The Dom Post editorial:
Prime Minister Bill English would be right to sack members of the board of the Super Fund. Their decision to give the fund’s CEO a massive pay increase was a direct challenge to the Government. No state-owned company can defy its owner and expect to get away with it.
Professional directors say their colleagues on the Super Fund board faced a dilemma. The board believed Adrian Orr deserved a massive 36 per cent increase in his potential pay package.The then board chairman Gavin Walker said it didn’t believe the public sector pay scale was the right one for setting Orr’s salary. So it went ahead and paid him the higher sum.
This won’t do. The board is a creature of the state. Board members serve at the pleasure of the Government. If they won’t obey the Government’s wishes they should resign. If they don’t resign, they should be sacked.
I disagree that directors of crown entities are simply there to do what the Government wishes. This is the entire reason we have directors and separate entities, rather than just Government Departments.
Commercial companies (including funds) are there to do what is best for the health of the company. The views of the shareholder, especially a sole shareholder, should be given great deference but should never be binding. Otherwise why have directors.
I’m not saying that some directors might not be reappointed, with this being a factor. But the Dominion Post goes too far by saying that the entire board should be sacked over this one issue.