The head of Israel’s Nice Ltd., a cloud software provider, warned 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 law to abolish the judicial system in Israel will have serious and irreversible implications for the country’s position as a business hub,” Nice CEO Barak Eilam wrote in a LinkedIn post. “CEOs and boards of technology companies have a fiduciary duty to protect intellectual property and key core assets, and will only entrust them to those in countries with strong and independent judiciaries.”
Founded in the 1980s, Nice is one of Israel’s veteran technology companies 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 (US$13 billion). The company with headquarters in Ra’anana 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 his company and shareholders. As an example, Norway’s sovereign wealth fund announced last month that a major global investor is reviewing its investments in Israel and may halt them altogether because of Israeli banks’ involvement in West Bank settlements. It is currently invested in around 80 Israeli stocks, including banks, industrial and technology companies. In the past, the fund has divested itself of numerous companies around the world for activities it deemed unethical.
Eilam’s warning comes after Israeli Justice Minister Yariv Levin proposed judicial reforms last week that would severely limit the High Court’s ability to overturn laws and allow the Knesset to re-enact laws the court has struck down. It would also give Benjamin Netanyahu’s coalition government control over judicial appointments and allow ministers to appoint their own legal advisers.
Proponents say the changes are needed to rein in a judiciary that undermines the will of the people, while critics argue it would remove essential control over the legislative and executive branches, destroying the democratic elements of the governing system. Critics also argue that the review will remove all checks on government power and threaten the rights of minorities and vulnerable elements in society.
Eilam joins hundreds of senior tech executives, serial entrepreneurs, money makers and investment firm leaders who have warned 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 Israel’s justice system and drive away investors.
At the same time, financial institutions, technology companies, as well as local governments and academic institutions have signaled in recent weeks that they will boycott doing business or work with entities perceived to be bigoted, as opposition grows amid concerns that the incoming coalition government will enact legislative changes. which will enable the use of discriminatory practices.
