Air NZ board flying light

By CHRIS DANIELS

Air New Zealand has found fresh talent for its board, naming four new directors and farewelling two - but despite a six-week international search it has yet to find members with direct aviation experience.

Of the new directors, veteran trade unionist Ken Douglas probably has the most experience with the aviation business, but this has mainly been from the other side of the negotiating table as an advocate for Air New Zealand workers.

The irony of this former communist standard-bearer joining forces with managing director Ralph Norris, a former chairman of the Business Roundtable, to run a renationalised flag carrier has not gone unnoticed.

When Mr Norris was appointed managing director two weeks ago, most commentators applauded his leadership skills but some worried that it left the airline's board and top executive position bereft of airline operating experience.

Mr Douglas joins new directors Jane Freeman, Warren Larsen and John McDonald, whose appointments were announced yesterday.

Mrs Freeman is a former general manager of ASB Bank subsidiary BankDirect, Mr Larsen is a former Dairy Board chief executive and Mr McDonald the former group commercial director and treasurer of Fletcher Challenge.

They fill vacancies caused by the resignations of Singapore Airlines' representative Dr Cheong Choong Kong and BIL International's Bill Wilson, QC, - announced a month ago - and those announced yesterday of Jim Farmer, QC, and Liz Coutts.

Dr Farmer's retirement, which was indicated, removed the board's longest-serving member, of 13 years.

Chairman John Palmer conceded that the board was now extremely light on aviation experience, but there were moves to remedy this.

"It will be clear from the appointments that have been made today that there is no specific airline industry experience in the new appointees - the board is conscious of that. That's an area that we are still working on."

Mr Palmer said existing board member Sir Ron Carter wanted to step down, but had agreed to stay on until a director with aviation experience could be found.

"We recognise the lack of aviation experience in the existing board members. That is an issue I am addressing right at the moment," he said.

"I see no risk to the company in the short term with the range of skill and experience around the board table."

The number of potential candidates with aviation experience was limited, so the selection process was proving difficult and complex.

"It was important to reconstruct the board as soon as possible rather than wait until we made a final decision about people with that sort of experience," Mr Palmer said.

"I felt we should press on and make those appointments, which is what we've done."

Mr Douglas, a former Council of Trade Unions president who has carved a niche for himself as a director of several Government and quasi-Government companies, was at pains to emphasise his role on the board was not as a union advocate.

"I am not the job delegate of the unions in Air New Zealand at all," Mr Douglas said.

"I clearly understand the significance and the difference between governance responsibilities and management responsibilities."

Yesterday's appointments underline the hands-off approach adopted by the Government to the airline.

Despite now owning 82 per cent of Air New Zealand, none of the board can be considered "Crown directors" appointed by the Government.

Mr Palmer said all the directors had been appointed by the board and were independent directors.

But the Government had been told of, and had approved the new directors.

He accepted that it could be seen as unusual that the majority shareholder did not hold any seats on the board.

"I can't see why there would be a separation of interests of the Crown as a shareholder and those people who are public subscribers."

Asked if he could think of a case where the Crown might seek to use its power as majority shareholder to influence board policy, Mr Palmer said: "The clear understanding I have with the minister [Michael Cullen] as holder of the Crown shares, is that the board and me as chairman will undertake the governance role in the best interests of the company, that the shareholder will not interfere with that process."

Air New Zealand reports its half-year results next Thursday.

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