State Enterprises Sector comprises 52 companies, of which 40 are wholly owned, eight are majority owned, and there are four in which the Government has a minority shareholding, according to the Ministry of Finance State Enterprises Investment Programme 2025.
These entities operate in the energy industry, banking and financial services, manufacturing, transport and communication, tourism, agriculture, information technology, and the provision of social services.
The equity in this diversified group of companies amounts to $15.6 billion. This includes businesses that operate on a commercial basis, such as the National Gas Company and its subsidiaries, First Citizens Bank, Trinidad Petroleum Holdings Ltd, UDECOTT and Caribbean Airlines, amongst others. All state enterprises are incorporated under the Companies Act. This act recognises the power of directors and their duties to the company. These duties include acting honestly and in good faith in the best interest of the company and exercising the care, diligence, and skill that a reasonably prudent person would exercise in comparable circumstances. Failure to fulfil these duties can lead to personal liability for the directors.
It is important to note that the Companies Act does not recognise the Cabinet, its ministers, or any government functionary as having any power to give instructions to directors. This point is not well understood by members of the public, many of whom think that Cabinet has the power and authority to command state enterprises.
The Minister of Finance, as Corporation Sole and de facto shareholder, can appoint directors/boards through the shareholders meetings or by special resolution as empowered by the company’s bylaws. The key criteria for appointment should be experience and competence to obtain the best result from the companies’ assets rather than political loyalty or friendship.
As pointed out in Friday’s editorial, directors are not meant to be “yes men”, or in the words of High Court Judge Ricky Rahim, “rubber stamps”, when he found that SporTT directors had breached their fiduciary duty to the company. All newly appointed state enterprises’ directors should note that any breach of duty is their personal responsibility.
Many state enterprises formed for a public purpose depend heavily on the State for their resources. The 2025 Public Sector Investment Programme shows a budgeted expenditure of $5.67 billion for 2025 compared to $6.22 billion in 2025. These are sizeable figures and therefore an important part of the national patrimony that must be treated with due diligence. The SporTT decision demonstrates the care that directors must exercise when performing their duties, even if they are directed by a “government” operative.
A director must exercise his or her judgement and perform the necessary “smell” test in deciding on any ministerial directive, as these directives have no legal force.
The SporTT case is important as it exemplifies the moral dilemma that can arise even if board members are appointed at “arms length”, meaning that they have no party affiliations or connections to politicians who promoted their appointment. If politicians want the power to give directives to state enterprises, they must develop the legislation to give ministers the authority to do so and must also be held responsible for their directives. Until such legislation is passed, directors must exercise their judgement responsibly in the performance of their duties.
