… individual decisions not binding on company – legal opinion

Managing Director of the Guyana Water Incorporated Inc (GWI), Dr Richard Van West-Charles, has been informed in no uncertain terms that his powers are subservient to that of the collective Board of Directors led by its Chairman.

The position was made clear in a legal opinion sought by the GWI Managing Director, as he attempted to usurp the powers of the Board of Directors.

He had sought a legal opinion from the Satram and Satram Law Firm, on the powers of the Board as a collective, versus his individual powers as a Director on that Board but was told the decisions of the collective body prevails.

Guyana Times has seen a copy of the legal opinion sought by Van West-Charles, which has effectively informed him that his remit lay only with the day to day operations of the entity and does not supersede the collective decisions of the board of directors led by its Chairman.

The Board members, he was informed, act and take decisions on behalf of the company’s shareholders – the owners of the company which in this case is the people of Guyana through the State.

The legal opinion sought has since advised that the GWI Board of Directors led by its Chairman “are empowered to direct the management of the business and affairs of the company.”

Van West-Charles is a Manager and as such is subjected to the decisions of the board, according to the legal opinion.

No binding

Directors are generally appointed by the shareholders of the company –once elected they are under a duty to act in the best interest of the company when exercising their powers.

“Decisions made outside of meetings and by individual Directors are not properly decisions of the Board and may not be binding on the company,” the legal opinion supplied by Satram and Satram Law Firm stated.

The GWI by-laws makes both the Chairman and the Managing Director members of the Board of Directors and while “These two Directors may be vested with special powers and duties which the Board may confer upon them… They may exercise powers of the Board only to the extent that they are authorised to do so by the board.”

The attorneys have since also informed the GWI’s Managing Director that the powers of the Directors are collectively given to them and that they collectively exercise an independent power of management.

“Their powers are not subject to the dictates of shareholders… This is because the Directors’ power is original and not delegated.”

It was pointed out to Dr Van West-Charles that the Directors exercise their powers for the benefit of the company.

Complaints

The legal opinion sought said too that the powers of the board are not given to individual Directors but to the Board as a unit since the board acts collectively.

“The Board of Directors operates through meetings and resolutions… decisions of the Directors can only be taken at a properly constituted Board meeting.”

The internal fighting between Dr Van West-Charles and the Board of Directors came about following a litany of complaints related to numerous infractions and changes at the utility entity that had been instituted by him. The entity’s Internal Audit Department (IAD) has launched an investigation into an abuse of authority by the entity’s Managing Director, Van West-Charles in addition to the Board of Directors considering a motion to have him immediately suspended pending investigations.

The auditors have also recommended that many of the changes instituted by Dr Van West-Charles be reversed.

The investigation was launched into the actions of Van West-Charles after a litany of complaints and allegations had been lodged and those range through questionable employment practices, the suppression of internal audits, and retribution against senior employees, among a host of other infractions.

Reversed decisions

According to internal communications seen by Guyana Times, Van West-Charles in fact relocated the Internal Audit Department (IAD) to a Da Silva Street, Georgetown, location in order to make room for the ‘Debt Recovery Department.’

With regards interference of Van West-Charles into the operations of the Internal Audit Department, this publication has seen internal correspondences which point to allegations that on various occasions, the Managing Director had stated that he was very uncomfortable about the reporting lines and authority of the audit manager and staff.

The Managing Director reportedly instituted a system for the internal auditors where, “we started to experience lengthy delays to get records timely, limited access to people and information from auditors.” All requests were made to be channelled through Dr Van West-Charles, who also “requested that he be kept informed on every stage of an audit and would like to screen the Auditees responses before same was disclosed to the IA staff.”

Suppress audits

According to the correspondences seen, “The environment became similar to the one created by the previous Chief Executive (CE)… Found to be very hostile most of the times but we tried as much as possible to suppress and work around it.”

The IAD has since recommended an urgent review of GWI’s policies and procedures at all operational areas to reflect modern practices and the structural changes recently made.