policies that may change as economic circumstances, technology and public priorities evolve.

That is why good corporate governance depends upon more than the Articles alone.

Government Has Responsibilities Too

Public debate often focuses on what government-owned companies should do better.

Far less attention is paid to the responsibilities of Government itself.

Government does not manage these companies. Nor should it.

Under Book 2 of the Civil Code and the principles of good corporate governance, day-to-day management belongs to the Managing Board under the supervision of the Supervisory Board. Government’s responsibility is to act as a responsible, professional and consistent shareholder.

That means defining the public interest each company is expected to serve, establishing long-term policy objectives, adopting a coherent Government Ownership and Shareholder Policy, appointing qualified Supervisory Board members through transparent and merit-based procedures, approving strategic decisions where required by law or the Articles of Incorporation, monitoring corporate performance and holding Boards accountable for results.

Above all, Government must exercise its shareholder role consistently rather than politically.

Government-owned companies cannot perform effectively if strategic priorities shift with every election cycle or if political considerations replace sound governance principles.

The Articles Are Only the Beginning

Including public-interest obligations in the Articles of Incorporation is both sensible and desirable.

Modernized Articles should expressly recognize responsibilities relating to:

• continuity of essential public services;
• disaster preparedness, business continuity and climate resilience;
• infrastructure development;
• environmental sustainability;
• affordability of essential services where appropriate;
• sound corporate governance;
• transparency and accountability;
• effective risk management; and
• contributing to the country’s long-term socio-economic development.

However, the Articles should establish constitutional principles rather than regulate day-to-day management.

Matters such as local employment strategies, training and development policies at all levels of the organization, procurement policies, dividend expectations, investment priorities, and other evolving public policy objectives are generally better addressed through a Government Ownership and Shareholder Policy, legislation, concession agreements, performance agreements and board regulations. These instruments provide the necessary flexibility to respond to changing national priorities without repeatedly amending a company’s constitutional framework.

In other words, St. Maarten does not need to choose between stronger Articles of Incorporation and stronger shareholder policy.

It needs both.

A Practical Roadmap for Reform

Rather than limiting the discussion to amendments of the Articles of Incorporation, Government should seize this opportunity to modernize the governance framework of all government-owned companies.

The first step should be the adoption of a comprehensive Government Ownership and Shareholder Policy applicable to all government-owned companies. Such a policy should clearly define why Government owns each enterprise, the public interest each company is expected to protect, Government’s expectations regarding financial performance and public service delivery, dividend policy, capital investment, sustainability, affordability of essential services, local capacity development, succession planning and reporting obligations.

Unlike the Articles of Incorporation, a Government Ownership and Shareholder Policy can evolve as national priorities change without requiring constitutional amendments to each company.

Secondly, Government should conclude multi-year Performance Agreements with each company. These agreements should translate shareholder policy into measurable objectives, key performance indicators, investment priorities, resilience requirements and service quality standards while fully respecting the statutory autonomy of the Managing Board.

Thirdly, shareholder reporting should be standardized. Quarterly reports should address financial performance, operational results, strategic projects, enterprise risks, cybersecurity, regulatory compliance, business continuity, capital investments and progress toward agreed public policy objectives. Timely information enables the shareholder to identify emerging risks before they become national crises.

Government should also establish a State-Owned Enterprises Governance Unit to coordinate shareholder activities, support ministers in exercising their shareholder responsibilities, monitor governance performance, maintain institutional knowledge and promote consistency across all government-owned companies.

In addition, Government should establish a Centralized State-Owned Enterprises Register together with an Annual State Ownership Report covering all government-owned companies. The register should provide a complete overview of Government’s ownership interests, while the annual report should present, in a transparent and accessible manner, each company’s public mandate, governance structure, board composition, financial performance, major strategic investments, principal risks, compliance with the Corporate Governance framework and progress toward achieving agreed public policy objectives.

Such reporting would strengthen transparency, improve parliamentary and public accountability, preserve institutional knowledge and provide Government with a consistent basis for exercising its role as a responsible and professional shareholder. It would also align St. Maarten with internationally recognized best practices, including the OECD Guidelines on Corporate Governance of State-Owned Enterprises.

Fourthly, Supervisory Boards and Management Boards must continue to be selected on the basis of competence, integrity, independence and relevant professional experience. Regular performance evaluations, governance training and succession planning should become standard practice throughout the public enterprise sector.

Government should also ensure that every government-owned company fully complies with the Corporate Governance framework and continues to strengthen its governance practices in line with internationally recognized standards.

Finally, Government should periodically commission independent governance reviews to evaluate the effectiveness of Supervisory Boards, Management Boards, internal controls, enterprise risk management and compliance with the Corporate Governance framework. Continuous evaluation is essential to continuous improvement.

Preparing for Tomorrow’s Challenges

St. Maarten’s government-owned companies face challenges that are becoming increasingly complex.

Climate change, stronger hurricanes, cybersecurity threats, ageing infrastructure, energy security, water security, technological change, scarcity of qualitative local professionals and growing financial pressures require long-term planning rather than reactive decision-making.

Recent events have demonstrated that enterprise risk management, cybersecurity, business continuity planning, disaster preparedness and financial resilience are no longer optional. They are indispensable components of responsible corporate governance.

The governance framework of our government-owned companies must therefore evolve to meet these realities.

Looking Beyond the Debate

Ms. Regina Labega has made an important contribution by reminding us that government-owned companies exist to serve a public purpose that extends beyond profitability.

Her proposal to strengthen the Articles of Incorporation deserves serious consideration.

At the same time, it should be viewed not as the final answer, but as the beginning of a broader national conversation about how Government, Supervisory Boards and Management Boards can together strengthen the governance of our most important public enterprises.

Ultimately, strong government-owned companies are not created solely by words written into a charter.

They are built through responsible shareholder stewardship, a clear Government Ownership and Shareholder Policy, competent and independent Supervisory Boards, professional Management Boards, effective enterprise risk management, transparent accountability and a shared commitment to serving the people of St. Maarten.

Modernizing the Articles of Incorporation is an important first step. Modernizing the way Government exercises its role as shareholder is the reform that will truly transform our government-owned companies.

If Government embraces this broader governance agenda, St. Maarten will not only strengthen its government-owned enterprises but also reinforce public confidence in our institutions, improve the delivery of essential public services and better safeguard the interests of present and future generations.

That is the discussion our country should now be having, not simply how to rewrite the charter, but how to build a governance system that is modern, coherent, accountable and resilient.

That is not simply good corporate governance. It is good government!

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