Editorial: Bolger's bank job cute political ploy

When the National Party finance spokesman Bill English described his former leader's new role as "a cute manoeuvre" he was right. The appointment of former Prime Minister Jim Bolger as chairman of the "People's Bank" owes far more to politics than it does to banking.

The Government, and the Alliance in particular, will use the appointment as a glowing endorsement of New Zealand Post's latest venture, while National is put in the difficult position of being seen to criticise the man who led them in Government through much of the 1990s.

In nominating Mr Bolger for that position and as his successor as chairman of New Zealand Post, Ross Armstrong is playing politics. It is a role in which he is an accomplished player. His ability to court a Labour Government while carrying the baggage of being a former divisional president of the National Party is proof of that.

In persuading Mr Bolger to accept the position he has shown himself to be a master at the game. One can only imagine the smiles with which the prospect was greeted in the cabinet and in the Labour and Alliance caucuses.

For his part, the former Prime Minister is no novice in the game, either. He will play the political ball as adroitly as anyone. He has shown his ability to accommodate the needs of a new Administration by remaining as ambassador to Washington through more than half its term.

And his performance as our representative in the United States has been more impressive than that of many retired politicians who have been put on the diplomatic circuit.

However, politics is not the point. The issue is whether he, with no experience in banking, has the credentials to head the board of a bank that begins its life with serious questions over its its viability. Surely this was one job for which there was an obvious prerequisite of finding the most experiences bankers available to fill the boardroom table and, crucially, to sit at its head.

It begs the question: did Dr Armstrong and the Government seek such a person to chair the bank but find no one willing to accept the challenge?

There are numerous men and women with strong backgrounds in commercial banks or the Reserve Bank who would have been more qualified in terms of direct experience. We are told that three such people will sit on the board, but why not as its most visible director? If the answer is that NZ Post and the Government feel that someone experienced in the cut and thrust of politics is the best man for the job, they must be expecting some heavy political fallout when the bank is operating.

That might be the reality of it but if the bank is to succeed - and that must be the aim of NZ Post - it must be directed by the best bankers it can find. For their part, taxpayers should be looking for the same thing. They are contributing $80 million to the enterprise and expect to see that money well cared for.

The last time taxpayers became so directly involved in banking was the Bank of New Zealand sale. On the one hand Mr Bolger is applauded for presiding over the solution to that bank's debt problems and sale, while on the other he is criticised (by his former deputy, Winston Peters) for being tarred with the BNZ brush. Frankly, that is irrelevant.

Crisis management is something Prime Ministers are good at. Or, at least, they should be. That is not the same thing as leading a bank that has to attract 100,000 customers to be commercially successful. Mr Bolger's experience with BNZ might have taught him something about what banks should not do. That does not mean it taught him anything about how to run them successfully.

Mr Bolger's abilities as a "chairman of the board" are not in question. In a normal sense he has the ability to fulfil his managerial and fiduciary duties. However, his lack of banking experience makes his task somewhat more difficult than would otherwise be the case.

And, all other issues aside, be also runs the risk of finding - if the bank does run in to problems - that "Jim's Bank" is a label that he, and not Deputy Prime Minister Anderton, is sentenced to wear.