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No cronyism – yeah right

Katherine Rich MP
National Party SOEs Spokeswoman
20 June 2006

No cronyism – yeah right

Trevor Mallard’s denial that state-owned enterprise boards aren’t weakened by cronyism was dealt a body blow today by findings of a Victoria University survey of SOE directors.

Dr Richard Norman, of Victoria University’s Management School, surveyed directors of nine SOEs. The directors were concerned appointments were being made for political or diversity reasons – not for their capabilities.

Dr Norman said: ‘Responses indicate the process for selection is too arbitrary, lacks adequate input from the chair and board, and is too heavily weighted towards political acceptability and correctness rather than capability.’

“That’s a polite way of saying boards are bogged down with party-friendly hacks who don’t have the business skills or judgment to make multimillion-dollar decisions,” says Mrs Rich.

“While SOEs Minister Trevor Mallard says he’s appointing good Labour Party people, clearly board members who sit around the board table with them don’t think so.

“He continues to bat away criticism of cronyism, but here it is confirmed in black and white by the SOE directors themselves.

“Perhaps he should start talking to his boards, and he might find out a thing or two about what the consequences of his cronyism is.

“One of National’s biggest concerns with Mr Mallard’s plan to expand SOE activities is whether they have the commercial aptitude to do so.

“We know Mr Mallard hasn’t, but to have directors themselves questioning the appointment process raises even more concerns.”

ENDS

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