The working group charged with the task of proposing a new structure for the HRD has recommended the creation of three new entities: representative, commercial and industry oriented. The proposal has so far met with a positive response.

 

Today, the Board of Directors at the HRD received the first draft proposal from the Belgium government stating their plans for the restructuring of the organization. Last night, the Belgium Prime Minister, Guy Verhofstadt, met with a select group of HRD representatives to hand over the draft proposal. This morning, the HRD's Executive Committee was presented with the nine page plan for review.

 

Recommendations include reducing the organization's Board of Directors to 12 members, as required by a new law, from the current 20 member Board.

 

The main proposal recommends breaking up the current structure of the HRD into three separate entities:

 

1)     HRD Publiek - an organization to represent the interests of the Antwerp diamond industry, including the 12 member Board of Directors.

 

2)     HRD Newco NV - an entity that will be responsible for commercial functions, including the Diamond Office, diamond laboratory, research and education.

 

3)     VZW HRD - an organization representing the interests of Antwerp's Diamond Exchanges and trade organizations that will consult and advise the main body - the HRD Publiek.

 

One of the biggest proposed shakeups calls for the currently non-profit laboratory to become a commercial entity. Profits from the laboratory (after tax) will be channeled to the HRD Publiek.

 

A new structure for the Board of Directors

Currently, members of the Board represent organizations within the industry and are elected by individual organizations to represent their interests on the Board. This is slated to change. According to the new proposal, the 12 members will represent a variety of interested parties. For example, six members will represent traders.

 

Large, medium and small businesses will each have two representatives. The size of the business will be determined by turnover:

• Companies with turnover exceeding $100 million per annum
• Companies with turnover between $30 million to $100 million per annum
• Companies with a turnover below $30 million.

 

There will also be one representative for the diamond manufacturers; two representatives of the four Antwerp Diamond Exchanges; one representative for the banking industry; one representative of the diamond industry unions.

 

The 12th member of the Board will be an outside expert – someone who is not a member of the diamond industry, but who has great experience to share with the Board, a “captain of industry” as one insider put it. This final Board member will be unanimously nominated by the other 11 members.

 

Noticeably absent from the proposed set-up for the new Board of Directors is a representative of the diamond producers.

 

Another change put forward by the working group is that Board members be elected directly, rather than by one of the 13 associations that form the organization.

 

Youri Steverlynck, HRD Marketing Director and a member of the workgroup that drafted the proposals, said today that it’s “a unique opportunity to resolve a lot of the problems that have plagued the industry for several years”.

 

The Board of Directors now has just a week or so to review the plan before turning to the government with any changes or other issues they would like to see implemented.

 

This morning, just a couple of hours after most Directors saw the plan, it seemed that the majority were in favor, with only minor modifications to be made.

 

If the Directors reject the plan outright, the government has stated that they will dismantle the structure of the HRD entirely, something no diamond industry player in Antwerp wants to see happen.

 

It is expected that once a new structure is approved, elections for the new Board will be held. One of the first tasks of the Board will be to select a new managing director.