HRD General Assembly Approves Restructuring Plan

With a 12 to one majority, the umbrella organization of the Belgium diamond trade today approved a restructuring plan that will shrink its board of directors to 12, half of them diamond traders’ representatives. Today's general assembly vote ends months of tension that culminated in the intervention of Belgium’s prime minister.

In a release today, the HRD announced that half of the 12 board seats will be directly elected by the diamond traders, the other half by the diamond bourses and manufacturers. There will also be one independent director. Up until now, the 13 professional member organizations of HRD together appointed 20 directors in four categories: trade, industry, bourses and banks/manufacturers. By accepting the scheme, the General Assembly has approved the first phase of the restructuring plan, which was proposed last month by a committee on the instructions of Belgium’s Premier Guy Verhofstadt.

There have, however, been three changes to the original proposal. One is the form of election, originally proposed to be open election for all 12 seats. Another change is the internal breakdown of the six traders’ seats. Traders with a turnover of over €100 million, between €30 and 100 million and under € 30 million will each have two representatives. All registered diamond merchants will be able to elect their representatives directly within the board. The original proposal suggested giving three seats to the large companies, two to the medium size, and one to the smaller firms.

The third approved change took the seat that in the initial proposal was to be held by a representative of the banks, and gave it to the diamond exchanges, which now hold three rather than two seats.

The diamond industry will hold two seats on the new board, the industry and exchanges will appoint their representatives internally. Finally, one external director will be appointed to introduce corporate governance within the sector.

“The existing proportions in the market realities are better reflected in the new structure,” says Youri Steverlynck, PR Manager of HRD. “By electing directors directly among all active diamantaires the problem of representativeness is also solved in a single operation.”

The elections will be held in the second half of April, and the new management can start working in May. It will then look for a new Managing Director and start work on phase two of the restructuring plan – splitting off the commercial activities of the umbrella organization.

“This new platform offers the sector an opportunity to restart and elaborate another joint future project. It is going to be a difficult exercise but the signals we are receiving show that everyone is prepared to try. In the course of the next few months we will also examine with the authorities on how diamond activities can be further increased in Belgium.” Steverlynck added.