Dialogue: Rankin case raises governance issues

By COLIN JAMES

So Mark Prebble, head of the Department of Prime Minister and Cabinet, had to move out of range of Christine Rankin's fleshly protuberances. Senior public servants once were made of sterner stuff.

Prebble, a most able bureaucrat, thought he had offered Rankin helpful advice. But it turns out he was being taken down in evidence, as were others, all now national laughing-stocks.

For that, Rankin surely merits an OM for services to entertainment. But there are also serious issues at stake.

First is some politicians' unconscionable treatment of Rankin. Their embarrassment in court - in turn an embarrassment to their anti-sexist Prime Minister - is a sort of rough justice.

Second, it is rough justice, too, for the suspicion and contempt that coloured this cabinet's dealings with some other senior public servants - treatment which prompted the Standards Board to set down rules not just for what ministers could expect of chief executives, as Trevor Mallard's brief to it requested, but also what chief executives had the right to expect of ministers.

A candid indication of this mismatch of suspicion and reality came from Helen Clark on Monday. Declaring Prebble an "outstanding policy adviser" with whose performance as her department head she was "entirely happy," she added that, given her pre-election fingering of him for dismissal (my words), "that has come as a surprise to me."

But, third, is the evidence of Rankin's deficiency in "nous competency" (to quote deputy State Services Commissioner Ross Tanner, though not in connection with Rankin). The willfulness and obsessive self-centredness evidenced in court disqualify her from appointment on management style alone.

And, fourth, far more important than all of the above, is the potential effect on the appointments procedure of any ruling in Rankin's favour that is not subsequently nullified by the Appeal Court denying Employment Court jurisdiction over top state-sector jobs.

At present the State Services Commissioner need give no reason under the State Sector Act for not recommending someone for appointment.

A Rankin win would create a need for reasons which might make it very difficult to block reappointment of a substandard performer, as has happened now and then, almost always quietly and with exit options.

A Rankin win might provoke, even require, a rewrite of the State Sector Act, the centrepiece of which is the minister-chief executive nexus.

At present the cabinet can only accept or reject the commissioner's nominee. The fear in some high public service quarters is that this bunch of pushy ministers might want to expand their influence - that we could end up with, as in Canberra, political appointments to the top jobs.

In a small public service such as ours, that could blunt career paths and so recruitment and retention of able people.

In a small country there is also a small pool of competent people for boards of state entities. This is especially a concern for state-owned enterprises and crown companies. It has been compounded by this Government's fondness for appointing people without commercial experience.

These people are in charge of enterprises which daily risk your money as captive shareholders. The unseemly display on the board of New Zealand Post, a big, adventurous and hitherto well-run state-owned enterprise, should have you worried about your inescapable investment.

The forefront issue - leakage of damaging confidential information (by someone whose identity, sprung by a trap, is now spreading through Wellington, including to me) - has been titillating.

But the real issue is governance. How far should ministers get involved in monitoring risk ventures?

On what criteria should ministers decide whether to stump up more of your capital for these companies?

Do they have a right to deny you as captive shareholders a decent return in order to serve their ideological excitements?

What would happen if a state-owned electricity enterprise went belly-up, as did Terralink?

Rankin and the NZ Post debacle have stirred up big state-sector governance issues. So far the Government's record on these issues is marginal. There will be more embarrassments, more rough justice, if it doesn't pay them sustained and serious attention.

* ColinJames@synapsis.co.nz