Court lambasts Bank of Valletta board election

Bank of Valletta’s practice of allowing the company’s directors to vote on each other’s suitability to re-contest election to the board of directors has been criticised by a court, which described it as the antithesis of the assessment process established by EU guidelines.

In a judgment delivered in the First Hall of the Civil Court, Madame Justice Jacqueline Padovani Grima upheld an application for a warrant of prohibitory injunction which had been filed by long-serving board member George Portanier.

Portanier had requested the injunction after a self-assessment exercise carried out by the board of directors concluded that he was no longer suitable to contest the post. 

The Court heard how BOV had failed to set up an independent nominations committee in line with European Union guidelines to assess the suitability of candidates for directorship. 

In the absence of the independent committee, BOV Chairman John Cassar White instructed the directors and prospective directors to fill in a questionnaire, assessing themselves and their fellow candidates with regards to their suitability to re-contest the posts. 

The court was shown minutes of a board meeting held on 25 September – the day the results of the questionnaires were released – demonstrated that Cassar White had himself acknowledged a need for better procedures. 

Judge Padovani Grima called this the “antithesis” of adherence to the relevant EU guidelines. 

Padovani Grima held that by eliminating Portanier from the candidate pool, the board had effectively removed the need for an election because the amount of vacant posts was the same as the amount of available candidates. 

“Aside from it being clear that the question of how the assessment was hurriedly performed and intended only to pay lip service to the law, the result of this assessment being carried out by people affected by a conflict of interest... created a milieu of circumstances where members of the Board of Directors are self-perpetuating... disposing of the need for an election.” 

The Court held that the plaintiff would suffer irremediable prejudice were he not allowed to contest the post and ordered that the bank desist from acting on the result of the self -assessment carried out by the directors.