CEO warns judicial overhaul plan threatens Israel’s position as a business hub
Barak Eilam, head of the NIS 44 billion cloud computing software firm Nice, says businesses have a fiduciary duty to invest in countries with independent judiciary
Sharon Wrobel is a tech reporter for The Times of Israel.
The head of Israel’s Nice Ltd., a cloud-based software provider, warned on Monday that the new government’s plan to weaken the judiciary is poised to have irreparable consequences for Israel as a hub for doing business and attracting investment.
“The upcoming legislation to dismantle the judicial system in Israel will have severe and irreversible implications on the country‘s position as a business hub,” Nice CEO Barak Eilam wrote in a post on LinkedIn. “Tech company CEOs and boards have a fiduciary duty to protect intellectual property and key core assets, and will only be entrusting those in countries with strong and independent judiciary.”
Founded in the 1980s, Nice is one of Israel’s veteran tech firms focused on cloud computing systems, and is listed on Nasdaq and the Tel Aviv Stock Exchange with a market value of more than NIS 44 billion ($13 billion). The Ra’anana-based company employs more than 7,500 workers and operates in over 30 countries around the world.
A board member’s fiduciary duty is often referred to as the responsibility to act in the best interests of their company and shareholders. As an example, Norway’s sovereign wealth fund announced last month that the major global investor is reviewing its investments in Israel and may halt them entirely due to Israeli banks’ involvement in West Bank settlements. It currently is invested in some 80 Israeli stocks, including banks, industry and technology companies. The fund has in the past divested from numerous companies around the world for activities it deemed unethical.
Eilam’s warning comes after Israel’s Justice Minister Yariv Levin last week proposed a judicial overhaul that would severely limit the High Court’s ability to strike down laws and allow the Knesset to re-enact legislation that the court has struck down. It would also give Benjamin Netanyahu’s coalition government control over judges’ appointments and allow ministers to appoint their own legal advisers.
Proponents say the changes are needed to rein in a judiciary undermining the will of the people, while critics argue that it would remove an essential check on legislative and executive power, gutting democratic elements of the governing system. The critics also argue that the overhaul will remove all checks on government power and endanger the rights of minorities and vulnerable elements within society.
Eilam is joining hundreds of senior tech executives, serial entrepreneurs, money makers, and heads of investment firms, who have been warning in recent weeks that the planned legislative actions would change Israel’s democratic character, pose a threat to the country’s stable democracy, undermine confidence in the Israeli judicial system and scare away investors.
At the same time, financial institutions, tech firms, as well as, local authorities and academic institutions expressed in recent weeks that they will boycott doing business or work with entities deemed to be bigoted, as pushback grows over concerns the incoming coalition government will enact legislative changes to allow the use of discriminatory practices.