Stabroek News
April 28, 2002
Dear Editor,
The authority of the Office of the President over State Boards is now being questioned in the case of the Guyana Forestry Commission. This is a good thing, for only by asking questions could one really get core information on an issue.
In the private sector any time an individual wholly owns the Company he has the right to appoint all the Directors and the Chairman of the Board.
If he owns the majority of the shares in that company he has the right to appoint the majority of the Directors and possibly even the Chairman.
In the private sector where the management makes a decision that is liable to have legal consequences, and the Board (owner or owners’ representative) perceives that such action would be damaging to the image of the company and that it could forestall such damage and at the same time ameliorate its losses, the Board can opt for an out of court settlement. Well, whether we like it or not the fact is that where State Corporations are wholly owned by the State, the State appoints all Directors and the Chairman of the Board. The Board is thus a proxy for the State.
If the State perceives that any action by the management of a corporation, is likely to have legal consequences and at the same time cause damage to its image, what should the State do? I would say exactly as a private sector company or any other individual would do - take steps to cut its losses and protect its image. State Corporations by their very nature cannot be wholly autonomous.
Yours faithfully,
Albert Adams
Editor’s note:
Mr. Khemraj Ramjattan, [ please note: link provided by LOSP web site ] attorney-at-law has pointed out in an opinion that the Guyana Forestry Commission was set up by the Guyana Forestry Commission Act. Though by virtue of Section 31 the Minister can give the Commission directions of a general character as to the policy to be followed the commission is generally separate and free from governmental control in its day to day operations.
The Guyana Forestry Commission is in other words semi-autonomous and the government therefore has no right to intervene in or reverse decisions of the board on issues like the employment of staff. This is an unlawful intervention not justified by the law.
What may be possible is the removal of the board subject to complying with any provisions in the laws. The same situation would apply in a private company. The corporate veil cannot simply be lifted or ignored.