Mood of the boardroom: How business leaders view Jacinda Ardern

Prime Minister Jacinda Ardern. Photo / TVNZ

Jacinda Ardern's leadership has been tested over the past three years: the Christchurch terror attack, Whakaari/White Island disaster and pandemic are front of mind for respondents to the Herald's 2020 Mood of the Boardroom Election survey.

They rate her leadership at 3.88/5 on a scale where 1= not impressive and 5=very impressive.

A property CEO says what Ardern has coped with in her three years at the helm is nothing short of unbelievable: "It's hard to think of anyone who could have handled these challenges with the same deft touch as she has demonstrated."

"Would I rank her as highly without those extraordinary events? Possibly not — but that's hypothetical and irrelevant. Does she have some huge challenges in front of her as far as the 'new normal' is concerned? Goodness yes. Does that change how much credit she must be accorded for her performance to date? Not in my view."

"It is hard to imagine a more difficult term for a first-term Government that has been out of power for three terms," says Deloitte CEO Thomas Pippos. "The Prime Minister's leadership in some of the key challenges the country has faced has been without a doubt very positive."

CEOs rate Ardern's integrity (3.57/5) and courage (3.67/5) among her top capabilities, along with her ability to adeptly communicate and demonstrate empathy. They say these are attributes that can be leveraged internationally to help New Zealand in its recovery following Covid-19.

"She has led the country through some of our most challenging moments in recent history, and her empathetic style has clearly resonated both locally and globally," says Spark CEO Jolie Hodson.

The PM's ability to form a coalition is also rated highly by CEOs among Ardern's capabilities (3.51/5), having successfully negotiated her way into power following the 2017 election. Alongside this is her rating for political management (3.33/5) — demonstrated by her ability to lead a stable Government over three years — which many previously considered unachievable with Winston Peters' involvement.
But executives say Ardern has been let down by her MPs and Labour's inability to deliver on 2017 election promises including KiwiBuild and Auckland's light rail.

"An outstanding leader on all fronts, sometimes let down by members of her team," says the NZIBF's Stephen Jacobi.

A healthcare boss says she is great at leadership in a crisis, but "lacks plans for a future pathway forward and has no credibility on implementation of any policy".

This worries CEOs, as they say the "hard stuff" for New Zealand is only starting now and her ability in this is yet to be proven.

Ardern's lowest scoring capabilities from CEOs are for her vision and strategy for New Zealand (2.56/5) and economic management (2.17/5).

Beca Group CEO Greg Lowe says when coming into power, the Prime Minister promised to govern for all New Zealanders. "While she has handled some situations very well, we are still lacking a long-term plan for New Zealand that we can all get behind and make progress on."

Key Performance Indicators

The highest scoring KPI for the Prime Minister from CEOs is her management for the response to the Christchurch terrorist attack (4.50/5).

Says director Anne Walsh: "The Christchurch Call showed international leadership in bringing change globally as to how multinational digital companies operate differently in the spread of terrorism and misinformation".

The handling of the two other major crises over the past year also rate among Ardern's top KPIs: Whakaari / White Island (3.94/5) and the Covid-19 crisis (3.90/5).

"No one would wish them on any PM. Jacinda has demonstrated genuine compassion towards her constituents," says Precinct Properties chair Craig Stobo. "She is an outstanding politician who may be able to govern New Zealand without a coalition partner."

The Government's Covid response is a key part of Labour's election campaign, with Ardern pointing out that relative to other countries, New Zealand is more open. She says our recovery is on track to be better than Australia's with lower debt and unemployment levels and fewer deaths.

Ardern's charismatic performance has received admiration on the international stage this year, with stark contrasts made between her Covid-19 response to the likes of US President Donald Trump and UK Prime Minister Boris Johnson.

Her ability to leverage her brand for New Zealand's international advantage has again rated highly with CEOs scoring this 4.23/5. Says Erica Crawford, "She is one of New Zealand's best assets on the global scene, she needs to cheerlead New Zealand."

Another high-scoring KPI for Ardern is her political performance (3.84/5).

It will be disappointing to Ardern that child poverty reduction, a portfolio for which she is responsible for and has expressed a strong desire to address, was her second lowest KPI, receiving a score of 2.10/5.

But one of the most troubling KPIs for executives is Ardern's ability to build confidence within the business community — for that they rate her 2.13/5. They say that Ardern's repeated calls for kindness and empathy in politics alone do not make a great leader: "you need a workable plan and know-how to deliver it with and through others". A director says "she does not inspire confidence that she understands business — but she does need business to succeed to generate jobs and pay taxes."

They say her success as leader is driven mostly by the figurehead aspects of the role. But notes a professional director: "the hallmark of great leadership is having a superb team around you — and apart from Robertson — she just does not have that".

"Labour has a very superficial engagement with the business community," says a multinational boss. "They do the bare minimum and have no ministers outside of Grant Robertson who really understand business at all."

Taxing time for the '2 per cent'

Is Labour's tax policy appropriate in the current economic climate? (A new top tax rate for income over $180,000, commitment to no new taxes, closing loopholes for multinational corporations, provisional tax threshold lift for companies, reinstatement of building depreciation, writing off interest on the late payment of tax.)

Yes - 36%
No - 48%
Unsure - 16%

Labour's decision to impose higher personal income taxes on just 2 per cent of New Zealanders has received mixed reviews from business leaders.

Some slammed the policy as "tokenistic" and targeting a group who can likely shift incomes.

"Labour's tax policy does very little — it's just virtue-signalling with little impact," said Paul Glass of Devon Funds management. BusinessNZ CEO Kirk Hope said a lot of Labour's Covid-related tax policy has been useful for small business. "Increasing the rate over $180,000 is probably neither here nor there — it looks a bit like they are pandering to ideology."

But high-profile company chair Rob Campbell said on balance it was sound. "It is conservative and I would like to see more emphasis on environment and equality, but stability and consensus is important now."

"Unsure how they are going to repay debt other than taxing top income earners who I don't think will object too much," said Peter Thompson of Barfoot and Thompson. "What other ways will they get the debt repaid?"

Said a sector leader: "The tax policy is pretty "safe" from an election perspective. But it is unlikely to either generate revenue to pay down debt or stimulate the economy in a meaningful way.

Finance Minister Grant Robertson forecasts the lift in the personal rate to 39 per cent on incomes over $180,000, will bring in an additional $550 million in taxation revenue.

The Herald went out with a snap survey to respondents to the Mood of the Boardroom election survey seeking views on both Labour's and National's tax policies. Some 68 chief executives and directors responded.

"The amount of tax take at the upper end seems too small for the trouble," observed Mainfreight's Don Braid. "Is this a political tax rather than an effective economic tax? Building depreciation implemented already."

A company chair was dismissive: "This policy lacks strategy and will not generate the funding required to counter the enormous debt".

Nevertheless, just over one-third of respondents to the Herald's 2020 CEOs Election Survey thought the policy was appropriate in the current environment.

Apart from the tax hike on the "2 per cent", Robertson has committed to no new taxes — specifically ruling out capital gains taxes. He also plans to close loopholes for multinational corporations, ensure a provisional tax threshold lift for companies, the reinstatement of building depreciation and writing off interest on the late payment of tax; the latter three in response to the impact of the Covid-19 pandemic on companies.

Foodstuffs North Island CEO Chris Quinn was broadly in agreement. "The issue is will all earners over the new top rate be included in the rate?

"No increase in tax for the great majority of people makes sense in current circumstances," said a banker.

Others took a sharper view. "The Government (Labour) should be looking to cuts its costs rather than raise more taxes," said a company chair.

"It is not aggressive enough" said a casino operator.