EDITORIAL – Should government ‘indemnify’ public board members?

In Cayman we have a usually invisible, often opaque, powerful and largely unaccountable level of government operating off most radar screens.

We refer to the country’s “appointed bodies” – the well in excess of 100 boards, commissions, committees and tribunals that deliberate on matters ranging from financial services regulation, to the issuance of building and work permits, to business licensing and the administration of health insurance and pensions … and everything in between.

In almost any activity government is involved in, it is a safe bet there are corresponding appointed bodies, which oftentimes beget “twins” or even “triplets.” Create a new board and we can almost guarantee an “appeals tribunal” will not be far behind. The propagation of such a multiplicity of public boards, arguably, is a greater threat to our peace of mind and quality of life than our overly fecund lionfish or green iguanas. We are becoming overwhelmed by them and the hundreds of politically appointed individuals who comprise their membership.

For the most part, these boards conduct their business largely unnoticed, surfacing only under exceptional circumstances (usually a scandal, a court case or a news story).

Which brings us to today’s topic: Readers will recall that last fall the Liquor Licensing Board attracted much attention when it was revealed that, under the leadership of (now former) Board Chairman Woody DaCosta, official records were altered in an attempt to undo decisions made in relation to “Sunday liquor sales” at a Red Bay convenience store.

At the time, the revelations repeatedly made the front page of the Compass, including a rare Page One editorial in which we called for the en masse resignation of the entire board, and again today, after Premier Alden McLaughlin accused Mr. DaCosta of “very bad conduct.” (Mr. DaCosta, as we also report today, refutes the premier’s allegations.)

Nevertheless, despite the actions of the Liquor Licensing Board and its former chairman, the Legislative Assembly on Friday approved “emergency deeds of indemnity” for members of the Cayman Islands Monetary Authority board of Directors and the Liquor Licensing Boards of Grand Cayman and the Sister Islands.

The move protects individual members of those boards (Mr. DaCosta, by name, was specifically exempted from protection) from being held personally liable for any actions performed in their official capacities – provided the actions were taken in “good faith.”

In discussion, Commerce Minister Joey Hew said the Liquor Board debacle had made it “next to impossible” to find replacements for Mr. DaCosta and for the board’s deputy chairman. Premier McLaughlin was quick to point out “bad faith” decisions, such as the apparent fabrication of meeting minutes, would not be covered under the new protections.

Attorney General Sam Bulgin said some CIMA board members were concerned they were not sufficiently protected from being held personally liable for their official actions under previous law.

We acknowledge and appreciate the dilemma: Cayman’s “best and brightest” are unlikely to serve on boards if they put themselves and their families at financial or reputational risk. However, we also have concerns about individuals’ rights to pursue remedies for wrongs done to them by the actions of boards – by one, some or all of its members.

Frankly, we are puzzled by Mr. McLaughlin’s and Mr. Hew’s condemnation of Mr. DaCosta’s actions but exoneration (and indemnification) of the collective Liquor Licensing Board, which either participated in or, at the least, remained silent once alleged wrongdoings became widely known.

The key question cannot be avoided: Should individual board members, who either participate in, or become aware of, misdeeds by their boards enjoy the protection of indemnification?

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