Af­ter a gen­er­al elec­tion, the win­ning po­lit­i­cal par­ty faces the chal­lenge of ap­point­ing state en­ter­prise board mem­bers. To ad­dress this, a con­ven­tion has de­vel­oped which re­quires cur­rent di­rec­tors to au­to­mat­i­cal­ly re­sign when a new ad­min­is­tra­tion takes of­fice. The log­ic is that the whole­sale res­ig­na­tion al­lows the new min­is­ter to se­lect a team aligned with the in­com­ing pol­i­cy di­rec­tion.

How­ev­er, not all state en­ter­pris­es are alike. Some, like the Na­tion­al Schools Di­etary Ser­vices Lim­it­ed (NS­D­SL), serve pub­lic pur­pos­es and func­tion as min­istry ex­ten­sions. The NS­D­SL, for ex­am­ple, is an agency of the Min­istry of Ed­u­ca­tion that en­gages stu­dents and par­ents to pro­mote healthy eat­ing in schools. Oth­ers, such as the First Cit­i­zens Group, fo­cus on com­mer­cial com­pet­i­tive­ness and op­er­ate like pri­vate-sec­tor firms. An en­ter­prise op­er­at­ing for a pub­lic pur­pose will op­er­ate dif­fer­ent­ly from a com­mer­cial en­ter­prise mo­ti­vat­ed by prof­it.

This con­ven­tion of au­to­mat­ic board turnover trans­forms di­rec­tor posts in­to po­lit­i­cal ap­point­ments, rather than po­si­tions based on ex­per­tise or per­for­mance. Such a sys­tem un­der­mines the sta­bil­i­ty and ef­fec­tive­ness of state en­ter­pris­es, il­lus­trat­ing the cen­tral ar­gu­ment: po­lit­i­cal cy­cles fre­quent­ly over­ride good gov­er­nance.

Whole­sale changes to the board are waste­ful and im­prac­ti­cal. They are made based on a per­ceived need for a new di­rec­tion in­stead of ac­tu­al per­for­mance. Re­mov­ing all di­rec­tors de­prives the com­pa­ny of valu­able ex­pe­ri­ence and op­er­a­tional knowl­edge, forc­ing new di­rec­tors to spend time learn­ing the busi­ness mod­el and de­lay­ing de­ci­sions. As the Board is the ul­ti­mate de­ci­sion-mak­ing au­thor­i­ty with des­ig­nat­ed lim­its for man­agers, such dis­rup­tions can cause de­lays in crit­i­cal ap­provals due to the time need­ed to ap­point a new board or avoid crit­i­cism from new in­com­ing di­rec­tors.

For ex­am­ple, fol­low­ing the May 2025 change in ad­min­is­tra­tion, state en­ter­pris­es were or­dered to sus­pend hir­ing, freeze ad­ver­tis­ing, and the ini­ti­a­tion of new con­tracts and oth­er hu­man re­source ac­tions un­til new boards of di­rec­tors were in­stalled. This de­ci­sion, root­ed in mis­trust that new hires might favour a par­tic­u­lar po­lit­i­cal per­sua­sion, caused sig­nif­i­cant op­er­a­tional prob­lems for en­ter­pris­es in com­pet­i­tive sec­tors. Ul­ti­mate­ly, the di­rec­tive re­flect­ed the be­lief that con­trol of state en­ter­prise boards en­ables po­lit­i­cal pa­tron­age and al­lo­ca­tion of jobs to al­lies.

This waste­ful­ness is am­pli­fied when new Boards, of­ten tasked with un­cov­er­ing mis­deeds of pre­de­ces­sors so that they can be used for po­lit­i­cal pur­pos­es in par­lia­ment or else­where, launch cost­ly in­ves­ti­ga­tions that rarely yield re­sults. For ex­am­ple, Ude­cott’s on­go­ing case, ini­ti­at­ed in 2012 against two ex-di­rec­tors and two of­fi­cers, has achieved noth­ing and will in all prob­a­bil­i­ty be dis­missed. Such pur­suits dis­tract di­rec­tors and man­agers from the en­ter­prise’s core mis­sion, re­sult­ing in in­ef­fi­cien­cy and un­prof­itabil­i­ty.

This is not to say that di­rec­tors or man­agers do not make mis­takes. In­evitably, there will be er­rors of judge­ment and not every busi­ness de­ci­sion is suc­cess­ful. BP, for ex­am­ple, strug­gled to de­fine its di­rec­tion as an en­er­gy com­pa­ny giv­en cli­mate change. In Feb­ru­ary 2025, it piv­ot­ed back to its core oil and gas busi­ness and scaled back its clean en­er­gy am­bi­tions, a “fun­da­men­tal re­set” of its strat­e­gy. The com­pa­ny, which had pre­vi­ous­ly aimed for a rapid tran­si­tion, de­cid­ed to re­fo­cus on fos­sil fu­els fol­low­ing un­der­per­for­mance in its share price com­pared to ri­vals and pres­sure from in­vestors to boost short-term earn­ings.

Busi­ness de­ci­sions must be made with in­com­plete in­for­ma­tion as con­di­tions change. Bad busi­ness de­ci­sions should not be crim­i­nalised. In­stead, judge di­rec­tors on per­for­mance and re­tain the best, re­gard­less of po­lit­i­cal af­fil­i­a­tion. In T&T, a small so­ci­ety, both di­rec­tor and man­ag­er tal­ent pools are lim­it­ed.

Cur­rent­ly, two state en­ter­pris­es, Caribbean Air­lines Lim­it­ed and the Na­tion­al Gas Com­pa­ny, both op­er­at­ing in com­pet­i­tive com­mer­cial busi­ness seg­ments, face pub­lic busi­ness scruti­ny. As of April 2026, con­cerns about Caribbean Air­lines’ fi­nan­cial vi­a­bil­i­ty and op­er­a­tional per­for­mance have resur­faced, with re­ports of the car­ri­er seek­ing an­oth­er gov­ern­ment bailout due to high debt and op­er­at­ing costs. Sim­i­lar­ly, NGC and TTNGL Chair­man Ger­ald Ramdeen cit­ed per­sis­tent, siz­able loss­es at Phoenix Park’s US sub­sidiaries as a cause for in­ves­ti­ga­tion.

CAL’s for­tunes have been in re­cov­ery mode since COVID-19 cre­at­ed a fi­nan­cial dis­as­ter for the com­pa­ny. When bor­ders closed, CAL’s rev­enue dis­ap­peared, but ex­pens­es re­mained. In a high­ly com­pet­i­tive, low-mar­gin in­dus­try, such con­di­tions make a turn­around af­ter COVID es­pe­cial­ly dif­fi­cult. The par­tial­ly sub­sidised To­ba­go air­bridge con­tin­ues to be a drag on per­for­mance. Re­cov­ery has been pos­i­tive but slow.

The new di­rec­tors have a steep learn­ing curve. How­ev­er, the ad­min­is­tra­tion’s May 2025 di­rec­tive freez­ing hir­ing, ad­ver­tis­ing, and new con­tracts has com­pli­cat­ed op­er­a­tions. Con­se­quent­ly, pro­fes­sion­al man­agers con­sid­ered their op­tions, lead­ing to an ex­o­dus of ex­ec­u­tive man­age­ment. The new board now lacks es­sen­tial ex­pe­ri­ence. Col­lec­tive­ly, these fac­tors un­der­mine the com­pa­ny’s turn­around prospects. The 2026 Ex­pen­di­ture Es­ti­mates (Min­istry of Fi­nance Head 18) in­di­cate the min­istry has ac­knowl­edged this and bud­get­ed an ad­di­tion­al $425,993,525.

This coun­try of­ten ref­er­ences its sav­ings by fo­cus­ing on the Her­itage and Sta­bil­i­sa­tion Fund, with­out con­sid­er­ing state en­ter­pris­es as a source of wealth. It is worth not­ing that Sin­ga­pore does not have re­serve as­sets like the HSF. In­stead, its state en­ter­pris­es are all owned by Temasek Cor­po­ra­tion, which is owned by the Min­istry of Fi­nance. It is an in­de­pen­dent com­mer­cial in­vest­ment hold­ing com­pa­ny that op­er­ates on com­mer­cial prin­ci­ples, with its own board and man­age­ment team. Di­rec­tors are ap­point­ed on mer­it, and their per­for­mance is eval­u­at­ed on an arm ‘s-length ba­sis. The cur­rent mar­ket val­ue of Temasek Cor­po­ra­tion is US$324 bil­lion.

This is a good ex­am­ple to fol­low.

Mar­i­ano Browne is the Chief Ex­ec­u­tive Of­fi­cer of The UWI Arthur Lok Jack Glob­al School of Busi­ness