Books about Anguilla


Saturday, 22 May 2010

Comments on a planned “hostile takeover” of ANGLEC

My recent articles/commentaries seem to have provoked some concern among supporters of the Government as to my motives. In fact one talk show, supportive of the Government, drew comments from one of its notorious callers that ”rather than writing articles and dividing the country Victor Banks should come in and work with the Government”. Another well-known pundit remarked: “Victor Banks was quiet for sixteen years all of a sudden he is in every publication of the Anguillian”.

I will not treat any of these viewpoints with the disdain they deserve --- but I believe that I should set the record straight. First of all I have decided to use this medium to share my views on issues with the public --- and you will note that I am not presumptuous to use the term “educate the public”. Secondly, I have decided that I will not hide under a pseudonym or pen name. I will write under my own name. Thirdly, I will not take cowardly shots on any blog --- I will take full responsibility for everything I say; and finally, I am totally committed to doing a regular commentary on the issues and hope that Anguillians recognize that it is necessary for a country and its citizens to be tolerant enough to accept opposing views. I have absolutely no intention of stopping.

This week I looked through my extensive catalogue of issues and decided that it is time to say something about the way this Government has dealt with Boards generally and the ANGLEC Board in particular. Why the ANGLEC Board? Because unlike the other Boards the proposed changes have not yet been consummated ---and my comments might perchance cause the Government to reconsider its plans.

Let me make the general point that any Government has the right to revisit any Board which it believes is not operating in the public interest or in keeping with its vision or mission for the organization. In addition, the Acts that govern the various Boards provide a timetable for the retiring of members and to outline any specific qualifications they should have. I make these comments without reference to the individuals selected to serve on the various Boards --- but I will point out certain principles that should be observed in the selection process.

It may be useful for me to create a list of categories of Boards associated with Government as follows:

• Boards of quasi-government agencies like the Social Security Board and the Anguilla Development Board.

• Boards of agencies owned and subsidized by Government like the Health Authority, the Tourist Board and the Anguilla Water Authority.

• Boards of Public Companies in which the Government of Anguilla has an interest like ANGLEC and to a lesser degree the National Bank of Anguilla.

• Miscellaneous Boards and Commissions established to deal with specific projects like the Port Authority Project Board; for specific purposes required by law like the Tenders Board and the Poor Law Board; for providing advisory support like the Education Advisory Board; for regulatory purposes like the Financial Services Commission; and so on --- the list is not exhaustive.

As I suggested earlier many of these Boards have clear guidelines as to the qualifications of individuals selected to serve on them for example business experience; legal expertise, professional training and so forth. But my concern and my purpose for this commentary is the approach adopted by the present government in treating with every category of Boards since ascending to office.

Never in our history has there been the kind of wholesale changes of Board membership by any government. This has led to the reasonable conclusion by many in the public that these actions are politically driven and that only avowed supporters of the Government, regardless of the appropriateness of their skill sets, are being placed on these Boards.

The other obvious fact is that the Government is not even waiting for the end of Board Member’s tenure to institute changes. In other words they have not given them time to fulfill their work plan nor have they taken the time to evaluate what the Boards have achieved and make a more informed decision.

Another questionable issue is the composition of the Boards. I am particularly concerned about Boards that have responsibility for funds that are for the benefit of the wider community like Social Security and the Anguilla Development Board. And again I leave readers to make up their own minds about the skill sets of the members of these Boards. What I have noticed, however, is that a number of Boards are now stocked with one or two extremely strong politicos whose dominance overwhelms the more moderate Board Members to the extent that his or their positions on issues become the position of the entire Board. The danger here is that a fund of over 250 million dollars is virtually controlled by one or two persons --- whose strong personalities drown out everyone else.

But my interest in choosing this topic was piqued by what is being proposed by the Government and its advisors for the public company ANGLEC. The identifying characteristic of a Public Company is exactly that --- it is owned by the public. And even though we live in a democracy --- provision is made to ensure that the majority does not trample on the rights of the minority. A public company should therefore as far as possible reflect the interests of all the shareholders.

For a Government which boasts of being for the people, all the people --- it is scandalous, the high-handed manner in which it has sought to carry out a “hostile takeover” of the ANGLEC utility. Every single Anguillian shareholder besides the Government and the Social Security Board are being effectively excluded and in truth disenfranchised from having any say in the running of ANGLEC.

The Honourable Minister of Utilities Mr. Evan Gumbs and the Chairman of the Social Security Board have actually joined together to take over the control of the electricity utility. It means that ordinary people and major shareholders like NBA and CCB have been relegated to rubber stamps in the governance of ANGLEC. They cannot even choose a single director that may represent any specific interests they may have.

Looking through the “rear view mirror” it is noteworthy that the past Government never selected a slate of candidates after ANGLEC became a public company. Candidates campaigned to shareholders to be Directors on the Board and once they passed through the process of pre-qualification the Government then decided which they would support. In this present case the slate of candidates, that I will list later, were unilaterally chosen by the Minister and the Chairman and their advisors to be on the Board on the basis of criteria which, not being clear and transparent, could lead one to believe that it can only be political. Furthermore, I have serious doubts whether any of the persons on the list solicited Government or Social Security to be on the ANGLEC Board.

The ANGLEC Board deals with a number of issues, auditing, investment decisions, infrastructure development, pricing, engineering issues etc. It has always been the consideration of the past Government that it supports candidates for selection as Directors on the basis of their suitability to contribute to the decision making process. There has never been a wholesale revamping of the Board. The past Government has always followed the legal provisions in the Act for retiring and selecting directors. The past Government has never sent a list of Directors to a Shareholders Meeting --- they simply had their representative vote for persons who would have put themselves up for election.

What is happening now is a marked departure from what is considered appropriate conduct for a public company. It means that the Government and Social Security can conceivably unilaterally decide on rates; dividends to be paid; investments to be considered; contracts to be awarded; Staffing and hiring issues; procurement issues etc. And because both the Ministry and the Social Security Board are now virtual political entities --- many of these decisions could be on the basis of political considerations.

I will list the slate of Directors for the new ANGLEC Board as proposed by the Honourable Minister of Utilities, Mr. Evan Gumbs and The Chairman of Social Security, Mr. Astaphan for your information. They are: Mr. James Richardson, Mr. Buxton Gumbs, Mrs Heartha Richardson, Mr. Bernard Smith, Mr. Victor Nickeo, Mr Vernon Richardson, Pastor Ambrose Gumbs and Ms. Merline Duncan.

I would venture to say that few of these candidates have had any experience on Boards but as in many cases I would expect that they have the platform for additional training. I say this in the context that in keeping with its mission to elevate the level of competence among members of Boards in the region, ECCB through the Eastern Caribbean Stock Exchange has initiated a number of comprehensive courses for Board Members particularly those of Financial Institutions and Public Companies. Every single member of the present ANGLEC Board of Directors has undergone this training.

ANGLEC is an asset valued at over 100 million dollars. Those of you from every political persuasion who put up your hard earned money to buy into the company as well as all customers must be concerned about the strength of the Board in managing your investment and in delivering your services. Let me repeat it again --- I am not making any judgment on the abilities of the proposed candidates. I am simply making the point that ideally the selection process should not be driven by political considerations alone.

My research has revealed that after the letter was sent to the ANGLEC Board by the Minister and the Chairman to call an emergency meeting to remove the present board members and replace them with their slate ---- the Board requested a meeting to discuss the issues. This letter was copied to all the Ministers. The high-handed response from the Minister and the Chairman is a threat, in writing, to take the Corporate Secretary to High Court if the meeting is not organized by June 23rd.

So I want to leave you all with a few thoughts to ponder on:

• ANGLEC is a public company in which a number of Anguillians and Anguillian entities have been encouraged to make considerable investments.

• The actions being pursued by the Minister and the Chairman are blatantly high-handed but may also be considered unethical and unfair

• The proposed action is not in keeping with the principles of good corporate governance especially important for public companies

• The proposed action is neither sensitive nor sensible for creating goodwill for an organization that has a monopoly on providing vital services to the entire nation.

• It is conceivable that this action could destroy the credibility of ANGLEC as it seeks to be a leading edge organization in a period when the focus is on important global issues like alternative energy and climate change.

Finally, it has been noted that the Honourable Minister of Utilities, Mr. Evan Gumbs during his campaign promised to reduce the price of electricity to consumers. While this is a good thing --- if the proposed actions are in any way a means of facilitating that promise, to the exclusion of considerations for the sustainability of the Utility for both customers and shareholders we are heading down a slippery and dangerous path.

Mr. Minister, Mr. Chairman, lets us make the slogan “giving power to the people” more than just political rhetoric. And let us not treat the minority shareholders in ANGLEC like simply “powerless spectators”.

Victor F. Banks
Sachasses Estate
May 18, 2010

No comments:

Post a Comment

“Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity” – MLK.