The Constitutional Court Judgment nº 137/2018 of 13 December: a reminder of the constitution of local public companies and an opportunity to consider its governance

Abstract

The Constitutional Court has confirmed in its Judgment nº 137/2018 the power of the city council to determine the administrative body responsible for assuming the functions of the general meeting. This made the Constitutional Court to declare the unconstitutionality of article 14.1u) of the Zaragoza Capitality Law that empowered the governing board with the role of general meeting in local companies. Despite the apparent contradiction between basic and development legislation, the Constitutional Court commits few inaccuracies in its argument and extends the content of the basics without offering convincing reasoning. Apart from competence criteria, Judgment nº 137/2018 opens a debate on the government of public local companies and their criticised politicization. The OECD guidelines on the Government of Public Companies warn against this phenomenon and recommend an independent management. This requires the entrance of professionals in the boards of directors and the replacement of the plenary session by the government board, in order to avoid partisan debates, in the board of partners of the local public companies.