Powerful tools should be used. After playing around with GPT for a few months, I found that even though it still is not 100% accurate or complete, it is good enough to use seriously. It still is a good idea to double-check and compare its answers against literature, news, knowledge bases, etc. But it is good enough for me to chat with it and ask its opinion. So, this is the opinion-blog (“CHATTING WITH OPENAI’s GPT”). The answers are fully credited to the AI.
This week’s Chat: What happens when politicians interfere with the proper workings of Governance?
My motivation for this question is the discussion on the recent populist handling of the Curacao medical Center by government officials. Also, politicians on Curacao have a long-standing history of meddling with Corporate Governance. Remember BZV, RdK, Curoil, Aqualectra, CPA, CBCS to name a few. Some cases have led to court proceedings in which most of the time the Government lost, having to pay substantial amounts in compensation to the victimized parties. So, what does GPT think about this. Let’s do this and see what we can learn.
ME: What happens when politicians disturb the proper working of corporate governance?
GPT: When politicians disturb the proper working of corporate governance, it can have a negative impact on the overall economic and business environment. This is because corporate governance is based on the principles of transparency, accountability, and independence, and is designed to ensure that companies are managed in the best interests of shareholders and other stakeholders. When politicians interfere in this process, it can undermine these principles and lead to several negative consequences.
For example, when politicians interfere in the appointment of board members or senior executives, it can lead to the appointment of individuals who are not necessarily the most qualified or experienced for the job. This could undermine the performance of the company, as well as its reputation among investors and other stakeholders.
Similarly, when politicians interfere in the regulation of companies, it can lead to a lack of consistency and predictability in the business environment. This can make it difficult for companies to make long-term investment decisions and can discourage foreign investors from investing in the country.
Finally, when politicians interfere in the judicial system or engage in corrupt practices, it can undermine the rule of law and erode public trust in the government and the business sector. This can lead to a loss of confidence among investors and other stakeholders and can make it more difficult for companies to access capital and expand their operations.
In short, when politicians disturb the proper working of corporate governance, it can have a range of negative consequences for the business environment and the overall economy. It is therefore important for politicians to respect the principles of good corporate governance and to support a transparent and accountable business environment.
ME: What happens with the legitimacy of management when politicians keep interfering in the governance process?
GPT: When politicians keep interfering in the governance process of a company, it can erode the legitimacy of management in the eyes of investors, employees, and other stakeholders. This is because good corporate governance is based on the principles of transparency, accountability, and independence, and is designed to ensure that companies are managed in the best interests of shareholders and other stakeholders.
When politicians interfere in this process, it can create a perception that the company is not being managed in an independent and objective manner, and that decisions are being made based on political considerations rather than business considerations. This can lead to a loss of confidence in the management team, as well as in the company itself, and can make it more difficult for the company to attract and retain top talent, access capital, and maintain its reputation among customers and other stakeholders.
In addition, when politicians interfere in the governance process, it can create an environment of uncertainty and unpredictability, which can make it difficult for the company to plan and make long-term strategic decisions. This can lead to a lack of investment and growth, which can ultimately harm the company’s performance and competitiveness.
In short, when politicians keep interfering in the governance process of a company, it can have a range of negative consequences for the legitimacy of management and the overall performance of the company. It is therefore important for politicians to respect the principles of good corporate governance and to support a transparent and accountable business environment.
ME: Have companies gone bankrupt because of political interference?
GPT: Yes, there have been cases where companies have gone bankrupt because of political interference. Political interference can create several challenges for companies, including increased uncertainty, regulatory obstacles, and difficulty accessing capital, which can ultimately harm their financial performance and competitiveness.
One well-known example of political interference leading to the bankruptcy of a company is the case of Yukos, a Russian oil company. In the early 2000s, the company’s founder, Mikhail Khodorkovsky, was arrested on charges of fraud and tax evasion, which many observers believed were politically motivated. The company was subsequently seized by the Russian government and its assets were sold off, leading to the bankruptcy of the company and significant losses for its shareholders.
Another example is the case of Hanjin Shipping, a South Korean shipping company that filed for bankruptcy in 2016. The company’s bankruptcy was partly attributed to political interference, as the South Korean government was reluctant to provide financial support to the struggling company due to concerns about its high levels of debt and the potential political fallout from a bailout.
These are just two examples of many cases where political interference has had negative consequences for companies, their shareholders, and their employees. It underscores the importance of maintaining a transparent and accountable business environment, where companies can operate independently and make decisions based on business considerations rather than political considerations.
ME: Politicians who interfere in the proper functioning of corporate governance are like uninvited guests at a dinner party – they disrupt the harmony and spoil the meal for everyone. Good governance is essential for the health and vitality of our economy, and politicians must respect the principles of transparency, accountability, and independence to promote a thriving business environment. You want to build up the island, then you must be in construction mode.
What policy choices have we made? Choices made yesterday and today have consequences tomorrow. “We reap what we sow”. Get involved actively in economic policy, make conscious choices, because you willingly or unintentionally bear the benefits and the burdens.
I repeat: It would be to the credit of anyone in that policy-chair to be able to deal with economic management, because it has consequences”. Economy touches everything.