Economy chief responds to concern over Solomon’s role

Disquiet has been expressed over the fact that St Helena’s economic supremo has a place on the board of the island’s biggest company.

Julian Morris is head of the Enterprise St Helena development agency, which has the job of building a private enterprise culture on the island. He also represents St Helena Government on the board of Solomon and Company, even though he was understood to operate at arm’s length from The Castle.

Emails passed to St Helena Online complain of a conflict of interest, because Solomon’s is in competition with smaller island businesses that Julian Morris is supposed to be encouraging.

Now Mr Morris has acknowledged the potential difficulty. But he said the government wanted to develop the whole economy, and having a seat on the board of such a dominant company would help in that aim.

The government’s majority shareholding in Solomon’s, and the company’s dominance of the private sector, have long been seen as a block on the growth of a free market economy on the island. It had to take over the company in the 1960s when it was in danger of collapse, in order to maintain services on the island.

Saint FM radio station said: “Members of the local business community suggest that the chief executive post should be neutral to any particular private sector enterprise, and as a board member of Solomon’s, Mr Morris’s responsibilities are to protect the interests of Solomon’s shareholders.

“By implication this could be detrimental to the competitors of Solomon and Company.

“It has been said that Julian Morris’s appointment to the board of Solomon’s is a clear conflict of interest. It is likely we will see a heated debate about this topic shortly.”

There was some pressure within the island’s business community to raise a formal protest over Mr Morris’s dual role. But the chamber of commerce is understood not to have called for him to step down from the Solomon’s board.

It was acknowledged that there were few people on the island qualified to serve on the board of a large company.

Mr Morris said: “At the basic level there is potential conflict with any government, anywhere, owning a controlling part of a private sector enterprise.

“The Solomon’s situation has existed for many years; I believe not instigated by SHG, but borne out of a necessity to make sure the island was provided with important services.

“It is understandable, and would be expected, for any majority shareholder to have representation on a company board. When the previous SHG Finance Director came off the board, I was asked to be the replacement SHG representative because it was felt that my private sector experience would be very relevant.

“Also, SHG is interested in the whole Saint economy and I am responsible for economic development on the island. Being on the board means that SHG’s interests in developing the wider economy are represented at a board level, which is helpful, when Solomon’s are such a large part of the economy.

“As SHG’s current representative, I am ever mindful of these potential conflicts.

“Whoever represents SHG interests on Solomon’s there is always potential for conflict, whether it be with Solomon’s, or the wider private sector.

“Obviously, in an ideal situation, there would be completely clear separation of duties. However, on St Helena, in common with other small communities and organisations, ideal divisions are often not possible because of the underlying structures and the limited number of people available.

“This type of conflict is not restricted to Solomon’s: in a small community and market, many activities will conflict with other organisations and business.”

On 1 March 2012, SHG announced that it was discussing plans to sell off shares and cease to be the majority shareholder in the 220-year-old company.

This was seen by some as a means of helping to open up the island economy to competitors, include Saint-owned start-ups.

Serving the interests of St Helena Government (SHG) – whose policy is to encourage the growth of independent businesses – might mean ensuring that the company does not increase its dominance of the island economy.

Mr Morris said: “The issue of whether SHG should continue to hold a majority share or shares in Solomon’s is not a new question. As the economy develops, the option of adjusting SHG’s position will be kept under review.”

SEE ALSO
St Helena Government may sell off Solomon’s shares

LINKS:
Enterprise St Helena
Solomon and Company

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