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Clearing the decks at Mighty River

Instead of having to fight a rearguard action and defending its directors, boards appear to be moving pre-emptively to improve their attractiveness to investors.

As reported in Friday's "new-look" National Business Review, activist institutions wielding lists of blacklisted directors are prompting nervous companies to clear their decks before attempting capital raisings.

A flurry of board changes at Snakk Media, which plans to seek a compliance listing on the NZX alternative market, have all the hallmarks of this, as it cuts ties with directors and shareholders associated with controversial company SeaDragon, a major Snakk shareholder.

Maybe the resignation of Mighty River Power director Jon Hartley, who will step down later this month, is the start of a similar process at the state-owned enterprise, which is first on the block for partial sale in the government's stuttering mixed ownership model.

Mr Hartley is a former chief executive of Brierley Investments, who left in 1999 after the rationalisation of the group's New Zealand's assets. He jumped ship to loss-making state-owned enterprise Solid Energy and left shortly after, following a strategic review.

He went on to chair Sky City Entertainment Group, now SkyCity, and joined Pacific Road Corporate Finance as a director.

He is currently a director of ASB Bank, Chorus and Sovereign Assurance Company.

High regard

There's no suggestion Mr Hartley is on any directors' blacklist.

He says he has commitments with World Vision International and its micro-finance subsidiary, VisionFund International, of which he is vice-chairman.

Mighty River chairwoman Joan Withers says Mr Hartley is held in high regard by the board and the company, and has gained from his experience and contribution over his three years at the board table.

Yet you can't help wondering about the timing – just a few months before an expected IPO.

As mentioned in the NBR print edition, Mighty River directors Ms Withers and Trevor Janes once sat on the boards of failed carpet-maker Feltex and finance company Capital + Merchant, respectively.

One wonders if they might be checking their busy schedules over the coming months.

One veteran Auckland businessman tells NBR ONLINE Ms Withers and Mr Janes are both "very solid" but Mighty River will be moving before any IPO to deal with any perceived board weakness.

Some years ago, Chris Swasbrook, a member of the NZX's prospectus watchdog committee, called for directors who served on the boards of collapsed finance companies to be banned from the boards of listed companies.

NBR ONLINE attempted to contact Mr Hartley but he is travelling in Myanmar.

More by David Williams

Comments and questions

Too many "celebrity directors"; a clean out would be in order.

David Williams seems to drawing a long bow on this one. Had he said the Dame Jenny Shipley had resigned from her role as Genesis Energy chairman, because she knew and approved of the actions that led Genesis to be judged guilty by the EA of committing a UTS ( taking advantage of a planned transpower restriction at Huntly to make hay,19000+ times normal spot prices, at the expense of their spot customers by taking advantage of an Unfair Trading Situation) ; or because her governance record is in tatters with Mainzeal/Richina Pacific; or that the China Constuction Bank of which she is a director backed Natural Dairy whose application for OIO approval was turned down because of the shonky character's behind it; or that she had started a company ( Pure something) with one of the directors of Natural Dairy, who later was charged with bribery and money laundering in HK etc. etc. And that because of all these unfortunate associations, implications and perceptions, the govt would not want Shipley at the helm when Genesis comes to be partially floated, then David William's might have a more credible story. david you should check it all out.

Good and thought provoking piece by David Williams. Why is Alasdair Thompson so intent on deflecting sensible questioning of SOE director legacies? A more open stance is warranted. Joan Withers is a director who inspires confidence despite her brief time at Feltex. Janes on the other hand inspires the opposite of confidence with repeated misteps. The bottom line should be talent. Any director - talented or not - is capable of being in the wrong place at the wrong time - the next question ought to be if that (or how they dealt with that) tells us something about that particular director's value.