Mood of the Boardroom: Top bosses want National to sort out succession

CEOs are happy with the PM's performance, but most think it's time to groom a successor, reports Bill Bennett

Third term Prime Minister John Key remains as popular as ever in the nation's boardrooms, but CEOs have sent a clear message he needs to think to the future. They want National to put a succession plan in place and groom a replacement.

There's a broad consensus on Key's strengths. He is seen as pragmatic -- the word turns up dozens of times in responses. He gets things done, knows how to win elections and doesn't ruffle too many feathers. CEOs also like Key's connection with business, a number use the term '"engaged". Many mention his sound economic background and how that is reflected in policy.

Nearly 80 per cent of those surveyed say Key is still in touch with ordinary New Zealanders. That's an achievement given the events of the past year including the Dirty Politics saga, the ponytail incident and the misjudged Northland by-election. Many describe Key as a masterful communicator with the ability to speak plainly and relate to the public.

Mark Powell of The Warehouse captures the overall comments well describing him as "pragmatic, not ideological, economically sound with a sense of social justice. He comes across as down-to-earth and natural." Hellaby's John Williamson says Key has remained electable by consistently reading the pulse of middle New Zealand.

ICBC NZ chair Don Brash echoes the sentiment: "He is a very good communicator and can read the public's mood very effectively" while BusinessNZ's Phil O'Reilly says Key has "the capacity to bring the people with him". Scott St John from First NZ Capital says Key has the empathy to be "of the people".

"The PM is consistent, relatively predictable in terms of the policy initiatives and programmes he undertakes and he plays a long game. This consistent vision, combined with a wide and authentic appeal ... gives him a lot of strength", says Spark's Simon Moutter.

Key's background in the finance sector and his commercial savvy resonate with many business leaders. Vector's Alison Paterson lists his CV as a strength along with his ability to deal. "In my memory we have never before had a PM with this skill set. His relationship with Bill English and Steven Joyce, both of whom have different and complementary skill sets forms a powerful business-oriented base."

Franceska Banga of the New Zealand Venture Investment Fund says Key is super-smart, grounded and focused on the big picture.

One CEO comments: "He has been successful in his own right in the commercial sector, so he gets what it takes and understands business. He is a likeable fellow and has vulnerabilities like we all do". Another describes Key as acting as a great CEO with his cabinet.

There is widespread praise for Key's ability to work with industry. Greg Lowe of Beca says: "He has engaged the business community in a very effective action programme about growth aimed at growing government revenue to aid spending on social programmes". Lowe also talks of a "clarity of direction in focusing actions of returning the country to a sound economic footing".

A few CEOs commented on Key's politics. One describes him as "a very bright centralist". Another says Key surrounds himself with a few great people in the right roles along with a cadre of good operators: "He gets good information and completely outplays competitors in terms of tactics. He makes mistakes -- Northland is an example -- but these don't linger." EMA's Kim Campbell says Key has assembled an effective front bench.

Key also gets support for his approach to international affairs. One CEO says he has a decisive international profile while another says he handles himself well in overseas forums.

Time for National to groom a replacement?

Much as business leaders are comfortable with the PM, most think it is time for National to plan for his replacement. Not everyone agrees, 14 per cent of respondents think there's no need to plan yet. John Roberts from Global Strategic Services says Key still has another full term in front of him.

Eleven potential successors were named, reflecting a wide open field. Paula Bennett scored most mentions, but fewer than a third of total mentions. Front runners include English, Joyce and Simon Bridges. Each of their names appeared multiple times. Also mentioned are Amy Adams, Judith Collins, Simon Power, Nathan Guy, Jonathan Coleman and Hekia Parata.

A number of CEOs commented on the lack of suitable, qualified candidates. One says: "Candidates are few and far between -- and that's a major concern". Others say there are no obvious successors yet, but express confidence one will emerge.

Mark Powell from The Warehouse says succession planning should always be in place, even if it is only to cover an unexpected event.

Some CEOs think succession planning is a good idea in business but doesn't necessarily work in politics. One comments: "I've never seen this work in NZ. Key will run until he loses an election and National will then need to refresh while in opposition." Another asks if anyone has successfully pulled off a political succession.

First NZ Capital's Scott St John says it's highly likely a succession plan is already in place. Other comments reflect a similar view. Dr Oliver Hartwich from the NZ Initiative says though every organisation needs a succession plan, that doesn't mean the leader needs to communicate it externally.

Deloitte's Thomas Pippos says: "There should be and probably is (a succession plan). These things don't lend themselves to being in the public eye too conspicuously. Sometimes the most a leader can do is give all the potential aspirants the opportunity to shine and the rest will be history".