Lock, stock and sheriff's posse

By PAUL PANCKHURST

Elaine Campbell, a 30-year-old lawyer from Christchurch, is the new sheriff of the sharemarket.

The Stock Exchange this week confirmed her permanent appointment as general counsel - a role that takes in not only a wide variety of legal work but also the exchange's role as market regulator.

She patrols hand in hand with the marshall of the markets, Jane Diplock, the new head of the Securities Commission.

"Who would have thought a little old Christchurch girl would have ended up being the general counsel for the NZSE?" laughed Campbell yesterday over the phone from her ninth-floor office in Wellington.

"I bet my mother didn't - but she died when I was 20, so I'm a bit of a different person now."

Asked if she would be a match for the wily old players of the market, Campbell said: "I don't regulate this market alone."

There were, she pointed out, the experienced hands of the 12-member market surveillance panel, as well as Stock Exchange staffers who had been around the block a few times.

"I think we're OK," she deadpanned.

Campbell has already spent six months on secondment to the Stock Exchange from law firm Russell McVeagh. She is part of the new team, headed by glamour boy and fellow thirty-something Mark Weldon, which is leading the exchange through enormous change - many of those changes requiring hard legal slog.

Exchange members voted to demutualise in October, transforming into a limited liability company on December 31. The exchange expects to list on its own main board in the first half of this year.

A new alternative board, provisionally called the AX, is being prepared.

The Securities Commission and the Stock Exchange are getting to grips with a new relationship as market co-regulators.

Everywhere - everywhere in the world, that is - corporate governance is a theme of the day and our underdeveloped sharemarket faces the challenge of winning the confidence of investors who wonder: Is it safe to go back in the water again?

Campbell described her first six months as "an incredible challenge and incredibly exciting".

She described Weldon as "contagious in his enthusiasm".

The challenges she faces were illustrated in the first week of the job - when Guinness Peat Group made its late-night, off-market raid on the share register of investment company Rubicon.

Rivals claimed broker JBWere broke Stock Exchange rules by not buying at least 20 per cent of the stake on market, but the rules were fuzzy, leaving the exchange looking wet and weak.

Another incident this week - the controversy over brokers trying to trade their NZSE Ltd shares, and the exchange trying to block them - illustrated the exchange was now on uncharted territory for this country.

Campbell referred questions on that episode to Weldon.

Only nine years into her legal career, Campbell is the first person in her family to become a lawyer.

After law school in Canterbury, she began her career at Kensington Swan - now called KPMG Legal - in Wellington in 1995.

She has one early insight into business gone bad.

As a baby lawyer, she worked on the $36 million legal action by the receivers of Fortex, the Timaru-based meat company, against auditor Price Waterhouse.

The company had crashed spectacularly in 1994, its books well and truly cooked.

A later stint in London led to Campbell working in-house for the giant computer company Sun Microsystems, first in England and then in Boulder, Colorado.

This was a great education, but her husband lacked one of the essentials of working life in the United States - a green card - so she returned to New Zealand, joining Russell McVeagh two years ago and jumping over to the Stock Exchange in July last year for the role that includes acting as secretary of the market surveillance panel.

One of the highlights for Campbell so far is the deluge of submissions on the exchange's proposed new corporate governance rules: "amazing" interest and feedback.

In its next discussion document, the exchange will pull back from the idea of requiring listed companies to change auditing firms every five years - instead going for a rotation of partner every five years.

Another hot issue is the composition of audit committees - with the Stock Exchange wanting a majority of independent directors.

"We still believe that that is the correct approach to audit committees - the big auditing firms and international commentators also agree."

Saying that, she acknowledged, the New Zealand market has only a limited pool of independent directors. But, "public money is invested in these companies and that public money must be looked after".

Another of the tasks she has been tackling is trying to establish a strong working relationship with the Securities Commission.

To that end: regular meetings of Campbell, Weldon, Diplock, and the Security Commission's Liam Mason.

A memorandum of understanding is being nutted out for the relationship between the two bodies.

Campbell describes the Stock Exchange role as frontline: "The eyes and ears of the Securities Commission".

That puts the exchange's sheriff not just in the frontline, but in the vanguard of the frontline, with a lot of public attention focused on her.

It's a demanding role and it's clear that Campbell is still coming to grips with the public side of it. Back in December, when she was doing the job on an acting basis, Campbell described herself as "astounded" by critics' complaints about the new continuous disclosure regime for listed companies.

It had the ring of someone unused to the sallies of public debate.

Last week, with her appointment becoming permanent, the Business Herald's first attempt at a telephone interview terminated in a misunderstanding over the terms of the encounter.

The second was relayed via speaker phone at Campbell's end, with a public relations person listening in.

But when the interview got under way she bulldozed through questions with gusto, showing no lack of confidence and plenty of enthusiasm for the job.

Investors will no doubt be hoping that enthusiasm translates into the exchange having a more active regulatory presence than has sometimes been seen in the past.

On a personal note, Campbell is a sports fan, keen on tramping, nutty on rugby.

Now that she's the sheriff, perhaps pistol shooting may be added to the list.