Auditor-General says Rich not conflicted

The Auditor-General has stated:

As you know, Katherine Rich has been a member of the board of the Health Promotion Agency (HPA) since July 2012. The HPA is a Crown entity. Mrs Rich is also chief executive of a private sector organisation, the New Zealand Food & Grocery Council (FGC). The FGC promotes the interests of various manufacturers and suppliers of products sold by the grocery trade.

We have received complaints about whether Mrs Rich’s two roles have led to her different interests coming into conflict.

We have considered the issues raised, obtained and reviewed relevant documentation, and spoken with the chair and chief executive of the HPA. We have not found it necessary to interview Mrs Rich.

We are satisfied that there are no matters we need to investigate further. We have not identified problems with the management of conflicts of interest by the HPA.

Particular legal conflict of interest rules that apply to board members of the HPA are set out in the Crown Entities Act 2004, in ss 62-72. In particular, s 62(3)(ca) notes that a person does not have conflict of interest merely because they have “past or current involvement in the relevant sector, industry, or practice.”

In our view, there is a need for rigour and specificity in identifying or analysing whether two different interests conflict. It is not easy to assess a conflict of interest in the abstract. A conflict of interest does not arise simply from a person’s general background, or from their personal or professional involvement in a sector or industry.

Some on the left seem to think anyone from a business sector must be banished from having a voice on health issues!

Most typically, any issue is able to be sufficiently dealt with by the person declaring their interest and withdrawing from participation in the relevant decision. As such, it ought to be rare that a conflict of interest is so pervasive and all-encompassing that a person cannot remain a member of the governing body at all.

Here, we consider it would be too simplistic to assume that the aims and activities of the HPA and FGC are incontrovertibly opposed and utterly incompatible, such that a person who was associated with one organisation was impossibly compromised from any association with the other. Similarly, it would be too vague and indirect to conclude that it is impermissible for Mrs Rich to participate in any matter relating to a broad general subject-matter, such as alcohol or tobacco.

As the Auditor-General says, you deal with conflicts on a case by case matter – now be having a witch hunt to drive someone off the board.