Board Appointments

The Herald picks up on the stacking of half the new Transport Agency board with Labour affiliated politicians.

In the last few months almost every Labour Party activist in the country seems to be picking up taxpayer funded board jobs.

Now I have never advocated that those with political involvement and experience should be ineligible for board appointments. And in some cases it can be useful to have a board member with some political saavy. And likewise it is understandable that a Minister will want perhaps one or two people on the more critical boards who understand politics to the degree that they can help the Board avoid actions which will put them on a collision course with the Government.

And being realistic, if a Minister has several candidates of equal quality, then the one personally known to the Minister will be at an advantage.

Now having defended some appointees with a political background, why am I critical of the latest rash of appointments? No not just because it is Labour. I will give some guidelines I think all Governments should use, and that National also has broken in the past.

1. Never have those with political connections forming a majority or even close to a majority on a board. That threatens good governance. National was guilty of this in the 1990s when I think every single member of the Lottery Grants Board was National connected. Now sure that only doshes out money but it is a very bad look. If a board has more than a couple of persons with political connections, then it loses credibility.
2. Unless someone was already a professional company director (or widely seen as possessing similar skills), they should not be appointed to more than a couple of boards. An individual should not have so many appointments that they earn a close to or higher than six figure income from board appointments. The appointment of Di Yates to four separate boards is an example of that. If they put her on only one board, no-one would probably grumble (except her fellow board members) – but four boards is ridiculously venal.
3. Appointees must bring genuine value to a board – their appointments must be based on merit, even if they have political connections. Appointments are always somewhat subjective but there are some clear differences in competence. For example I wouldn’t criticise the appointment of Garry Moore to the Transport Board as he has significant governance experience. But I can’t see how the appointment of Christine Caughey is in any way based on merit. The same for Di Yates on on Food Standards Authority – they were so desperate to justify it they had to include living in Waikato as a credential.
4. The more important a board, the more critical it is that the apointees be top class. I don’t get particularly worked up about an appointment to the Waikato Sports Trust or the Lottery Grants Youth Committee etc. But the boards of the large SOEs are critically important, as are the top regulatory boards. The Electricity Commission has been stacked with Labour affiliates – which is a massive concern. And this week I have focused on the Reserve Bank Board – a prime example of a board which needs the highest calibre of appointees, and those who can bring some real value to the area of monetary policy.

No-one should think a National-led Government is never going to appoint some of its former MPs, or others politically connected, to various Boards. Of course they will. But if appointments are in line with my proposed guidelines, then they should face significantly less criticism.