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Home / Business

<i>Fran O'Sullivan</i>: All change on the gravy train

Fran O'Sullivan
By Fran O'Sullivan
Head of Business·NZ Herald·
19 Aug, 2008 05:00 PM6 mins to read

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Fran O'Sullivan
Opinion by Fran O'Sullivan
Head of Business, NZME
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KEY POINTS:

National is decrying the "tsunami of cronies" it alleges Helen Clark's regime has appointed to plum Government-related roles as it stitches "our people" in place ahead of the election.

But before National strategists like Murray McCully get too hyperbolic about the huge numbers of "Labour flunkies" coming onto
the state gravy train, they need to think through just where they will source replacements for their own "year of long knives" - if and when they attain the Treasury benches.

Lucky for them they won't need to think too deeply.

Experienced company directors, who are not top of the pops as far as the current Government is concerned, are picking that an incoming National Government will ultimately sword Clark favourites and create some new vacancies.

These directorships are not worth a huge amount: Baseline fees run from $18,000-$49,000 in six bands depending on the size and commercial complexity of the enterprise.

Power company berths are sought after: Chairmanships are worth twice the going directors' rates and deputy chairs get 1.25 times the director's fees.

But they do plug businesspeople into the Government nexus which is an important factor when other roles are up for grabs.

There is a raft of directors: think Mike Smith, Henry van der Heyden, Wayne Boyd who mainly operate at the big commercial company table. Such people - along with others like Macquarie NZ's Jim McLay (a former National deputy PM) - are likely to be on the shortlist for a National Party that wants to get bigger results from the state companies. But to do that others have to be moved along.

Labour Party president Mike Williams (the general view is "he has to be toast") has five prime Government appointments: Genesis Power (deputy chairman - expires April 2009), Ontrack (director - expires October 2010), GNS Science (director - expires June 2009), and board membership of the Government-established Auckland Regional Transport Authority and the New Zealand Transport Agency which was announced by Transport Minister Annette King last month.

It seems highly unlikely that an incoming National government would not replace Williams on the Genesis Power and GNS Science boards given his strong attachment to Labour.

Not only is Williams party president, but he's also been Labour's prime bagman at the last two elections - and will be again this year - a role which means his contribution will always be judged through a political lens by his director peers irrespective of commercial skills he brings to the table.

Given the intermediary role that Williams performs - he did advocate the appointment of billionaire Owen Glenn as honorary consul to Monaco in discussions with Helen Clark after the businessman extended a $100,000 loan to help Labour out after the last election - there is obviously enormous potential for conflict of interest.

Board chairmen are expected to ensure the lines are clear but Williams' unique circumstances must have at times posed strains around the table particularly when the Government's political interests were not aligned with the commercial interests of the SOE or Crown 'croc'.

Williams is one of just a handful of directors who have been appointed to more than one board among the state-owned enterprises, crown companies and other entities which are monitored by the Crown Company Monitoring Advisory Unit.

CCMAU's director directory lists 15 to 18 directors who have recently enjoyed more than one Government appointment at any time. Among others: Con Anastasiou, Wayne Brown, Brian Corban, John Spencer, Jim Sutton and Ian Wilson who all hold chairmanships. Among directors with two appointments are Craig Ellison, Lex Henry, John Goulter, John Hercus, Graham Hill, Richard Janes, June McCabe, Joanna Perry, Susan Paterson and Polly Schaverien.

Williams is the only person on this list (apart from Anne Urlwin) who had three simultaneous appointments from the CCMAU directory of some 210-220 directors at any one time.

Proportionately this is obviously out-of-whack and would be untenable if an incoming National government does tackle the major policy shift it talks about behind closed doors. But Williams also has commercial skills to offer. If he stands down from the Labour presidency National would have to consider keeping him on in the transport arena.

The first major role that is potentially up for grabs is the chairmanship of Television New Zealand, which is occupied by Sir John Anderson. Sir John has only had one term as TVNZ chairman. It is one of a handful of prime governance jobs he has taken on since resigning as chief executive of ANZ-National Bank.

His term expires in December. Anderson's no-nonsense style has been tested trying to keep SOE Minister Trevor Mallard at arm's length while he dealt with the fallout from the Tony Veitch affair. The SOE directorship would offer National an opportunity to plug "one of its own" into a prime role.

Anderson has acquired a reputation as a "Mr Fix-it" .

Health Minister David Cunliffe deputed him to take control of the Hawkes Bay District Health Board after he sacked the incumbents. This move put Anderson at loggerheads with National MP Craig Foss, who is contesting the legitimacy of Cunliffe's decision-making.

But Anderson is also a well-respected figure in Wellington. Removing him to put in place a blatantly political appointment would not be a good sign by an incoming Government that has made a fetish out of decrying cronyism.

Major opportunities will not emerge until the next rollover period for SOE and crown company directorships in April 2009. Some 80-100 of these directorships become available each year.

Where the going gets interesting is with the really big jobs: Former National Prime Minister Jim Bolger has three chairmanships: NZ Post, KiwiBank and the KiwiRail establishment board. If Bolger could be teased away again with a plum offshore diplomatic post such as London or even another trot in Washington, National would have three hats at its disposal. But Bolger's growing flock of grandchildren (10) might act as an incentive to stay put.

Other Labour favourites such as Wayne Brown, who is chairman of Transpower and Kordia, will face a culture challenge dealing with National ministers. The ubiquitous Ken Douglas - who is NZ Post deputy chairman and also deputy chairman for Air NZ - might be seen as a target. But Air NZ and Solid Energy chairman John Palmer should be safe from the long knives. Palmer has courageously stood up for the integrity of his companies at times when ministerial fingers got too involved.

The real problem will be down at pygmy level: The myriad smaller jobs (some 140 in five weeks) into which Labour has stacked party favourites.

This is where the pressure should go - unfortunately the rollover times will be years away.

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