Supervisory Board Failures at GEBE and TELEM Expose Flaws in St. Maarten’s Governance Code

By: SXM Talks

~ Review urges urgent reforms to modernize oversight of Government Owned companies ~

PHILIPSBURG – St. Maarten’s Corporate Governance Code for Government Owned companies, which went into effect in 2010, was designed to ensure accountability and transparency. With clear rules on board responsibilities, conflicts of interest and financial oversight, it has provided a strong foundation for managing public enterprises.

Yet a recent review warns the Code is showing its age. International governance standards have advanced and without reform St. Maarten risks falling behind. Recent troubles at GEBE and TELEM suggest these gaps are already undermining public trust.

Strong, but Falling Behind

The Code’s two-tier governance model and emphasis on audit oversight remain solid features. But compared to global benchmarks like the OECD Guidelines, the Dutch Corporate Governance Code, and South Africa’s King IV Report, St. Maarten lags on critical issues: transparent reporting, board evaluation, whistleblower protection and sustainability oversight.

The shortfalls are not theoretical. They are visible in two of the island’s most important companies.

GEBE: Governance in Crisis

In 2022, a cyberattack crippled utilities provider GEBE. Billing stalled for months, customers were left in the dark and communication collapsed. An Integrity Chamber investigation later found systemic governance flaws: missing codes of conduct, politically influenced board appointments and conflicts between the supervisory and management boards. Recently, the public dispute between Government as the sole shareholder and the current Supervisory Board regarding the implementation of the recommendations of the RAC/BTP report, highlights how weak oversight can paralyze a vital public service and the lack of a clear corporate governance structure can allow for constant political interference, since the code’s implementation in 2010.

TELEM: Leadership Vacuum

TELEM, the national telecom operator, has faced its own governance turmoil. In the past, key executive posts have sat vacant for a considerable amount of time, while tension between the Supervisory Board and its CEO grew impeding constructive discourse on its strategic direction, while the company faced financial challenges. Parliament was previously misled about outsourcing customer service operations, exposing transparency failures. More recently, TELEM has struggled to respond strategically to regulatory and competitive pressures, leaving the company vulnerable.

These examples underscore the stakes: when supervisory boards falter, tax paying citizens bear the cost through unreliable services and eroded confidence.

Where Reform Is Needed

Eight priorities are highlighted to modernize the current Corporate Governance Code of St. Maarten:

1. Adopt a State Ownership Policy to clarify government’s role as shareholder and reduce political interference.
2. Increase Transparency through annual performance scorecards, disclosure of related-party transactions and procurement reports.
3. Mandate Board Evaluations and Succession Planning to avoid leadership gaps.
4. Set Diversity and Independence Targets for supervisory boards.
5. Strengthen Risk and Cybersecurity Oversight, learning from GEBE’s failures.
6. Tighten Auditor Independence Rules, including rotation and limits on non-audit services.
7. Implement Whistleblower Protections to expose misconduct safely.
8. Embed Sustainability Oversight so boards account for environmental and social performance.

Why It Matters

Government owned companies manage public money and deliver essential services. Weak governance risks more than inefficiency: it threatens public trust and economic stability.

Clear ownership policies and stronger disclosure requirements will increase confidence and ensure these companies deliver real value to citizens.

A Regional Benchmark

Reform would place St. Maarten at the forefront of corporate governance in the Caribbean. Transparent reporting, whistleblower protections and sustainability oversight are now the global standard. By acting decisively, the island could turn its government owned companies into models of accountability.

But if reforms stall, the risks are equally clear: blurred accountability, weakened institutions and wasted resources.

The Road Ahead

A phased approach is proposed: publish a State Ownership Policy, update the Code with new provisions on board evaluation, risk and whistleblowing and provide training for directors and managers.

The message is straightforward: St. Maarten’s Corporate Governance Code is a solid starting point, but it must evolve. The failures at GEBE and TELEM show that governance is not just about rules on paper: it is about trust, competence and accountability in practice.

Governance cannot remain static. The time for reform is now.