Robert MacCulloch
Robert MacCulloch is a native of New Zealand and worked at the Reserve Bank of NZ before he travelled to the UK to complete a PhD in Economics at Oxford University.
The Mood of the Boardroom Survey and recent remarks by some of this nation’s CEOs reflect on the (dubious) quality of New Zealand’s boardrooms more than anything else. Namely that most are woke and weak.
The fact that our CEOs put ACT Party Leader David Seymour outside the “top 10” of “impressive” members of parliament, with a rather poor score of 3.4 out of 5, reflects just one thing. That our CEOs nearly entirely vote National and lack imagination. A bunch of them even called Seymour “divisive”. How revealing.
One of the most talented leaders of a political party for a generation in NZ – who studied engineering & philosophy – who’s the real deal – trying to untangle the constitutional and clarity-of-property-rights mess we’ve landed ourselves in, is labelled “divisive”.
What it reveals more than anything is that NZ’s Big Corporate CEOs will not themselves push productivity-enhancing reforms in their own firms, which ultimately is what the ACT leader is trying to do for NZ, should they be labelled “divisive”. They’d prefer, instead, to be Mr Nice Person. Look at the qualifications of many of them – the typical one being in accounting. Other than that, it’s law. Lawyers often get on boards because Kiwi firms want someone to help with compliance – not a person with imagination about where the future of the company should be.
Since the Mood of the Boardroom Survey, a bunch of CEOs have come out as supporters of higher taxes, particularly capital gains taxes. Big ANZ Bank Monopoly Boss Antonia Watson, said that taxing properties at the point of sale was fair. Talk about virtue signaling. When you’ve made record profits out of people’s mortgage misery arising from oligopoly powers to the extent your share price has risen over 50 per cent the last several years, and you shake people down for outrageous bank fees in the midst of a cost-of-living crisis, you then have the audacity to say that others should pay capital gains taxes to make things fairer.
Not to be outdone, ASB chief executive Vittoria Shortt says NZ has to collect more tax to invest in the infrastructure the country so desperately needs. Seems she’s not heard of France where motorways are managed by private companies (under government concessions) and are responsible for the upkeep, modernization and safety of the roads. In exchange, they collect tolls from road users, which ensures that the cost of maintaining high-quality infrastructure is shared among those who use it, rather than relying on funding by taxpayers.
If the Big Bank Oligopoly Bosses want to practice Corporate Social Responsibility, they should do so correctly. The market failure applying to them, which our government is having problems correcting, is monopoly powers. Voluntary actions that are good for society should, in their case, be confined to not exploiting those powers – by bringing down bank fees and surcharges. However, since doing so would lower their profits and their personal pay cheques, the CEOs of the Big Banks (and a bunch of other large NZ firms) don’t want to go down that road. Instead their plan is to shake others down to repair the social damage that they are doing by advocating the public pay higher taxes.
Before the Productivity Commission was de-commissioned, it identified lack of “managerial capability” as a contributor to our low productivity. In other words, though its tempting to blame the government for getting in the way of business, there’s a lot about Kiwi business that is about getting in the way of itself. Many of our CEOs and boardrooms are not capable. As a top 10 rich-lister once observed to me, “When you have the wrong person at the top, things will never work.”
The staff can’t make up for a boss who is the wrong boss. One thing that struck me when I used to attend the meetings of the NZ Initiative was the degree to which the Big Chief CEOs of NZ Incorporated had so happily embraced all manner of woke causes – not because they believed in them – but because such causes had become a way of furthering their own corporate careers. Spare New Zealanders the Mood of the Boardroom. We should be grading them – who do they think they are grading us and David Seymour?
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This article was originally published by Down to Earth Kiwi.
