Rethinking Corporate Governance: A Shift in Perspective
A Change in Perspective on Corporate Governance in Aruba
At first, I was highly skeptical of Aruba’s Code of Corporate Governance. Applying corporate-style governance to all government-funded organizations—even small ones—felt excessive. It seemed like an unnecessary burden that would discourage capable board members. Should modest, subsidized foundations really face the same scrutiny as large, government-linked entities? But recent events have shaken that view and led me to rethink.
Recent Scandals Expose the Need for Checks and Balances
The no-confidence dismissal of Minister of Education and Sports Endy Croes over financial mismanagement and conflicts of interest within the Stichting Sportsubsidie Aruba (SSA) stands as a warning sign. This scandal, marked by unaddressed conflicts and misuse of public funds, highlights severe failures in oversight. It’s not just the large organizations that need strong governance principles—even the smaller players do if they’re handling public money.
More troubling, however, was Prime Minister Wever-Croes’s defense of Minister Croes rather than holding him accountable for delaying governance improvements within his organization. It makes one wonder if familial or political ties took precedence over the very transparency and accountability the Code was designed to uphold.
Then, we have the recent arrest of another sitting minister, Glenbert Croes, as part of the Portulaca investigation. This has only intensified public frustration and exposed an urgent need for accountability – especially from those at the top. It raises an important question: Will officials take governance principles seriously, or are we in for a parade of ministerial scandals?
Accountability Across All Levels
Public funding is a trust given to both large and small organizations, and that trust requires transparency. While larger entities may adapt to formal compliance requirements more readily, recent events have shown that smaller, subsidized groups need just as much oversight. Initially, I viewed the Code as overreaching. Still, we can’t ignore the lapses in smaller foundations that lead to a slow erosion of public confidence and the misdirection of funds intended for the public good.
By broadening governance requirements, we prioritize public accountability over convenience, setting a higher standard across the board. The Code isn’t just about imposing rules anymore; it’s a much-needed step toward transparency and trust in Aruba’s entire social sector.
Setting the Standard: Governance Begins with Leadership
Good governance has to start at the top, with leaders who take responsibility and set the example. Expecting small organizations to meet high standards is unacceptable when we see government accountability gaps. Ministers and parliament members should be models of ethical, transparent practices. They must be ready, willing, and able to lead the community by example—not through political showmanship or shortcuts.
In a democracy, anyone with enough popularity or connections can win a seat in parliament, but shouldn’t we—the voters—hold ourselves to a higher standard when it comes to casting our votes? Electing officials who are unprepared for responsibility and accountability leads to a circus. We owe it to ourselves to expect integrity, responsibility, and real public service.
Challenges Facing Smaller Organizations: Why the Code is Worth Implementing
Bringing corporate governance standards to public companies, foundations, and nonprofits is no small feat. These organizations often run on volunteer efforts or part-time board members, many of whom don’t have extensive backgrounds in compliance or governance. Adding formal oversight requirements could tax their already limited resources and even deter professionals from taking on board positions due to increased liability and time commitments.
But the Code’s potential benefits are worth the challenges. Building accountability at every level of public service strengthens public trust, ensures ethical oversight, and protects community funds. With a thoughtful, phased rollout – perhaps with additional support options – these governance practices could bring much-needed transparency to organizations of all sizes, solidifying the foundation of responsible management across Aruba.
Leniency for Embezzlement: A Dangerous Precedent in Governance
Another troubling aspect is the leniency shown to the individual involved in the embezzlement of Afl. 158,000 (around USD $100,000). Despite admitting to the embezzlement, this individual has been allowed to repay the funds interest-free over several years – even before facing a criminal trial. Endorsed by the dismissed minister and left unchallenged by the Prime Minister, this arrangement raises a critical question: How does such leniency promote the goals of the Code of Corporate Governance?
Rather than reinforcing accountability, it sends the opposite message. Allowing financial misconduct to be “corrected” with flexible repayment rather than facing real consequences undermines the deterrence and transparency the Code aims to establish. If the government intends to lead by example, a stricter approach is needed, or public trust risks further erosion.
A Shift in Public Expectations for Accountability
Recent scandals have shown us – one would hope – that Arubans increasingly expect transparency and responsibility from anyone handling public funds, whether a large government office or a small nonprofit. Parliament’s vote of no-confidence against Minister Croes signals a shift – failures in oversight are now met with real consequences. In this context, the Code of Corporate Governance reflects a growing consensus: accountability is no longer optional.
This shift also suggests that the public will watch closely as the Code rolls out. If implemented correctly, it could start a new era in Aruba, where transparency and responsible management of public resources are expected at every level.
Embracing Accountability as a Shared Responsibility
While I started questioning the Aruba Code of Corporate Governance, recent events have shown me that even small, subsidized organizations need checks and balances. Applying governance standards universally acknowledges that all must earn public trust. If we’re serious about fostering integrity and protecting public resources, every organization – big or small – should have the framework to manage funds responsibly. Governance isn’t just about setting limits; it’s about setting a standard.
It’s time we all take responsibility for the accountability that builds trust. Implemented well, the Code of Corporate Governance has the potential to strengthen Aruba’s institutions and increase public faith in our leaders.
As always, thank you for reading, and let’s keep this conversation on going. I’ll see you next week, and don’t forget to visit lincolngomez.com for my latest blogs and podcasts. Governance is everyone’s responsibility – from our highest ministers to the boards of local nonprofits. It starts with the standards we demand of those in office and the values we insist on upholding in every organization.
