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No sale policy a significant improvement

20 June 2006

No sale policy a significant improvement - research

State Owned Enterprises Minister Trevor Mallard welcomed research out today that found Labour's policy of holding onto State Owned Enterprises rather then keeping them under threat of sale - as under National - was a significant improvement for their boards.

"Under National, none of the State Owned Enterprises knew if they were about to go up for sale. When Labour was elected in 1999 we made it clear that we would not hock off the family silver," Trevor Mallard said.

The research said the move to a "long term hold approach has seen one significant improvement in that boards feel they are in control of decisions about strategy and have the opportunity to test strategic plans proposed by management."

Trevor Mallard said appointments to SOEs by their nature were made by the government of the day since the SOEs had to follow government policy and the government was the shareholder. This had not changed since National was in government when SOEs, under National policy, had to operate as if they might have be sold at anytime.

"I would also note that during my time as State Owned Enterprises Minister, I have worked very closely with the relevant SOE chair to appoint directors that meet the skills needs of the board. Skills and expertise, not political leanings, is the overriding consideration."

The survey found that " few directors feel that SOE strategic and operating decisions are negatively influenced by political 'interference' in the measurement and evaluation of performance."

Another comment in the survey was that political appointees had "generally turned out to be competent directors".


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