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Mega: NZ’s best shot at a web giant? p42 Corruption: NZ’s dangerous blind spot p54 Chairing high-performing Synlait p57

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Rights we take for granted


f we don’t stand up for our civil rights we will lose them. They’re one of those things that you take for granted when you have no need to invoke them. They’re sometimes hard-won but easily lost when ordinary citizens get complacent or too trusting of the motives of those in positions of power. The default position on those holding power should always be a cynical one. Even for those who enter the political fray with a strong desire to do a public service, power eventually corrupts. It’s axiomatic. Given Keys ongoing approval rating you’d have to conclude that a majority of the citizenry aren’t perturbed by the GCSB legislation and the expanded powers it gives the state to access private citizens’ communications. And maybe there isn’t too much for the average citizen to sorry about under a relatively benign regime. But it doesn’t take too much imagination to consider how we’d feel under more autocratic rule. While Key’s constituency might feel relaxed about a National Government having increased powers of surveillance over its citizens, how would they feel about a Labour/Greens socialist alliance having the same power to spy on them? Not that different from the Muldoon era when he would take exception to particular journalists and ban them from press conferences. It’s ironic that the spectre of ‘Big Brother’ in George Orwell’s 1984 should be invoked during a Tory government rule in both the UK (the media did the spying / hacking there) and a ‘centre-right’ government here in NZ. It’s clear that

the old left vs right ideological divide is well and truly dead when the parties that supposedly stand for individual freedoms are those most happy to approve legislation that seriously compromises those freedoms. With the Bradley Manning and Edward Snowden whistleblower cases making headlines worldwide, concerns are growing that the balance between personal freedoms and state power is, in the words of Peter Huck writing for the Telegraph Group, “dangerously out of whack”. He asks the most critical question in this current scenario: “who holds ultimate power in a democracy, citizens or elected representatives?” Exactly who works for who? Now that the increased GCSB powers have became law the debate has changed a little; things will quieten down until there’s another specific case for the media to focus on. But there is considerable unease in the higher echelons of influential media groups here. In a recent Business Herald column John Drinnan wrote that both the TV3 news boss and NZ Herald editor in chief are very concerned about what Drinnan describes as “a creeping campaign against media freedom that began about four years ago”. We must be ever watchful not to lose some of those rights we take for granted in a country like ours, but don’t realise their value until they’re gone. A MEDIAWEB MAGAZINE PUBLISHER & EDITORIAL DIRECTOR Toni Myers CONTRIBUTORS Bill Bennett, Reg Birchfield, Bob Edlin, Susan Edmunds, Jacqueline Ireland, Colin James, Ruth Le Pla, Iain McCormick, Tony Street GENERAL MANAGER SALES Lisa Morris, 021 651 601, BUSINESS DEVELOPMENT MANAGER Rod Myers, 027-484 8046, DESIGNER Melissa McGregor COPY & WEB EDITOR Gill Prentice PRODUCTION MANAGER Fran Marshall NEW SUBSCRIPTIONS SUBSCRIPTION ENQUIRIES

Phone 09-529 3000, Fax 09-529 3001 PO Box 5544, Wellesley Street, Auckland 1141

NZ MANAGEMENT magazine is independently owned by Mediaweb Limited and is published 11 times a year. It is the officially recognised magazine of the New Zealand Institute of Management Incorporated. Editorial material does not necessarily reflect the views of NZIM. Copyright © 2013: Mediaweb Limited. All material appearing in NZ MANAGEMENT is copyright and cannot be reproduced without prior permission of the publisher. Editorial contributions are welcomed. Letters to the editor are also welcomed, but pen names are not acceptable. Subscriptions: One-year NZ subscription (11 issues) $78.15 (GST incl). Overseas (airmail only): Australia NZ$130; rest of the world NZ$250. Enquiries: Mediaweb Limited, PO Box 5544, Wellesley Street, Auckland 1141, New Zealand. Phone: 09-529 3000, Fax 09-529 3001, New Zealand Institute of Management enquiries to: NZIM Inc, Box 67, Wellington; Northern, Box 6600, Epsom; Central, Box 11781, Wellington; Southern, Box 13044, Christchurch.

Toni Myers, Publisher Vol 60 No 7/8 • ISSN 1174-5339 (Print), 1179-3910 (Online)

Mediaweb supports the following not-for-profits:

contents 24 COVER STORY:

Diversity Pays ANZ & EEO Trust Diversity Awards 2013 The calibre of this year’s entries show recognition at last that diversity pays.






INBOX: News and views

18 NZIM: Big data: Management’s new big gun Reg Birchfield 48 EXECS ON THE MOVE 20

49 EXECUTIVE DEVELOPMENT OPINION 20 POLITICS: National’s highs lack sparkle Colin James 21 ECONOMICS: Surplus? What surplus? Bob Edlin 60

22 LEADERSHIP: Leadership’s lost art Reg Birchfield 23 THOUGHT LEADER: Protecting NZ’s integrity Suzanne Snively ADVICE 59 NZIM’S FOCUS ON MANAGEMENT

Judging for Young Executive of the Year; Regional news; Training and development courses; Member comment from Jolyon Manning.

AUGUST/SEPTEMBER 2013 • Vol 60 No 7/8

features 36 It’s personal: Building business ties in Asia 25 Ruth Le Pla joined a trade mission to Jakarta to find out what New Zealand companies can learn from the success of others.



42 MEGA: NZ’s best shot at a web giant?

Bill Bennett talks to Dotcom’s key technology experts in the second in a series looking at the business case for what the controversial organisation could offer NZ.

45 Better business cases: Setting big projects up for success.

Major project failures are common. Tony Street advocates for more robust business cases to enhance the chance for success. 42

The Director 52

Judith Collins Diversity delivers dividends at the board table; introducing fresh thinking and better connections to markets.

54 Corruption; NZ’s dangerous blind spot. Ruth Le Pla looks at how directors can engage safely with at-risk countries. 57 Chairing high-performing Synlait: Graeme Milne in conversation with Iain McCormick.





High achiever forged own path to exec suite Eventfinda’s James McGlinn isn’t afraid to admit that as a software engineer, he hasn’t always been great at inter-personal communication. He’s been programming software since he was six, so there is no tech problem he can’t handle. But for a long time, he was not quite as confident when dealing with businesses’ human elements. The way he has tackled that challenge was partly what won over the judges who named him this year’s northern region NZIM/Eagle Technology Young Executive of the Year. McGlinn says: “This is my third business, so I’ve had small teams before but it wasn’t until I had to step up from chief technology officer into the CEO role at Eventfinda, that I really had no choice but to get better at it.” He says his lack of traditional training is his biggest weakness. “I did information systems and computer science at university so I didn’t have that kind of holistic, MBA-style background.” To build his management skills, McGlinn reads as much as he can, has joined organisations such as NZIM and the Institute of Directors to meet people from whom he can



learn, and has received training scholarships from NZTE and ATEED. McGlinn has been involved with Eventfinda since 2006, when he joined chair Michael Turner as co-founder and chief technology officer after selling his web development firm, Nerds Inc. Eventfinda is an online event marketing, content syndication and ticketing business. Over time, the business has grown from two staff to almost 20, expanded to five countries and sold more than $13 million worth of tickets, 30 percent of that turnover in the last six months. But it hasn’t come without its share of trouble. Being able to turn things around in the face of looming problems was what earned him the role of chief executive, which he took up on March 1 this year. McGlinn explains that about a year ago, expenses were well ahead of revenue, speculative investment had not paid off as expected and the board was divided. There was mistrust and senior management was not communicating well. McGlinn developed a strategic plan, including significant restructuring and new budgets and forecasts. It was enough to persuade the company’s board of directors and Eventfinda’s shareholders that the company could be profitable again, and soon. He was given the go-ahead to implement his plan, but it required a test of his hard-won interpersonal skills when he had to disestablish several positions. The company emerged stronger, and the experience built employees’ trust in him as chief executive. McGlinn says: “This leadership has led to a stable business, on budget and on track to an operating surplus in July for the first time in many years.” Co-founder Turner said McGlinn had been instrumental in Eventfinda’s growth into a household name. He said one of his great strengths was what he described as his “uncanny” grasp of strategic timing. “He has

James McGlinn.

taken it from a boot-strapped start-up at the kitchen table into a household entertainment brand with over $1 million in revenue.” And while McGlinn might worry that he has not had the usual path to the top, Turner said he had proved to have a unique talent for communication, across all levels of the business. “The ability to cross over from understanding the emerging technology landscape to executing a business plan as an executive is what makes James unique.” McGlinn was responsible for hiring every member of Eventfinda’s design and development team but in eight years only one designer has ever chosen to leave. McGlinn says: “We now have 18 employees – 12 fulltime and six part-time – and I am exceptionally proud of each and every one of them.” McGlinn has also been nominated to the company’s board of directors. Other finalists for the northern region NZIM Young Executive of the Year title were Shawn Hamman from Yellow and Euan Armstrong from Guardian Group. McGlinn will compete against NZIM southern winner BTW South’s Kate Scott and Wellington’s central region winner Mark Julian, of Landcorp, for the national title, announced at the Deloitte/ Management magazine Top 200 Awards on November 28. M



Do your homework before you choose an insurer While the advantages of offering subsidised health insurance to employees can be significant – greater productivity and less sick leave being the most visible – it’s important to choose the right insurer. Take the time to consider an insurer’s financial stability and long-term sustainability. Insurance is one of those things you hope you never need but, when you do, you want the insurer to be there for you. One of the key elements to look for when assessing financial stability is to look for a financial strength rating. In New Zealand, a financial strength rating is a requirement for most banks, finance companies, building societies, credit unions and other non-bank organisations taking deposits from the public. The rating for insurers must come from one of three agencies approved by the Reserve Bank – Standard and Poor’s, A.M. Best and Fitch. A financial strength rating is an


what is going to best benefit your business, however it doesn’t hurt to ask a few questions. For more information on the benefits available through a Southern Cross work scheme call us on 0800 323 555.

Southern Cross Medical Care Society (trading as Southern Cross Health Society) has an A+ (Strong) financial strength rating given by Standard & Poor’s (Australia) Pty Limited. The rating scale is: AAA (Extremely Strong)

BBB (Good)

CCC (Very Weak)

AA (Very Strong)

BB (Marginal)

CC (Extremely Weak)

A (Strong)

B (Weak)

R (Regulatory Action)

Plus (+) or minus (-) signs following ratings from “AA” to “CCC” show relative standing within the major rating categories. Standard & Poor’s is an approved rating agency under the Insurance (Prudential Supervision) Act 2010.

Diversity pays Fifty percent higher returns and a four percent increase on earnings – sounds like a pipedream in this environment? Not so if your organisation is committed to diversity . according to a two-year study of 180 publicly traded companies. This is just one diversity outcome that the EEO Trust highlighted as it prepared for its 16th annual Diversity Awards in August and as the judging turned up some innovative diversity initiatives. The EEO Trust is dedicated to helping build workplaces that are reflective of the diverse society we live in but is also committed to proven practice. “We want to bring you powerful ideas that work.” The Trust says that while it makes intuitive sense that bringing together diverse skill sets, cultures and experiences would drive success it is exciting to read this international report which firmly backs up the theory with hard evidence. The Diversity Awards, formerly known as the Work and Life Awards, were presented at a gala dinner in Auckland on August 29. Read about the winners and their successful diversity programmes on page 24. M



Every BNZ store in the country closes for one day on September 4. It’s an initiative the bank committed to so that its entire workforce can ‘roll up its sleeves’ to do whatever its various communities have requested, in order to make a difference. “Instead of being bankers,” the BNZ explains, “we’ll be whatever you’ve told us you need.” Over the last four years, the bank has helped out on more than 1350 different projects in its communities. Anyone, or any project, can make a submission and let the Bank know what needs doing. You don’t need to be a BNZ customer to have your project chosen – but your project does need to be something that will benefit the community. Closed for Good will be supporting a wide range of projects for community groups, sports clubs, schools, individuals, not-for-profit organisations or similar groups. BNZ customers don’t lose all services on the day. They will still be able to bank by internet, phone or at an ATM. M

independent opinion on the capability and willingness of a financial institution to repay its debts. Ratings use letters and numbers to indicate risk and the risk increases as the rating goes down from A towards C or even R (for regulatory action needed). It’s easy enough to check an insurer’s financial strength rating as they are obliged by law to display it on their website. Southern Cross Health Society has maintained an A+ credit rating from Standard and Poor’s for well over a decade. You may also want to ask what they pay in claims versus premiums because there’s no regulation around what insurers have to pay out, so the value can vary. Some insurers pay out an average of around 60 cents for every dollar of premium they receive while others pay in excess of 70 cents. In the half year ending December 2012 Southern Cross paid out 88 cents in claims for every dollar received in premium. Ultimately the decision should be about

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CEOS FOCUS ON SAFETY Thirty senior leaders from throughout New Zealand stopped work for a day last month, to spend time focussing on workplace safety leadership. The event was hosted by Rob Jager, chair of both the Business Leaders’ Health and Safety Forum and Shell NZ, and was held at

the Pohokura natural gas field in Taranaki which produces more than 40 percent of New Zealand’s natural gas. The discussion was focused on striving for zero harm workplaces across the country drawing on Shell’s experience from over 100 years of operation in New Zealand.

CEOs at Pohokura: L-R; Dion Tuuta, Parininihi Ki Waitotara Incorporation; Andrew Crisp MBIE; Graham Wells, Wells Group; Ian Cathcart, Veolia Water NZ; Martin Inia Shell, Rob Jager, Shell and Business Leaders’ Health & Safety Forum.

All leaders agreed that creating zero harm workplaces is about driving a working culture where the whole team is committed to doing everything it can to prevent accidents. They agreed it’s about caring for people and making it [zero harm] part of the DNA of the company. As leaders, showing personal passion and an unwavering commitment to safety, on top of a ruthless adherence to a set of safety processes within the workplace, is the key to success. There was a cross section of CEOs in attendance from around New Zealand including representatives from Fulton Hogan, Methanex, Fonterra, Ministry of Business Innovation and Employment and local dignitaries. For more information please visit: M

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Workplace literacy risk Low literacy is not just a workplace issue in low or semi-skilled work levels. The recently released Independent Taskforce Report on Workplace Health and Safety identified low literacy and poor communication skills as a risk factor in workplace accidents and expressed concern about capability and capacity gaps at all levels – from managers to front-line workers Research* shows that most New Zealand adults can read and write straightforward, familiar information but around half have literacy and/or numeracy gaps that affect their ability to manage the more complex demands of work including those needed for health and safety management. Keeping employees safe on the job will require new ways of thinking about capability and capacity, according to Katherine Percy, chief executive of adult literacy, numeracy and communication support B M W2 3 3 5 _ Nprovider, Z M _ Workbase. M6 C o u p e Literacy and language issues make it difficult to

reduce workplace accidents because people don’t understand the written information about hazards and can’t effectively communicate about risks. It also means too many people struggle to correctly fill in the health and safety incident forms that provide valuable information to employers. The report pointed out that gaining meaningful improvements requires addressing capability and capacity among workers, managers and health and safety practitioners.This included knowledge of workplace health and safety risks and specific hazards, and insufficient knowledge of workplace health and safety regulatory requirements. The Taskforce’s recommendations about new regulations and Codes of Practice suggested that we can expect more guidance documents. This will means there will be a lot of work to translate those documents into information that is practical and fit for purpose for everyone who will need to understand 1 2and 0 1apply 3 - new 0 7work - 1 practises. 1 T1 5 : 3 7 : Employers and managers can help to improve

employee’s workplace safety knowledge and skills by: • Not assuming that employees understand the health and safety information they are given. • Checking understanding by asking people to say what they believe needs to be done (or avoided) in relation to the task at hand. • Incorporating the relevant literacy, language and numeracy development into all health and safety coaching and training. • Ensuring training allows enough time to develop the required knowledge and skills. • Taking steps to improve supervisors’ communication skills because they have a key role to play as health and safety leaders. • Reviewing all written health and safety material (including forms) to ensure they can be quickly and easily understood by staff at all levels. Pilot test them on end users. 4 1 + 1 2 : 0 0

* Adult Literacy and Life Skills (ALL) Survey: Overview and International Comparisons. Ministry of Education, March 2008.

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NEW APP TAMES TAX PAIN An historic vote on the proposal to join the New Zealand and Australian Chartered Accountant professional bodies into ‘One New Institute’ is to take place in October this year. The vote will be held from 1 October through to 1 November providing members with one month to vote on the proposal. Results will be announced in November. The Institute of Chartered Accountants Australia (ICAA) and New Zealand Institute of Chartered Accountants (NZICA) announced last month that their boards and the NZICA Council had unanimously agreed to go ahead with a full member vote based on three months of consultation with members on both sides of the Tasman. “The feedback from our members has indicated widespread support for going to vote on the proposal to form a New Institute. As a result, and following further work, we are unanimous in our decision to put it to a member vote,” says NZICA board chair Graham Crombie FCA. “It is an exciting and historic vote that potentially consolidates our successful trans-Tasman collaboration into one stronger body with the capacity to deliver more to members, the businesses they serve and our economies as a whole.” ICAA President Tim Gullifer FCA says the timing for the establishment of a new institute is right. “In a global environment we need to stay ahead and the ‘One New Institute’ would give us the scale and strength we need; a larger more sustainable body with increased policy formulation and advocacy capability as well as greater global influence.” If the member vote is in support of the proposed new institute, implementation is expected to begin in 2014. M

Paying your provisional tax is now easier than ever with the new Pay My Tax app from Tax Management New Zealand (TMNZ). Provisional tax can be a headache for taxpayers because it’s often difficult to predict what your final payment will be – especially for those who work in volatile markets or seasonal industries – like retailing or real estate. If you don’t pay on time, the IRD charges high interest costs and late payment penalties. With the Pay My Tax app, taxpayers can shift the payment dates for their provisional tax to a time that better suits their business – and avoid paying IRD’s interest or penalties. By leaving cash in the business for as long as possible, they can pay for the things they really need to do. When people use the app, they can even pay the cost of financing their tax by credit card. The app also helps avoid the high cost of borrowing to pay for provisional tax. The cost of using the Pay My Tax facility is low. Available from 5.4 percent, it’s less than the cost of a traditional business overdraft facility – and it’s tax deductible. Chris Cunniffe, CEO of TMNZ says the Pay My Tax facility is the ideal arrangement for an app. “TMNZ is registered with the IRD and will make the tax payment to the IRD for the customer. So there’s no need to do any credit checks or have face-to-face discussions with customers. With the increasing demand from customers for self-service, the app was the obvious way to go.” The new app is available for both Android smartphones and iPhones. TMNZ says it will extend its Pay My Tax self-service channel over the next few months. You can check them out at M

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Top US CEOs shun social media US digital news outlet Quartz reports that 68 percent of the Fortune 500 CEOs aren’t on any social networks whatsoever. When Warren Buffett made his Twitter debut


back in May, he gained over 30,000 followers in less than 30 minutes. He’s only tweeted twice since, and has more than half a million followers. But of the 500 leaders of the biggest US companies, only 28 have a Twitter account, and only 19 of them actually use it, according to a report released on August 7 by Domo and Yahoo’s Marissa Mayer, Buffett, and Rupert Murdoch are among the few who do. But 19 active users out of 500 CEOs puts the rate at under five percent. The report found that 68 percent of them have no social media presence whatever— whether it be on Facebook, LinkedIn, Twitter, or Google Plus. For those who do use social media, Facebook engagement isn’t just low, it’s falling. A mere one percent, or five CEOs, use Google Plus.


The only platform the big bosses seem comfortable using today is LinkedIn. The number of CEOs on the social network for professional contacts has climbed 25.9 percent since last year to 140 of the top 500 CEOs. “LinkedIn remains the one social media platform that is actually more popular with CEOs than the general public,” the study said. LinkedIn’s ‘influencer’ programme, which features writing by businesspeople, has likely had a large effect. CEOs are rushing to become part of LinkedIn’s “prestigious club of experts.” Why more CEOs haven’t embraced social media is a bit of a mystery, says Quartz. Even without Buffett , Fortune 500 CEOs gain followers almost 20 times faster than average users. And leaders like Marissa Mayer have successfully used the platform to communicate with the public. M

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‘Creepy’ social marketing By Mark Cameron, CEO of Working Three, a digital strategy and social media agency. He writesregularly for numerous magazines including BRW, Marketing Magazine, Business to Community and Social Media Monthly.

When former NSA IT specialist Edward Snowden told the world that the US government was collecting vast amounts of data on all of us in an unprecedented eavesdropping program called “Prism”, Orwell’s 1984 and the omnipresent “Big Brother” came to mind. Thoughtcrimes and the Ministry of Truth aside, many were not surprised to learn that the US (and likely every other large government) was spying on its citizen’s digital activities. The volume of data that the likes of Google and Facebook gather about each and every one of us is astronomical. A recent article in TechCrunch reported that Facebook has been going beyond collecting the data of its users. It is also collecting the data of the people who are simply connected to its users, creating ‘shadow’ accounts that can be activated in the event that those people sign up. Online companies rely on the collection of our data to generate their business. Access to their users is what they are selling to advertisers. If a service is free then we, the users, become the product not the customer. At what point does all of this data collection simply become scary, and how can companies that are investing in digital marketing

ensure they aren’t perceived as Orwellian, or “creepy”? Brands need to realise that they are not Google, and they certainly aren’t the NSA. Many have invested heavily in “AdTech” (marketing automation, data gathering and big-data analytics software tools), but all brands can choose how they deploy these tools. With the right technology investment a brand could develop a “surveillance and precision targeting” approach to marketing. In fact, many brands are already doing this with varying degrees of success. In the short term just focusing on immediate transactional targets may help your organisation reach its quarterly targets. But to keep hitting the targets you’ll need more data, better models and eventually your brand may start to become a little bit “creepy”. So this approach raises serious questions about brand behaviour in the long term. Another, more enlightened approach, is to focus on the long term relationship your brand has with your customers. Use the data you collect and insights you gain about your market to develop new digital services for your customers. Use a large percentage of the marketing budget that is likely being wasted on messages that are ignored, and invest it in building software that will genuinely surprise and delight. Make sure you are investing in the relationship, not just the technology. M

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DISRUPT-IVE TECHNOLOGY The event that helped catapult start-ups such as Dropbox – now a mega cloud file-sharing business – to business success takes place this month in San Francisco. Online technology publisher TechCrunch’s annual cutting edge event, Disrupt, is one of the most anticipated technology conferences of the year. From September 7-11, TechCrunch will host an all new slate of promising startups, influential speakers and guests. HACKATHON The popular ‘Hackathon’ kicks off first. It brings together hackers and developers from all over the world, where they join teams to hack a product within a 24-hour time slot. Once the Hackathon ends, every team presents their hack to a panel of expert judges and audience members. The winners go on to present their product on the Disrupt stage. Hackers make everything from useful services to hilarious products and they could just end up as big as the likes of GroupMe. Created during the hack day at Disrupt three years ago, GroupMe has become a real business, and raised an angel round of funding from top tier investors. GroupMe is a simple way to create a private SMS group with friends, colleagues or family. Members can also initiate a group conference call to all members at any time. GroupMe helps people stay connected. Its two core offerings are: GroupMe, the group mobile messaging service, and Experiences, a service for finding, planning and purchasing group activities. Founded in May 2010 at the TechCrunch Disrupt Hackathon, it was acquired by Skype in August 2011. GroupMe was acquired by Skype, which was subsequently acquired by Microsoft in October 2011 The Hackathon is followed each morning by the main event, which starts every morning with panels of special speakers and guests, one-on-one chats featuring TechCrunch writers and editors, special guest speakers and judges, leading venture capitalists and entrepreneurs addressing the most important topics facing today’s tech landscape. In the afternoons, the Startup Battlefield presentations begin, with the final presentations held on the last day of Disrupt. STARTUP BATTLEFIELD Startup Battlefield is the very heart of TechCrunch Disrupt. Some 30 companies, chosen from hundreds of applicants, launch their products on the Disrupt stage before a live and online audience, including a panel of expert judges. After demos, pitches and tough rounds of questions, TechCrunch’s editors, working with the VCs, seasoned entrepreneurs and product experts, select six companies

for a final, drama-filled round on the third and final day of Disrupt. Only one Battlefield contender takes home a $50,000 check and the coveted Disrupt Cup. STARTUP ALLEY Startup Alley is jam-packed with early stage companies showing off their talent and technology to attendees. Browsing through Startup Alley introduces a range of exciting companies to the marketplace, many of which are launching at Disrupt for the first time. Around 75 startups demo on Monday and a whole new set demo on Tuesday. Each day an ‘Audience Choice Winner’ from Startup Alley will be chosen to present onstage in Startup Battlefield for the chance to win the $50,000 grand prize and the Disrupt Cup. New Zealand has its own leading edge tech event in Webstock, staged every March. It attracts international attention, but it’s profile is low in New Zealand outside the geek community. If you want to keep up with techie trends you could do worse than sign up to the free TechCrunch enewsletter. M

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AMP promotes diversity in leadership development Responding to the challenge of talent retention and promotion of diversity in leadership, AMP has launched a bespoke leadership development programme for its senior women. The AMP Pathways Programme has modules on key leadership competency areas and oneto-one coaching. Participants are required to undertake a business challenge, with regular reporting to the AMP leadership team on progress. The inaugural participants of the programme in 2013 will be trained in coaching so that they can in turn coach and mentor subsequent years’ participants. AMP’s executive legal counsel Therese Singleton, one of the key drivers of the programme, explains: “AMP is absolutely committed to developing and supporting talented women within the business. It’s in our interests as a business to foster talent and to ensure that our leadership pool is representative of, and responsive to, AMP’s diverse customer base of over 370,000 New Zealanders.” AMP has worked with Strategic Direction Consulting director, Yvonne McLean, to develop and implement the programme. McLean, who is also the programme director for Global Women’s Women in Leadership Initiative, commented, “It’s really encouraging to see large corporates like AMP lead by example. Positive recent initiatives such as the launches of DiverseNZ Inc. and the Women of Influence Awards have increased the call for greater diversity in senior management, but individual businesses need to take action to create that diversity within their own organisations. AMP has provided a great example stepping up and taking the initiative, and is a role model for other organisations, which I hope will follow suit.” Talented women are nominated from all areas of the AMP business to take part in the programme.The 2013 intake of 14 women from Auckland, Wellington and Christchurch, 14 | | AUGUST/SEPTEMBER 2013

Therese Singleton.

are from backgrounds including distribution, wealth management, finance, marketing, legal, HR, and customer services. “Including participants from all areas of the business, and the commitment to run the programme annually, will see benefits across the AMP workforce in New Zealand,” said Singleton. The AMP Pathways Programme complements existing initiatives designed to support diversity, such as a flexible approach to working arrangements and hours, including job-sharing, part-time work and work from home. Since 2009, AMP has also provided 14 weeks full paid parental leave, on top of the government entitlement. For AMP, the benefits are clearly evident in the high number of women who return to work at AMP following maternity leave. “AMP’s commitment to diversity is demonstrated by the high number of women in senior roles; last year 48 percent of senior roles were filled by women. The AMP Pathways Programme is about taking this to the next level,” said Singleton.

Singleton’s own career path provides inspiration for young professional women in the firm. In 2002 she was the first Irish citizen to qualify for the New Zealand Bar, which enabled her to transfer her specialisation in superannuation/pensions/tax to the New Zealand context at a formative time in this country’s history. She has acted as executive legal counsel for AMP Financial Services New Zealand since 2008, overseeing AMP’s legal, risk and compliance functions as well as customer response. AMP leads the market in workplace superannuation and retail managed funds in New Zealand, and is one of the largest insurance companies in the country. AMP’s total number of New Zealand customers in 2012 was 799,421, which included over 260,000 KiwiSaver customers. She played an instrumental role in the major AMP merger with AXA. She spearheaded the New Zealand due diligence and integration processes, which included an in-depth review of AXA’s New Zealand business and products, and working with regulators including the Commerce Commission, Takeovers Panel and Overseas Investment Office. She also led the first phase of the integration of the two businesses before returning to the executive legal counsel role for the merged entity. Singleton is an executive director of the AMP Financial Services entities in New Zealand, and a director of the Financial Services Council. She is a member of Global Women and recently won the Corporate Lawyers Association of New Zealand’s Private Sector In-House Lawyer of the Year award. M



BECOMING C2B – A POST FROM MARK CAMERON’S BLOG Mark Cameron founded his successful strategic social media agency, Working Three, prior to his start-up, MyWave, with software high-flier Geraldine McBride. He is considered one of the smartest social media thoughtleaders in the industry. An ever increasing number of businesses are reinventing the way they interact with their customers by leveraging the investment they have made in marketing technology software. The proliferation of social media and advances in “adtech” and “big-data” analytics means that brands are now able to gain insights into their customers in ways never possible before. As these insights have started to float to the top of the company management structure, it is becoming obvious that having a customer-centric strategy is an essential part of doing business in the alwaysconnected, post-GFC world. So what does being customer-centric really mean? Customers have more power today that they have ever had. The immediacy and scale of social media is breaking down old company structures and traditional value chains. The proliferation of consumer data is



adding to the pressure. Customer Relationship Management software, or CRM, was originally designed as a Business to Business [B2B] tool that was stretched and pulled until it eventually became a Business to Consumer [B2C] tool. But it was never really designed to manage today’s consumers who are generating (according to IBM) over 2.5 quintillion bytes of data every day – a number so baffling I can only assume it translates into more cat videos than anyone could actually watch in a lifetime. Even the terms ‘Customer Relationship Management’ and ‘Business to Customer’ seem out of place in today’s environment. They both clearly focus on the business being in control, the brand managing the relationship, owning the data and holding it in a central spot. This structure doesn’t work for today’s market. Facebook has given people the power to ‘unfriend’ the relationships that are not working for them. The customer of today wants control and to feel like she is managing her own relationships. And this trend will accelerate. Every time a technology has given more power and freedom to the individual the whole markets follow.

Mobile phones, the internet, search and social media have all played their part. Now a new customer-focused disruption is underway, fuelled by the data that all of us generate each and every day. Business leaders and smart observers know this already. Their conversations are focusing on becoming ‘customer-centric’, developing a cohesive customer experience strategy and allowing the customer to see their own data. It will soon become a clamour. We are entering an age where the customer really does come first. We need to come to grips with the customer having more control and actually “managing” the relationship. So I propose using the term Customer to Business [C2B] to describe the technology and strategic frameworks that are evolving to deliver this new world order. Let’s put the customer first. Focus not on spamming your customers but on providing real value. Don’t waste money on irrelevant marketing and more noise. Stop thinking about data ownership and spend more time on relationships. Put your customer first. Become C2B. M

Business. Leaders.

L&F il001M

We help develop both.

Auckland. Wellington. Sydney.


Big Data:

management’s new big gun Big data is revolutionising management. Leadership, talent management, decision making, technology use and company culture are being transformed by executives who harness the data flood and think analytically. The impacts, implications and opportunities big data delivers are both profound and imperative. By Reg Birchfield.


dvanced weaponry will, more often than not, underpin a successful revolution. And make no mistake, big data’s addition to management’s performanceeffectiveness arsenal is just such a killer application. Organisations that understand and effectively deploy the torrent of statistics they can now harness, are capturing competitive territory. On the other hand, executives that cling to old-fashioned and often flawed methods of metric choice will inevitably follow the cavalry into the Valley of Death. Thorsten Engel, Wellington-based consulting partner and leader of Deloitte New Zealand’s enterprise information management team, believes big data is revolutionising management and having a “massive” impact on organisational culture. “Big data challenges managers to be more fact based and savvy about the decisions they make.” Britain’s Economist magazine’s Intelligence Unit’s survey of big data in 18 | | AUGUST/SEPTEMBER 2013

2012 concluded that the global business landscape is “being shaped by data as never before”. The sheer magnitude of data being produced is staggering. Google’s chief executive, Eric Schmidt, believes the world creates 5 exabytes of data every two days. That’s roughly the same amount created between the dawn of civilisation and 2003. And as the volume of data generated accelerates exponentially, so the cost of data storage plummets. America’s Massachusetts Institute of Technology academics Andrew McAfee and Erik Brynjolfsson, believe smart leaders are using big data to drive a management revolution. “It is a transition that executives need to engage with today,” they say. But they also concede that, as with any revolutionary change, becoming big data-enabled presents some significant management challenges. And managers wedded to decisionmaking based on gut, intuition and inflated belief in past practice are

foremost among the resistors to change. “In an organisational culture where the loudest voice wins the argument and decisions are made intuitively, adopting an evidence-based approach and leveraging big data can be a huge challenge,” says Deloitte’s Engel. Big data tools are designed to support decision-making, not replace personal judgement, he says. “The tools are fed and informed by big data concepts that help managers make more consistent and sound judgements. Like an automatic pilot in a plane, they serve as back-up to ensure that things stay within a given set of parameters.” Businesses of almost every scale and size can utilise big data concepts, he says. “Even if you only sell coffee and snacks or run a franchise operation, it’s not uncommon to seek answers in big data on say, peer profitability, foot traffic and conversion ratios or how rental costs and overheads might compare.” Engel concedes that New Zealand managers’ response to big data is some-

what mixed. “Many managers pride themselves on their kiwi ingenuity and don’t always use deep analysis to find answers to complex questions. They are comfortable making decisions based on gut-feel and intuition.” But where Deloitte has introduced companies to big data techniques or undertaken deep analytics, it often finds that commonly held, existing beliefs are incorrect. In those cases, the consultancy corroborates intuitive assumptions with hard facts to both quantify and monetize the findings. McAfee and Brynjolfsson wrote in Harvard Business Review http://hbr. org/2012/10/big-data-the-managementrevolution last year that when data are scarce, expensive or not available in digital form, executives invariably rely on intuition or past experience. “People rely too much on experience and intuition and not enough on data,” they wrote. The big data industry’s word for organisations that make decisions based on intuitionfed opinions of senior executives or external experts is HiPPO – the highest-paid person’s opinion. Companies looking to deploy big data’s fire power face five management challenges according to these MIT researchers. They are: • Leadership – leadership teams must set clear goals, define what success looks like and ask the right questions. Big data’s power doesn’t erase the need for vision or human insight. • Talent management – find and attract professionals skilled at working with large quantities of information. • Decision-making – effective organisations put information and the relevant decision rights in the same location. • Technology – using the tools needed to handle the volume, velocity and variety of big data. • Company culture – big data organisations ask themselves “what they know” not “what they think”. There will be tension as management decision-making and leadership styles evolve toward more evidence-based and fact-based decision and move away from

“intuition, bravado and leaps of faith”, says Engel. “Initially, knowledge workers feel threatened by having their judgement second-guessed by algorithms,” he says. “But human intuition combined with evidence is a powerful tool. Once (managers) embrace the supporting role that big data and decision support tools provide, they become more enabled.” Engel believes big data erodes the advantages of size and scale. “Small, agile but intelligent enterprises can steal a march on large incumbent companies. They need to focus on their niche and work smarter rather than harder. The rise of digital media and marketing and microniches served by specialist companies proves that even small players can have a big impact.” And well governed organisations will, he adds, apply big data concepts to their risk and audit thinking. “The more organisations know, or can be expected to know by regulators, the more aware directors will be of inherent risks and issues. This in turn creates an expectation that organisations will act when major issues arise. Car manufacturers who failed to promptly recall vehicles even when evidence suggested a supply chain problem required response is a good example,” says Engel “We’re aware of the profound impact big data-based decision-making tools and techniques are having on management,” says NZIM chief executive Kevin Gaunt. “It will, along with other technologydriven influences, fuel the evolving management revolution. “Too many executives fail to appreciate the dynamics and extent of performance enhancing changes now facing managers. Like most people, managers would rather stay the course and face the risks they fear come with change. That approach isn’t good enough. A lot more effort needs to go into developing managers to meet the challenges of what is already and increasingly a fast-changing management world.” M Reg Birchfield Life FNZIM is a writer on leadership, governance and management.


Our Ouraim aimisisto tobuild buildmanagement managementcapability capabilitythrough membership, development and research. through membership, development and research. Our focus is to: •Our Research focusleading is to: management trends and practice and promote a constantly developing • Research leading management trends and model ofand bestpromote management capability for New practice a constantly developing Zealand. model of best management capability for New • Enable managers and aspiring managers to Zealand. participate in learning programmes, mentoring, • Enable managers and aspiring managers and events that information to participate in provide learningthe programmes, and experience need develop mentoring, and they events thattoprovide thetheir capability. information and experience they need to • To identify leading management role models develop their capability. provideleading awardsmanagement that recognise career • and To identify rolethe models and achievements of managers. and educational provide awards that recognise the career and educational achievements of managers. NZIM Inc CEO: Kevin Gaunt FNZIM, FAIM Email NZIM Inc Auckland Office CEO: Kevin Gaunt FNZIM, FAIM Contact: Tait Grindley Email PO Box 6600, Wellesley St, Auckland 1141 Ph 0-9-303 9100, 0800 800 NZIM Auckland Offices Email Contact: Tait Grindley Website PO Box 6600, Wellesley St, Auckland 1141 Wellington Office Ph 0-9-303 9100, 0800 800 NZIM Contact: Shaun Sheldrake Email PO Box 11781, Wellington 6142 Website Ph 0-4-495 8300, 0800 800 NZIM Email Wellington Offices Website Contact: Shaun Sheldrake NZIM Southern PO Box 11781, Wellington 6142 Regional Director: Michael Weusten FNZIM Ph 0-4-495 8300, 0800 800 NZIM CEO: Joseph Thomas AFNZIM Email PO Box 13044, Christchurch 8141 Website Ph 0-3-379 2302, Fax 0-3-357 8003 Email NZIM Southern Website Regional Director: Michael Weusten FNZIM CEO: Joseph Thomas AFNZIM PO Box 13044, Christchurch 8141 Ph 0-3-379 2302, Fax 0-3-357 8003 Email Website



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National’s highs lack sparkle Photo:


ational is the usual party of government. Since its first win in 1949 it has been in office 42 of 63 years – two-thirds of the time. Moreover, there is reason to hope for four years more. The annual conference in August was buoyed by polling averaging 45 per cent-plus. Ministers have been delivering business-friendly policy with vigour. But in the history lurks a warning: National’s vote share since 1949 has averaged only 1.3 per cent higher than Labour’s. National’s predominance during the first-past-the-post period was in part because it had fewer votes stacked up in safe seats than Labour, so it got more

National voters. John Banks’ antics over Kim Dotcom’s donations to his 2010 mayoral campaign maybe wipes him in Epsom, which is why ACT insiders want a more saleable replacement, if they can retire Banks. (Actually, National’s Epsom candidate, Paul Goldsmith, is ideologically more ACT than ex-National Banks.) At least one of the Maori party’s three

“National has to fix its fraying support.” of a seat for each vote. That delivered governing majorities in 1978 and 1981 even though Labour got more votes. Under MMP the calculation is very different. By election time in 2014 National and Labour will have had nine years each in office under MMP. To take that to 12-9 in a third term, National has to fix its fraying support. In 2011 ACT and United Future each kept a seat only because National persuaded enough of its voters to vote for them. Even then, the peculiarities of the St Lague system of apportioning list seats means only one of the two actually added a seat to National’s tally. Had neither of them been there, National would have had one more list seat. Peter Dunne’s embarrassments over his email blitz with Andrea Vance make him an unlikely candidate next year and even more unlikely to be indulged by 20 | | AUGUST/SEPTEMBER 2013

seats is vulnerable, not just because of weak membership and its split with Hone Harawira’s Mana party but because (as Labour and Mana point out) it is seen as positioned alongside National on mainstream socioeconomic issues. In 2011 Labour got four times as many party votes as National in Maori seats. If National is relying on its existing support parties in 2014, even repeating its 2011 vote of 47.3 per cent would miss a majority unless New Zealand First bombed out. National cannot expect 47 per cent when Labour is recovering and the Greens are still strong. Even 2008’s 45 per cent is a big ask. Moreover, the Maori party has voted against much of National’s policy thrust and the party’s various leaders have not made a convincing case of their wins for Maori. The value to National has been the transfer of some votes National cannot win itself. They are not soulmates.

That pushes National towards Colin Craig’s Conservatives and towards Winston Peters if he clears 5 per cent. Craig could be given a carefully chosen safe National seat where National voters could be persuaded to vote for him. He is a moral conservative and opposes asset sales. But he would be manageable if the Conservatives have, say, three seats. Helen Clark’s management of Dunne’s Christians in 2002-05 is a pointer. To get Peters, John Key would have to smooch away Peters’ deep resentment at Key’s denigration of him in 2008. And some concessions would be needed to Peters’ economic and demographic nationalism. The danger in such deals is that National could irritate its rank and file, as happened after 1996 when Jim Bolger shacked up with Peters. Demands to be “blue” not “gray” got Bolger sacked, then Peters. There might be fertile territory for agitators like far-right-winger Simon Lusk who wants an ACT-like National and has mentored some MPs. Put all that together. National’s conference had cause to celebrate an in-charge, policy-friendly, highpolling government. But behind the celebration tinsel there was a tinge of unease. M Colin James is New Zealand’s leading political commentator and NZ Management’s regular political columnist.



Surplus? What surplus? Photo:


The Institute of Economic Research’s June-quarter Consensus Forecasts, an average of NZ economic forecasts compiled from a survey of financial and economic agencies, had some spoiling stuff for anyone believing the Government will bring its operating balance back into surplus in 2014/15. The mean forecast was a thin surplus of just $395 million that year, but the most pessimistic forecaster expected the balance to be $1 billion in deficit, reducing to a $9 million deficit a year later. The forecasters weren’t then privy to the financial statements for the 11 months to 30 June. These showed a cheering improvement in the Government’s operating deficit before gains and losses, helped by healthy tax flows. Questioned in Parliament about the good news, Finance Minister Bill English predicted a deficit around $5.5bn for 2012/13, rather than the $7.5bn forecast in Budget 2012 in May last year, so long as the improvement continued along with the usual historical patterns of spending. And the figures confirmed the Government remained on track to return to surplus in 2014/15. This surplus, a target set some time ago, has become important for political reasons rather than economic ones. Prophesies of failure to hit it accordingly would be likely to hit a nerve in the Beehive. But a Finance Minister has a firmer grip on things than a forecaster. Policies can be tweaked to bring in more revenue, if need be. In December last year, for example, Bill English announced excise on petrol would increase by nine cents a litre by July 2015. Motorists felt the first bite last month, the first of three annual increases of 3c/litre each July until the total tax take reaches 59.5c/ litre

The field may soon be levelled. Inland Revenue and Customs have set up a joint working party to consider collecting the GST that now is exempt. Customs Minister Maurice Williamson told Parliament’s foreign affairs, defence and trade select committee the options include asking credit card companies to levy GST on overseas purchases made by consumers by adding the tax to those items when they appeared on customers’ credit card bills.

“$1 billion a year of GST-free goods changing hands online.” by mid – 2015. The Government said the money will contribute to roads of national significance. Labour reckoned the increases are needed only because the Government gave top income earners big tax cuts in 2010, and an extra $900 million is being recovered through petrol taxes. Another bit of tweaking could increase the flow of GST revenue, if need be (and without increasing the tax rate). In the first 11 months of 2012/13, $15.2 billion of GST was collected, $7 million higher than official forecasts. But internet shoppers are spared being taxed, if the goods they bring into the country are worth less than $400 (or less than $225 for clothing and accessories). This exemption has been an incentive to an internet shopping spree because the same goods in shops in this country will cost at least 15 per cent more, with GST heaped on top. The Retailers Association estimates about $1 billion a year of GST-free goods are changing hands online a year. It also complains about the unfair playing field for local retailers resulting from the tax exemption.

Retailers welcomed the prospect of the rules being changed to reduce, if not eradicate, their competitive disadvantage. Hamilton Shoe Clinic owner Andrew Sheath enthused: “Anything to protect our market is a step forward, is positive.” The Organisation for Economic Cooperation and Development (along with many others) has recommended we introduce a capital gains tax on property. It pointed out that income inequality in this country is exacerbated because much of the income at top levels was in the form of capital gains (the lack of such a tax also reinforces the bias toward “speculative housing investment and undermines housing affordability”). The Government hastened to reiterate this is not a goer. No matter (a) the strength of the political incentive to hit the Budget target and/ or (b) the Government’s sense of fair play, some things clearly are off limits. M Bob Edlin is a leading economic commentator and NZ Management’s regular economics columnist.


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Leadership’s lost art


e honest! It’s easy to look, Ozymandias-like, on the works of our leaders and despair. Poet Percy Bysshe Shelley’s imagery of the “decay of the colossal wrecks” today re-created in our financial world, environment and war zones everywhere, is prophetic. The “boundless and bare, lone and level sands stretching far away” that entombed his “king of kings” seem just a few generations off. The state of leadership here, there and everywhere is depressing. Leaders seem unable to cope with, or react imaginatively to life’s increasing complexities and horrific disparities. Rather than make cause and effect connections, they respond with simplistic rationalisations, like those espoused by Vector chairman and Institute of Directors’ (IoD) vice president Michael Stiassny who reportedly told a recent IoD conference that directors just need to toughen up. The nation’s corporate leadership is, he said, compromised by the combined effects of directors who’ve allowed a “culture of consensus” to infect the nation’s board rooms and, “excessive public sector regulation” that’s strangling profitability. He neglected to mention that New Zealand is still paying the $8 billion plus price of a deregulated finance industry and an even more expensive multi-billion dollar, deregulation-inspired leaky home disaster. The world is awash with superficial, command and control, selfserving leadership advice like this. London Business School and Oxford University’s Umair Hague, currently rated one of the world’s 50 most influential management thinkers, believes the world is suffering a “great dereliction – a historic failure of leadership, precisely when we need it most”. We are, he says, surrounded by people who are


“expert at winning – elections, deals, titles, bonuses, bailouts, profits.” These individuals are, we’re told, the “ones we should look up to – because it’s the spoils and loot that really matter”. According to Hague, author of The New Capitalist Manifesto and Betterness, which describes a new model for capitalism, “true leadership is a lost art”. Mere winners are not true leaders, he reasons. Gaming broken systems is a charade of living and, life is not a game. “It isn’t about what you have, and how much – but what you do and why,” he adds. Hague’s great dereliction is characterised by leaders who are incapable of fixing our broken institutions. These institutions are in turn creating, among other things, a “lost generation, a planetary meltdown, a never-ending series of financial crises and mass unemployment”. Today’s leaders “seem to be clueless”, he says. Hague thinks leaders are just “wannabes” now. “They want to be who leaders are, but can’t; they want the benefits of leadership, without the price; they want the respect, dignity and title of leadership, without leading people to lives that matter; they want the love leaders earn, act by painful act, without, in return, having the courage, humility and wisdom to love.” Imagine how language like that would go down in a kiwi boardroom. ‘Toughen up and don’t mention that four letter word in this boardroom.’ Traditional management, according to an increasing number of commentators, is undergoing a paradigm shift because it doesn’t work any more. Books such as Clayton Christensen’s The Innovator’s Dilemma show how market-leading companies have missed game-changing transformations in industry after industry – computers (mainframes to

PCs), telephony (landline to mobile) photography (film to digital) – not because of “bad” management but because they followed the dictates of “good” management. So, A management revolution is now emerging. Leadership needs a comparable paradigm shift. The establishment will, of course, rail against change just as it always does in any discipline when revolutionaries develop new conceptual frameworks. It happens in science and is happening in management. So it will be in leadership. Paradigm shifts aren’t easily delivered, no matter how overwhelmingly evident the need for change. Perhaps Hague and other thinkers, like Oxford University’s Colin Mayer, author of the recently published Firm Commitment, will hasten the tipping point of transformational change needed to create a new leadership paradigm. As in management where Forbes magazine contributor Steve Denning last year suggested the “anomalies in the existing paradigm are now so grotesque that it is only a matter of time before there is a shift to the new paradigm as a more productive way of getting things done in the world”, so a similar tectonic shift in leadership thinking might follow. But I’m not holding my breath. Changed leadership attitudes, practices and priorities will be hard won. The forces of leadership status quo will resist more viciously than most. There is much to loose for leaders so determinedly self and short term focused. As Hague says, the world “needs the old generation of leaders – failing and unable even to comprehend their own failure – to step aside”. M Reg Birchfield Life FNZIM is a writer on leadership, governance and management.



Protecting NZ’s integrity


ew Zealand has a strong first equal score on Transparency International’s global Corruption Suzanne Snively. Perception Index 2012 (TI CPI). This means that it is perceived as having the least corrupt public sector in the world. We score well too on the World Bank Governance Index and the Fiscal Transparency Index. To ensure that New Zealand stays as good as it is perceived, Transparency International New Zealand (TINZ) has undertaken an Integrity Plus National Integrity System assessment. The concept of a National Integrity System (NIS) is one that has been developed by the Berlin-based head office of Transparency International for use worldwide. It is used to assess countries’ institutional arrangements for integrity from the perspective of fighting corruption and fostering ethical behaviour, and goes well beyond an assessment of the public sector. Such research aims, amongst other things, to give insight into the institutional factors which influence perceptions leading to a country’s standing in the TI CPI and other measures of integrity. New Zealand has always had a high place on the TI CPI. The purpose of our 2013 “Integrity Plus” assessment, therefore, is to test these international perceptions, to use the tools developed by TI to assess our national integrity, but also to go further and include research into selected governance issues which are important to New Zealand’s national integrity as broadly defined. This should help to illuminate the reasons for the high standing of our institutions, civil and business sectors. More importantly, though, it also raises our self-awareness,

by identifying key weaknesses (including some that are not immediately apparent). Through this, TINZ will come up with an implementation plan for moving forward to better ways of preventing corruption and building stronger integrity systems. It is an assessment that goes beyond corruption to focus on good governance, a concept that embraces a great deal more than a lack of corruption. A National Integrity System is usually described by reference to a “temple” diagram first devised by one of the founders of TI , New Zealander and former Commonwealth Secretariat Chief Legal Officer, Jeremy Pope. If each individual pillar of the temple is strong and in balance with the other pillars, and if the whole rests on societal norms and ethics that support integrity, then the system is sound. The main ‘pillars’ of the National Integrity System being assessed are as listed below: Pillar 1: Legislature Pillar 2: Executive Pillar 3: Judiciary Pillar 4: Public Sector Pillar 5: Law Enforcement Pillar 6: Electoral Management Body Pillar 7: Ombudsman

Pillar 8: Supreme Audit Institutions (OAG) Pillar 9: Anti-Corruption Agency Pillar 10: Political Parties Pillar 11: Media Pillar 12: Civil Society Pillar 13: Business This year has seen intensive research being carried out by specialist NIS researchers who have interrogated relevant data and engaged with key sources to understand the resilience of New Zealand’s integrity systems. There are extensive review processes that have seen researchers challenged to support their findings and to ensure that their analysis is comprehensive. Most importantly, the Integrity Plus NIS is based around wide public consultation. It provides an opportunity for generating a national discussion from Cape Reinga to the Bluff about two of our country’s most important assets – its public sector and its integrity systems. Please join the conversation by visiting, www. or check into the Public Forum at the University of Auckland Business School, Wednesday, August 14, 6pm. M Suzanne Snively is executive chair, Transparency International NZ.


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Diversity pays dividends The number and quality of entries in this year’s Diversity Awards indicate that organisations are finally recognising that diversity builds better workplace cultures and productivity, says EEO Trust chief executive Bev Cassidy-Mackenzie


he Equal Employment Opportunities (EEO) Trust says the impressive number of constructive and forwardthinking entries in the ANZ and EEO Trust Diversity Awards 2013 shows that more workplaces are learning how important it is to understand and practice diversity. The Equal Employment Opportunities (EEO) Trust says the impressive number of constructive and forward-thinking entries in the ANZ and EEO Trust Diversity Awards 2013 shows that more workplaces are learning how important it is to understand and practice diversity. The Trust’s chief executive, Bev Cassidy-Mackenzie, describes the increasing knowledge and respect for work-place initiatives as “like a penny finally dropping”. “They realise that an engaged and happy team of employees


leads to a rise in productivity and loyalty. I’d like to congratulate everyone who entered and I must say as a judge it was not easy to find one clear winner in each category. The theme I noticed is that employees are not being judged or discriminated against because of their sexuality, ability or ethnic origin as much as they used to be.” She says what impressed the five judges about the Supreme Winner – the NZ Defence Force – was that the entire organisation supports its initiative. The Defence Force’s entry, which won both the Diversity Award and the Supreme Award, focused on ensuring employees with different sexualities and gender identities get plenty of support and understanding. “Education and assistance began with the Air Force and has now spread across the entire Defence Force including the


Navy, Army and civilian staff, as well as their families.” Cassidy-Mackenzie says the commitment and responsibility shown by the Defence Force for supporting different lifestyles across all the armed forces was outstanding. “I was really impressed as it is not just a local initiative. The Defence Force has also joined up with its international allied troops to make sure all sexualities are respected and supported anywhere in the world they are serving.” She says this huge positive leap for military culture is also being shared with other businesses which is wonderful to see as people with different sexualities work in every industry, sector and business. Entries came from organisations of all sizes – corporate to smaller locally owned companies. “They realise that looking after employees’ wellbeing, and making an effort to understand the cultural differences of staff, and customers is paramount to their overall success.” M

ANZ and EEO Trust Diversity Awards 2013 Winning workplaces There are five categories in the the ANZ & EEO Trust New Zealand Diversity Awards 2013, with a Supreme Winner chosen from the winners of each category. The categories are: Tomorrow’s Workforce Award, which recognises innovative responses to tomorrow’s employment challenges: The Diversity Award, for organisations that make the most of employee diversity. The Work & Life Award, which celebrates initiatives that create opportunities for greater engagement and productivity. The Skills Highway Award, which recognises workplaces that can show how they have helped improve their employees’ reading, maths and communication skills. The Walk the Talk Award, which celebrates effective diversity leaders. Supreme Winner NZ Defence Force – Different sexualities programme Tomorrow’s Workforce Award Winner Ministry of Social Development – WINZ cadet programme Highly Commended NZ Defence – Limited Service Volunteer Course Diversity Award Winner NZ Defence – Different sexualities programme

Work & Life Award Winner Coca-Cola Amatil – Wellbeing, driver safety & manual handling Skills Highway Award Winner Pacific Homecare – Targeting literacy programme Walk the Talk Award Winner Peter Potaka, Statistics NZ – Ethnic communities & the census

NZ Defence3 NATO meeting.




Military supports different sexualities An inclusive and pro-active approach to supporting different sexualities puts the New Zealand military at the global forefront of such initiatives. The New Zealand Defence Force is investing resources and time into ensuring employees with different sexualities and gender identities get plenty of support and understanding throughout the armed forces. The Defence Force has about 14,000 staff members including civilians across

to educate Defence Force leaders so they understand different sexualities. Additionally, OverWatch also supports service families that have children or parents who are GLBTIQ. Pearce says since last year it has grown into what is now a highly dynamic and respected entity within the Defence Force. “Examples

Winner of the Supreme and Diversity Awards - Defence Force NZ

the Navy, Army and Air Force and they are a diverse slice of society. It operates across the globe with about 400 personnel deployed in 12 operations, UN missions and exercises across 10 countries. Squadron Leader Stu Pearce, who is the chair of support group OverWatch, says the Defence Force understands the importance of providing guidance and support to each of its personnel to enable tthem to perform their key role at peak performance. “Initially started by a few Air Force personnel, the value of a support group for Gay, Lesbian, Bisexual, Transgender, Intersex, and Questioning (GLBTIQ) staff was quickly recognised by leaders as a key mechanism in supporting the wellbeing of its people.” GETTING OVERWATCH WORKING OverWatch was established to support the unique needs of the Defence Force’s GLBTIQ staff – both in uniform and civilian – and 26 | | AUGUST/SEPTEMBER 2013

of this include members of OverWatch taking part in Wellington’s Out in the Square, Auckland’s Big Gay Out and uniformed as well as civilian members marching in the Auckland Pride Parade. Participation in all of these events had the full support of the Chief of Defence.” He says these events challenge stereotypes and promote the Defence Force as an equitable employer. “They also sent a positive message to our personnel who may feel the need for visible role models.” Everyone working for the Defence Force learns about OverWatch through its various magazines and on the intranet’s main page. Pearce explains that OverWatch reports directly to the Director of Wellbeing and is able to advise the wider Wellbeing and Command framework of issues and opportunities within the Defence Force at any given time. ATTENTION FROM THE TOP Pearce says New Zealand’s Defence Force is

one of only a small handful of militaries in the world to formally establish such a support group within its framework. “OverWatch has provided an effective source of education to commanders and policy makers. It provides advice and assists in tackling negative or non-inclusive behaviour in a swift and effective way as well as helping foster a culture of positive bystander intervention amongst Defence Force personnel.” The support group is administered by a team of volunteers that has formed a management group made up of gay, lesbian and transgender representatives from across all services and within the civilian ranks. Pearce says in May this year representatives from OverWatch met with counterparts from other countries such as Norway, Sweden and the US in The Hague for the International Day against Homophobia and Transphobia conference. At that meeting OverWatch along with its international allies created the NATO+ Working Group. “The aims of the group are to promote fair and equitable treatment of GLBTIQ personnel in the military and share ‘best practice’. It was very successful and positive to witness other countries doing similar programmes.” Pearce explains that membership of this group means anyone in the Defence Force can access support resources from all of the other countries’ militaries who are also members. “This ensures comprehensive support on deployment or when working alongside a foreign military.” EMPLOYEE BENEFITS OverWatch is currently working on getting an internet presence off the ground to enhance its resources. “This is being funded by the Defence Force and is expected to be online by the end of the year.”



A ‘foot in the door’ for young job seekers Youth unemployment is a worldwide challenge with the potential to limit the prospects and future wellbeing of several generations, not to mention the ‘catch-22’ impact on national and global economies. One government department is taking a pro-active lead with great results. New Zealand’s largest government department is promoting its goal of helping people into paid employment by welcoming young cadets into the fold. The Ministry of Social Development (MSD) consists of more than 9000 professionals in 280 locations around the country. Work and Income is one of the Ministry’s service lines. Every New Zealander has contact with MSD at some stage in their lifetime and the service assists around one million people each year. Contact and service centres are the first port of call for people needing income support, assistance to work, getting a job or finding staff. Work and Income pays up to $7 billion in financial assistance each year, case managing over 310,000 people, and supporting 85,000 people into work. In addition, around 120,000 calls are taken at contact centres each week in up to 12 languages. The country’s welfare system is currently undergoing reforms, to try and create a benefit system that promotes independence and personal responsibility through the goal of supporting more New Zealanders into work. ENCOURAGING INDEPENDENCE In keeping with this approach, Work and Income offers cadetships to a select group of young people, aged 21 years or younger, through a programme established in 2004. The cadet programme offers unique opportunities, says Kate Wareham, director HR & capability development, Work and Income. “Most other modern apprenticeship programmes provide trainees with the skills required for a

specific trade or particular job. But Work and Income cadets serve a variety of roles as case managers and customer service representatives. As well as learning about our organisation, they also gain a high level of knowledge and understanding of the public sector, effective communication and engagement skills.” Work and Income managers were initially apprehensive that young people would not have sufficient life experience to accomplish frontline case worker roles and that they would require a greater level of management oversight. CADETS EXCEL However the cadets have instead brought fresh energy and enthusiasm to the organisation, says Wareham. Jessie Donald was 18 when she started as a cadet with Work and Income in New Plymouth, graduating in 2011. She has worked in several regional and national office roles and is now an investigator in the Ministry’s Fraud Investigation Unit. “I enjoy learning about different parts of the organisation and being able to apply my learning from the cadetship programme in these new roles. There are so many opportunities in this line of work now open to me,” explains Donald. Leanne Chipchase was one of the first cadets in Rotorua in 2004. She quickly progressed through various roles and now leads training for all Work and Income Contact Centres as national manager for contact centre training and quality. “I left school quite early (at 15) and didn’t really have any ideas of what kind of job I wanted to do. So when I saw the Work and

Income Cadetship advertised, I thought why not have a crack at it as I didn’t have too many other options at the time. Little did I know that accepting that opportunity would lead me to where I am now.” Last year, the cadetship programme was revised to make it easier for young people to apply and succeed. Other changes focused on retaining young trainees after their graduation. Qualification workshops were extended to all staff to provide ongoing professional development. The opportunity for growth and progression has seen many cadets appointed into new roles at regional and national level.

Jessica Cooksley-Gruys who has gone through the cadet programme.




A drive for employee wellbeing Keeping its drivers safe on the roads and employees tasked with heavy lifting free from injuries and back pain, has become a major focus for Coca-Cola Amatil NZ. Programmes to effect positive changes have delivered great success. Coca-Cola Amatil NZ (CCANZ) employs over 1000 people throughout the country and is part of the Coca-Cola Amatil Group – one of the largest bottlers of non alcoholic ready-to-drink beverages in the Asia-Pacific region. In New Zealand it is primarily a sales and marketing business with two plants in Auckland, one in Putaruru and two in Christchurch. Employees carry out a wide range of activities from driving company vehicles and selling, to stacking supermarkets with its product. They come from different cultures, have different qualifications and cross a wide age spectrum. ZERO HARM CULTURE The company’s national health and safety manager, Sue Lahood says CCANZ has a Zero Harm team that champions its health and safety culture. “We focus on ThinkSafe + WorkSafe = HomeSafe. Having a team so widely dispersed across the country makes seamless, cohesive communication and activation of nationwide projects difficult but the small dedicated team of three make it work,” says Lahood. Last year to ensure safety and wellbeing was paramount a preventative measure was introduced to ensure that every employee got home safely at the end of every day. “We gathered feedback and identified three key areas to help staff actively engage with the Zero Harm brand and travel home safely,”: 1. Wellbeing 2. Driver Safety 3. Manual Handling EMPLOYEE WELLBEING CCANZ’s goal was to enhance the wellbeing of everyone who worked there and it used


a number of techniques to work towards this. Each staff member was taken through a seminar, ‘Flip the Switch’, which used an on-line diagnostic tool to evaluate employee’s lifestyle and pinpoint areas they needed to work on. Lisa Te Huia of CCANZ’s business support group explained, “The sessions helped me to realise I could make a greater impact on my physiology by changing little habits – making sure I look for ways to do ‘incidental exercise’ like parking my car further away.” Lahood says this led to health checks. In larger centres a registered nurse was based on-site and in smaller ones employees were given a voucher to visit their doctor. A nutritional seminar was also trialled and everyone has access to a gym subsidy. DRIVER SAFETY CAMPAIGN CCANZ looked at its driver safety record for those who use work cars and fleet trucks and improvements were needed. “A campaign was created and we also signed up to the E-Drive online driver safety training course.” She explains the course was developed by the University of Waikato and uses state of the art technology to put drivers through real life driving scenarios. The course was compulsory for everyone who drives a trade vehicle and was made available to everyone else and their families. The rate of driving accidents has dropped hugely as in 2011 there were about 41 accidents per 100 vehicles and last year that dropped to just over 26. That’s a 34 percent drop in crashes. The annual cost of repairing each vehicle in 2011 was more than $2000 and that amount decreased by 38 percent in 2012.

Work & Life winner - Coca-Cola Amatil Auckland reps Phillip and Catherine Parlane.

Catherine Parlane, a territory sales manager describes her experience: “The E-Drive course was a fun way to ensure that we are all aware of our surroundings while we are on the road. It is great the company that we work for is continually looking at new and innovative ways to ensure we are safe while at work.” REDUCING WORK RELATED INJURIES The company’s health and safety team was seeing an increasing number of injuries especially from employees who did the lifting and moving of stock such as crates and boxes of soft drinks. Employees also refurbish fridges and move or install new coolers – some of which weigh over 250kg. Lahood says this led to a manual handling programme being launched last year. “A fitness video was prepared by an All Blacks trainer who got footage from our workplaces and then showed employees how to correctly manoeuvre boxes and limit the stress on their bodies.” This led to a drop in work place injuries from well over 60 to fewer than 24 in the last year. She adds that an engagement survey showed that staff value CCANZ’s commitment to wellbeing along with health and safety. “The leaders and managers are committed to doing their part by committing to projects and taking an active role in the campaigns. Leading the safety culture from the top has been central to it working as it’s not just about ticking the boxes.”



Literacy lifts home-care performance A health care provider delivering home-based services to south Auckland’s Pasifika community has improved performance through its focus on literacy. Pacific Homecare is a charitable trust providing home-based health care services primarily to the Pasifika elderly and disabled community throughout south Auckland. Home care services include help with personal care, meal preparation, housework and social services. The Trust was established in 1989 by “three Cook Island Mamas” to care for elderly people in Otara. Today, it employs 240 staff to deliver 5300 hours of service each week to 550 clients.

the vision and values of the Trust, as well as building consistency and the capability to deliver a high standard of service. In 2011, Crooks says the Trust prioritised lifting the literacy and numeracy levels of staff to ensure ongoing staff development.

TARGETING LITERACY A literacy and numeracy training programme was set up and divided into three separate initiatives targeting the different needs of staff. Pacific Pathways was aimed at support workers. It focused on building confidence, understanding client care requirements and increasing literacy to help complete paperwork. It was initially delivered to 55 support workers last year and another 50 are looking to complete the 10 half-day workshops this year. Every Day Leaders was more L to R, Marie Konelio (service coordinator), Saumolia Hopotoa (client), Talofa Hopotoa (client’s daughter); at rear, advanced and tailored towards Jacinta Pelenato (field coordinator). co-ordinators. It focused on more effective management of PLANNING FOR THE FUTURE support workers, improving time management, South Auckland’s population is 37 percent resolving conflict, and writing business reports. of Pacific Island descent. A 172 percent The 10 half-day workshops were delivered increase in Pasifika residents over 65-yearsto eight staff members in 2011, with a old is forecast over the next 15 years and a refresher course held last year. 244 percent increase in the 85+ age group. Driving Excellence was the third tier of the Pacific Homecare’s chief executive programme aimed at administration staff. It Hamish Crooks says the Trust recognised helped to improve accuracy of communication, that its ability to deliver quality services and understand the impact of errors in payroll, expand depended on the capabilities of its ensure timeliness and improve customer staff. service skills. For 92 percent of Pacific Homecare staff, This course, in 10 half-day workshops, was English is spoken as a second language. This delivered to five administration staff last year. presented a challenge in communicating Crooks explains that the initiatives were

designed to lift literacy across the board. They also ensured staff had sufficient foundation skills to obtain industry qualifications, which were becoming essential to work within the heath care sector. INITIAL OBSTACLES A number of challenges had to be met: • Finding a suitable provider. • Covering clients’ needs while staff were training. • Engaging low-paid casual staff to attend. • Catering to different abilities and expectations. • Applying the learning at work. • Covering the cost of training. To address these, Pacific Homecare enlisted The Learning Wave to deliver literacy initiatives and made course attendance compulsory. The Trust secured funding from government agencies in 2012 and this year for the Pacific Pathways course and Everyday Leaders refresher, and planned ahead to cover the additional training costs of $56,000. RESULTS In both intakes, participants have improved in each of the three courses. In the workplace, Crooks says there has been: • An increase in the verbal reporting of client changes; • Improved observation skills; • Improved written reports; • Better staff self-motivation and eagerness to continue training; • Better self-esteem and interaction with other staff; • Increased client satisfaction; • More qualifications for staff. Crooks says Pacific Homecare was aiming to have 75 percent of its staff reach a minimum of Level 2 NZQA by this month (September).




On a mission – making every Kiwi count Policy makers rely on good data to make the best decisions. This year’s national census data could be radically better than before, thanks to one man’s ability to search out and engage with previously unaccounted for ethnic communities. Peter Potaka has represented Statistics NZ for the past five years, initially as a senior advisor of Maori Policy then, this year, as manager of the Census Community Liaison Team. With help from his wide network of contacts, Peter achieved the unthinkable by tapping into large ethnic communities that had previously remained hidden and unaccounted for by census data. This data, collected every five years, is invaluable for helping government departments allocate spending, and is also used by councils, community groups, iwi, and businesses to plan for the future. Reaching hidden communities Gareth Meech, manager census, says Statistics NZ’s job is to tell the story of New Zealand’s diversity through a national census. But the results fall short when a

proportion of the people who need to be counted are traditionally unwilling to respond. Fortunately, Peter Potaka emerged to walk the talk for cultural diversity, says Gareth. It is estimated that Potaka and his team reached more than one million previously unaccounted for people through its work with Maori, Pacific and ethnic audiences. “Peter committed himself to ensuring that everyone ‘counts’ in New Zealand, especially those from culturally diverse backgrounds,” says Meech. STRATEGY He achieved this goal by devising a better strategy to reach statistical ‘under-counts’. His approach centred on recruiting the right people from a range of ethnic backgrounds – 22 in total – who could influence their communities. He also placed advisers in strategic locations that had been untapped by Statistics NZ. Potaka ensured his team knew exactly what they needed to get done, adds Meech. Feedback from the team endorses this: “Peter always has his eye on the big picture and created different strategies for ethnically diverse populations – Maori, Pacific, Ethnic, Asian, Indian and others. He knew instinctively that a one-size-fits-all approach would not be effective.” And, “Peter consistently demonstrates a clear understanding of cultural diversity and team dynamics and always provided managerial support when needed.” MOTIVATING OTHERS In addition, he is described as a humble leader by his staff and colleagues, elaborates Meech. He lives by the Maori proverb: ‘Ehara taku toa he toa takitahi, he toa takitini ke.’ ‘My success is not through my effort alone, but derived from the success of my team.’

30 |

Peter Potaka – Statistics NZ.

Many of his leadership qualities are based around the same principles he has used to manage the Maori All Blacks for the past 12 years. From one employee: “Peter created an environment where his staff could achieve for themselves individually and as a team. He always acknowledged and rewarded success. He developed a reporting system which allowed the team to see how their individual work was contributing to the overall team effort which kept us inspired and motivated to achieve.” LASTING IMPACT The cumulative impact of Potaka’s work is a compelling and positive example of what can be achieved with the right leader, explains Meech. “He is meticulous in everything he does. Census and gathering of statistics through surveys can be a hot topic. But he identified likely risks and took steps to mitigate those. He was able to digest complex issues as they arose and put in place clear and decisive remedies.” And by creating positive inroads into communities that were previously closed to Statistics NZ, he sent a message to these diverse groups that “they count, they have a voice and they matter to Statistics NZ and the government as a whole,” says Meech. Potaka also came up with some unique contracts with large groups to reach Asian and other ethnic communities – a model that other government agencies are now looking to adopt. Finally, his work will have a positive effect on future census collections through the strategy he has established and a legacy of positive relationships with ethnic groups throughout the country, concludes Meech.

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Gender diversity at the top table By Jacqueline Ireland – CEO, Colmar Brunton As the recent hue and cry over the socalled ‘man ban’ points up, efforts to try and co-opt more women into parliament, onto corporate boards, and into better pay bands continue to get a tediously repetitive reaction. “Reverse sexism!” bellow some. “Should be a meritocracy!” shout others. “If women didn’t leave the workforce to have children they’d be paid the same!” bray still more. It may well be that the ‘man ban’ was too much of a blunt instrument for many people’s liking. Nevertheless, it was but one option for tackling a pretty genuine problem: a lack of proportionate female representation in parliament. In fact, the percentage of women in parliament – 32 percent – has seen no change in eight years. The minority of women represented in the nation’s governance institution is reflected in our corporate sector. Colmar Brunton, on behalf of Women on Boards, recently surveyed 976 New Zealanders about women’s educational experiences and how that has been parlayed into subsequent workplace opportunities – weighted for

gender, region and age. What we confirmed was that, indeed, women’s educational achievements are growing apace, but that none of those fine statistics were seemingly being transposed into the world of work. And this is a problem, especially when ideas around diversity at the board level in business are no longer considered the domain of hard-core feminists or kooks, but best business practice. I mean, could we ever accuse Andrew Barclay, the CEO of Goldman Sachs, of being a radical? And yet, this is what he has to say about it: “To only draw ideas and experience from half our available talent pool makes us significantly less competitive. The composition of boards needs to reflect the stakeholders and communities they aim to serve and greater representation of women is critical to achieving this.” On the positive side of the ledger, more and more women are being better educated; better trained for the workplace than ever before. Slightly over half of bachelor’s graduates were women in 2006, and our data suggests that in the younger generation women are pulling ahead even more. A 2008 report by the OECD – Higher Education to

“The course had an instant impact on my life. It highlighted the importance of planning your week based on your core values.” - Mark Tuifao, SkyCity Auckland

2030 – predicted that three times more women than men will graduate from New Zealand tertiary institutions by 2025, making up 76 percent of graduates, even while only accounting for 60 percent of students. A staggering 71 percent of women in their 30s have a tertiary degree. On the flip-side, the pay gap is definitely widening: it is the biggest now it has been for a full decade. Most worryingly for those who want to change the status quo is that in the under 30s age bracket, where attitudes to equality are ostensibly the most liberal; almost 3 in 10 young men are in a senior executive role, as opposed to 1 in 10 young women. To take NZX companies as but one metric: only 14.75 percent of directors serving these companies are women; a figure that has slightly more than doubled since 2006, but still seems pretty anaemic. But are women themselves actually focused on getting there? Our research would suggest that a reasonably healthy number of women – some 17 percent – are either actively wanting to serve on a board or open to the idea, even though only half that number actually get to. The barriers for many – lack of time, lack


of interest in the position or the pressures brought by the position, and lack of skill – are very real, and are pretty much the same across genders. However the drivers to aspire to board membership differ between men and women. Young men see governance as a career boost, as valuable impetus in their rise to the top of a company. Young women feel this way too, but for them it is less about power and money and more about a deeper purpose: contributing, making a difference and giving back are reasons often cited (although how many of these are conditioned female responses given to disguise the traditionally ‘less feminine’ trait of ambition, we don’t know). Whatever the case, it does seem as though women view success differently and their families and home commitments (and duties, which they still are overwhelmingly responsible for) are as important for them as anything done in the workplace. Almost 70 percent of women say they will be more loyal and committed to organisations that provide flexible work arrangements to accommodate families and childcare. And it is here we get to a solution, of sorts,

for ensuring women get into the workforce in more force, and get themselves mentored and driven up the career ladder. And there’s not a ‘man ban’ in sight. The answer is that women, as a significant and under-utilised leadership talent pool, require a few targeted approaches to ensure they turn all that great training and those 21st century leadership qualities like empathy, collaboration and relationship building, into careers that lead to the very top table of an organisation. And here are the ones we believe, based on our research, to be those that will yield the best approach: • forget 9-5; opt for a more results-focused approach, no matter where the work is done; • develop a culture that genuinely embraces diversity and supports career flexibility; • establish a mentoring programme for all male and female young talent ; • accommodate a non-linear career path; take a long term view of an employee’s contribution and especially for mums coming off maternity leave, support their return to work. The short answer is that women often see a path for themselves to the top within

Jacqueline Ireland.

companies that have supported the paths of other women. It is important for companies to encourage existing board members to serve as role models and sponsors for up and coming leaders of all sorts, particularly women. Only once women have more influence at the board table, in senior management, and in parliament will our parlous state of pay disparity start to evaporate.

“It’s challenged me academically and intellectually but also in terms of who I am, where I fit into the world and what my future is.” - Liz Lindsay, Tourism Holdings Limited




It’s personal: Building business ties in Asia

What can New Zealand companies learn from others who have already made their mark in the diverse and growing markets of Asia? Ruth Le Pla joined a trade mission to Jakarta to find out.


huan Seng Lee laughingly refers to himself as the “undercover Kiwi” because most Singaporeans see him as one of their own. Born in Malaysia, educated in New Zealand and based in Singapore for much of his working life, he’s the emeritus chair of the giant Beca engineering consultancy and for the past six years head of NZTE’s Southeast Asia Beachheads Advisory Board. As a young man studying in New Zealand he came to know and love the country and, as he likes to tell people, “became a good Kiwi”. Love and marriage have kept him in Asia for most of his career, he says.


New Zealand has benefited big-time from his sense of Kiwi connection. New Zealand, like never before, needs more undercover Kiwis. Link-by-link, person-by-person, it is individuals who build relationships, cement business links and hold very different types of organisations together across cultural borders. As New Zealand’s economy continues to mesh more closely with those of the Asian region, how well are we integrating at a personal level? And what can business leaders do to help build ties that bind across companies, countries and cultures? At a briefing in Ambassador David Taylor’s Jakarta residence earlier this year,

the 52 members of a New Zealand business mission are schooled on the art of doing business Indonesia-style. One simple tip: don’t dive straight in to business talk. Get to know the other person first, ask about their family, lives and interests. The same ‘make-it-personal’ advice is also a standard mantra for anyone eyeing China and India. (Years after it was released, many Kiwis still bristle at an NZTE report saying Indians would like Kiwis to lighten up, tell a few more jokes and be a bit more like the Aussies.) Yet, like many simple tips, over the next 11 days the idea of focusing more


on social niceties proves surprisingly hard to do. As the group shifts from Jakarta, to Bandung, Surabaya and finally Bali many mission members struggle to devote precious time to small talk before getting down to big business. Ingrained whambam, cut-to-the-chase Kiwiness cuts in. In some ways, building long-term cross-cultural relationships may have been easier in the past. Many New Zealanders now on the cusp of retirement still maintain the easy friendships forged in their youth with people who came to New Zealand under the Colombo Plan established in 1950. Those overseas students have since

fanned back out across the world: many into positions of influence and authority, with a fondness for New Zealand and a willingness to help out if they can. In New Zealand, at a recent workshop on NZ Inc’s ASEAN strategy, NZ High Commissioner to Malaysia David Pine called for New Zealand to make more “people-to-people links that are new, fresh and relevant today”. Our education sector has the potential to provide the fire in which such long-term business links can be forged. If so, in high-potential countries such as Indonesia we have a lot of work ahead. Last year around 80,000 Indonesians

chose to study outside of their own country: most of them at tertiary level. Just 562 of them picked New Zealand. New Zealand Education is now working hard in Indonesia to raise awareness of our country’s ability to train and educate its growing population. Throughout the wider South East Asian region the organisation is also facing an increasing drive for educational institutions to set up shop in-market. As one person said, “We don’t have to cross the ocean to get an international education. We just have to cross the street.” Izak Human, New Zealand Education’s regional director for South East Asia, says

DiverseNZ launch

Copyright ©Michael Bradley Photography 2013

A group of 40 public and private sector funders has joined forces on a two-year project to identify and create tools to lift ethnic and gender diversity in New Zealand organisations. DiverseNZ Inc says it aims to galvanise businesses to harness the economic benefit and GDP uplift that results from diverse leadership. It will focus on companies employing more than 50 people. Speaking at the Auckland launch of the group, Dame Jenny Shipley said New Zealand is not only changing internally but the people we do business with globally are also changing. “We’re not just shoaling with the same old fish that have made us wealthy and middle class from the past 100 years. The new world with which we are doing business, and the emerging middle classes, are also much more diverse.” DiverseNZ Inc is looking for practical solutions to help organisations embrace diversity, build leadership capability, develop talent and address issues of unconscious bias. Dame Jenny acknowledged that there are already many existing organisations dedicated to ethnic and gender diversity in New Zealand. “We don’t want to compete, we want to all align.” The group includes government departments the Ministry of Foreign Affairs and Trade, NZTE and Treasury. Among its private sector partners are Air New Zealand, ASB, EY (formerly Ernst & Young), Freightways, Fulton Hogan, IAG, KPMG and Vodafone. For more information see “DiverseNZ goes for bottom-line benefits” in Executive Update



Diversity benefits for business The New Zealand Institute of Management (NZIM) and the Office of Ethnic Affairs (OEA) are about to launch a series of in-company ethnic diversity programmes after running a pilot programme earlier this year. Among other aims, the programmes will help business leaders see how they can recruit and celebrate people from many different ethnic backgrounds, and through them link to their wider communities and networks. Tait Grindley, NZIM’s GM, capability development for the Auckland and Wellington regions, says there is a groundswell of interest among New Zealand business leaders in the benefits of ethnic diversity but it remains a challenging area for many organisations. Many business leaders, he says, struggle to focus on the long-term benefits to their organisation of greater ethnic diversity. Instead, he suggests they look for bitesized “low-hanging fruit” by examining their recruitment policies, communicating the benefits of diversity to current employees and running performance development programmes. Grindley, who also represents NZIM on the working group of the newly-formed DiverseNZ Inc, says companies can also appoint in-house “champions of change” and help individuals celebrate their backgrounds and community links. By 2021 a quarter of New Zealand’s workforce is expected to have been born overseas. For more information on the NZIM/OEA programmes email


Boarding plane in Bandung, Indonesia.

we don’t have a whole lot of runs on the board so far. “We have Victoria University of Wellington in Ho Chi Minh City and the Academic Colleges Group in both Ho Chi Minh City and Jakarta. Those programmes are doing well. But other than that, there’s not much to point at.” SPRINGBOARDING In Beca’s case, decades of experience in the region have gone into learning what works and what doesn’t. In Indonesia, for example, Beca has been weathering the ups and downs of political and economic change for the past 40 years, once famously settling a long outstanding debt on one of its Surabaya contracts with a transaction that included two residential plots of land and three resident goats. When it comes to talent management, Chuan Seng Lee attributes much of his company’s success to a longstanding philosophy, originally championed by former CEO Sir Ron Carter, to “localise” as fast as possible. In practice, that means employing local people who can bring both their

talents and their connections to the company. “If I employ a Singaporean, Chinese, Malaysian or Indonesian person they immediately come with networks and relationships,” explains Lee. “There’s no way we can replicate that by just sending Kiwis to the market.” Moreover, by thinking three or more years ahead, Beca can ensure it’s got the best balance of talent for each new market, strengthening its ability to springboard from one country to another. In multi-ethnic countries such as Singapore, for example, it can recruit people from Vietnam, Myanmar, Indonesia, the Philippines and Thailand. “Grow these people. Train them. Encourage them to maintain their ties and relationships in their home countries,” says Lee. “When you are ready to expand your business into these markets these are the people who will be leading the charge for you.” Paul White is Beca Group’s MD – Asia. From the firm’s hub in Singapore he heads up a team of 550 people spread across the region. White talks about both “localising” and


“Beca-ising” people, and concedes it can sound “a bit corny maybe”. Corny or not, he says the twin concepts have certainly proved their worth to Beca’s business in Singapore. “They’re behind our success in Indonesia and are a work in progress in China too.” At a “crude functional level”, White says, Beca-ising is about deliberately immersing newcomers in the organisation’s corporate systems: its IT platforms, HR systems, and legal and quality frameworks. There’s also the ongoing sharing of Beca’s in-house best-practice techniques for project work: a never-ending crisscrossing of ideas and experience throughout the organisation. Staff may be flown in from overseas as necessary to share and transfer their specific technical skills, empower nationals and develop their expertise. “The scale and type of jobs changes constantly,” says White. “Some projects are very technically demanding so whether it’s a new brewery, a new Nestle project or a 111-storey building we’re always looking for the best resource for each job.” “Beca-ising” is also about letting employees from all backgrounds and nationalities understand that they too can aspire to maybe one day become owners of the business. “Being an employee-owned business is a big differentiator for us,” says White. “It’s a powerful tool for us in bringing through and holding on to talent.” In a country where long-term relationships matter, Beca cemented its reputation during the 1997-98 Asian financial crisis by retaining a slim-line version of its former presence in Indonesia while others pulled out entirely.

Widodo Suryadi, David Bell & Chris Boadle.

Paul White [centre] showing members of a NZ trade mission to Indonesia round Beca’s Plaza Indonesia project in central Jakarta.

The symbolism was not lost on Indonesians and, to this day, underscores Beca’s warm reception in the market. White was stationed in Jakarta at the time and had the difficult job of winding down some project teams. Even then, though, Beca took the opportunity to relocate several talented Indonesian staff and client’s staff from Indonesia to its offices in Australasia. “Friendships and relationships continue today from those activities back in times of adversity,” says White. He acknowledges there’s sometimes a fine line between accommodating local and overseas behaviours. Issues around time management are a good example. Many Beca staff travel enormous distances every day through Indonesia’s infamous heavy traffic: spending an hour

and a half to get to work in the morning would not be unusual. “So we allow some flexibility on start times,” says White. “In the recent floods in Jakarta, for example, just five percent of staff managed to get in to work. The place was gridlocked.” Still, he says, once at work some business practices are “practical and sensible”. “I’m a stickler for time so I typically start meetings within five minutes of the hour. Slowly people work me out and turn up on time.” Suryo Bambang Sulisto is chair of Indonesia’s Indonesian Chamber of Commerce and Industry Kadin. He urges overseas companies to build a sound understanding of the underlying culture’s influence on hiring, training and managing staff. AUGUST/SEPTEMBER 2013 | 39


“In Indonesia this can sometimes be a very sensitive issue,” he says. Flashpoints can occur when firing someone, and when handling sudden requests for leave for family or religious rituals. “If you look at it from a straight business perspective, you say no, they have to work. But see if these people can give you advance notice so you can get someone to cover for them. It’s a matter of getting them to let you know in advance not to suddenly want to take time off.” He advises overseas managers to balance firmness with flexibility. “Demonstrate some understanding otherwise it could be said that you are against their religion... it could be played that way which is not very nice.” He cautions overseas companies new to Indonesia’s traditional practices to get local advice. “If you don’t have an Indonesian business partner then at least consult a local person who works with you. It’s really crucial.” MIX & MATCH Curiously, there’s an aspect of diversity initiatives that necessitates more homogeneity rather than less. Christchurch, says the ASB’s David Bell, provides a “cracking” example of this. “Cantabrians like their own people. Try to fly in Aucklanders and they don’t gel.” ASB has seen its own business rise after matching its offerings to the demands 40 | | AUGUST/SEPTEMBER 2013

of different ethnic groups of customers. Bell, who is ASB’s GM, global transaction banking, says a Mandarin-speaking staff member “has been run off his feet” since joining the bank’s trade finance team. “And customers have become distinctly more engaged.” Bell says the bank tries to match the ethnicity of its staff at its branches with the dominant ethnicity of people in the surrounding area. So Auckland’s Mt Roskill branch, for example, has more Indian staff. Headed by CEO Barbara Chapman, a longstanding and vocal champion of diversity in business, ASB has recently joined a group of public and private sector organisations in DiverseNZ Inc, a new body focusing on ethnic and gender diversity in Kiwi businesses. See box story page 41.) LOCAL TALENT ESSENTIAL Over at ASB parent company Commonwealth Bank, regional head of trade & payments Asia Chris Boadle sees local talent as essential to the bank. Based in Singapore and a frequent visitor to Indonesia, Boadle says ethnic diversity is extremely important as the bank builds its business across Asia. “There may have been a tendency to parachute in Aussies or New Zealanders in the past – – and at a senior level that makes sense, especially if you are looking to ensure the culture of the bank is continued – – but from a commercial perspective it’s

logical to look for local talent.” Meanwhile in Jakarta, Widodo Suryadi, executive vice president and head of wholesale banking for PT Bank Commonwealth Bank Indonesia, notes every single one of his bank’s 91 in-country branch managers is Indonesian. Spread across 27 cities right across Indonesia, the branches are mainly staffed by people from each local area. That’s especially important in a country where differences in language, dialect, cultural practices, savings patterns, adversity to risk and levels of comfort discussing finances can vary considerably. “Especially in the up-country branches, we hire local people because they know the market well,” says Suryadi. Commonwealth Bank of Australia employs a handful of expats from Australia in key senior positions in Indonesia. Even so, as Suryadi points out, as the world becomes more interconnected, some notions of nationality can become very blurred. “Our country manager was born in Portugal,” he says. “Then he grew up in Canada, spent his early years of employment in Latin America, has been in Indonesia for 18 years and has an Indonesian wife.” M Ruth Le Pla accompanied a recent New Zealand trade mission to Indonesia with funding from the Asia New Zealand Foundation. The mission was organised by Export NZ, the EMA and the ASEAN NZ Business Council.

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New Zealand’s best shot at a web giant In the second in a series looking at the business case for Mega as a NZ-based technology company, technology writer Bill Bennett talks to two of the key players in the Dotcom saga, chief technology officers Mathias Ortmann and Bram van der Kolk.


side from being instantly recognisable brands Apple, Google and Microsoft have something else in common: they are all based on America’s west coast. Oddly, for an industry that thrives on disruption and original thinking, hardly anyone dares attempt setting up a global digital empire anywhere outside a strip running from Silicon Valley to Seattle. Anyone except Kim Dotcom that is. Dotcom is setting up a global internet business based in New Zealand. It isn’t as if Dotcom has any choice. Since the raid that seized Megaupload assets and landed the company’s senior staff in jail, Dotcom and his team have not been able to leave the country. Which explains why Dotcom’s chief technology 42 | | AUGUST/SEPTEMBER 2013

officers Mathias Ortmann and Bram van der Kolk work on a new business from a suburban Orakei mansion. Dotcom’s new company, Mega, is six months old. It already has 3.5 million users around the world. Customers use Mega to store and share documents on remote servers – an arrangement better known as cloud computing. NOT YOUR USUAL CLOUD In a world awash with cloud storage products, Mega’s point of difference is encryption. Files sent to Mega’s servers are coded so that only people with an encryption key can read them. In other words, no one knows the content of stored files except the owners and people deliberately given access by the owners. Even spooks

have difficulty cracking encrypted data. Until now encryption has been strictly for geeks and organisations depending on security and privacy. That was before news leaked that governments around the world routinely snoop on internet activity. Suddenly everyone is interested in the idea. Particularly companies that need to protect intellectual property. It turns out that one highly publicised application of the US government snooping was to learn about Airbus Industries’ negotiating strategies and pass that information to Boeing. Encryption doesn’t necessarily stop that kind of activity, but it does make it extremely hard. Mega’s encryption overcomes the biggest drawback with cloud computing: security. It makes it safer to store private


Bram van der Kolk and Mathias Ortmann: Two of the online world’s smartest players who chose to bring their business here.

or sensitive material. It means authorities can’t see what people get up to with their online storage. Just as important from Mega’s point of view, it means Mega can’t read people’s data. It can’t know whether people are storing text documents, personal photographs, engineering blueprints or downloaded movies. This goes some way towards absolving the company from legal risk and the piracy accusations that saw the earlier business closed down. Van der Kolk says Mega has a second advantage over its rivals: uploading and downloading is significantly faster than rival cloud storage services. That’s a direct result of its history. A third plank of Mega’s strategy is to make its service open in the sense that other developers can use it as a back-end storage for their applications. The company recently released software making this easier. Ironically, by closing Megaupload the US authorities allowed Mega to start with a clean slate using 2013 knowledge and technologies along with knowledge accumulated when running the earlier business. Most rival cloud operations are stuck with technologies dating back six or more years. Ortmann says this means

his rivals are metaphorically attempting to convert a 1920s biplane into a modern passenger jet while the aircraft is in flight. Ortmann says it wouldn’t have been possible to update Megaupload to Mega standards: “So when we began Mega we could finally put all the good ideas we saw after starting Megaupload, but couldn’t implement, into a new product.” TECHNICAL BARRIERS New Zealand’s openly hostile government isn’t Mega’s only barrier to building a

now has a New Zealand storage node that accounts for about 10 percent of total storage capacity – it mainly looks after data from customers in New Zealand, Australia, Pacific Islands and the west coast of the United States. Officially there’s not much spare bandwidth to play with, but Mega solved this with imaginative thinking. Ortmann says New Zealand uses the existing submarine cable in an asymmetric fashion, far more data comes down the pipe than travels back up. Ortmann says Mega

It means Mega can’t read people’s data. global online business here; there’s also the matter of limited infrastructure in a country a long way from the centres of computing power. For now, New Zealand effectively only has one submarine cable network linking it to the world. Ortmann says Mega located its initial server cluster in Frankfurt. The company

is using untapped capacity in the outbound direction. The bandwidth is paid for – carriers have to buy paired capacity from the cable network – but because it is unused Mega can buy it cheaply. He says if Mega had to pay regular commercial bandwidth prices, the business “simply would not be commercially AUGUST/SEPTEMBER 2013 | 43


viable”. He says New Zealand bandwidth costs are 20 to 50 times higher than the price Europeans or Americans pay. Controlling costs is vital. At the time of writing Mega has 3.5 million customers after just six months which must be a record for a New Zealand-based company still in its first year of operation. Van der Kolk says the speed to market was another by-product of the raid that took down the original business. When the company restarted, they were not distracted by dealing with an existing business; all their energies could be poured into Mega. While it didn’t take long to find customers, finding profitable ones is another matter. Few customers pay for storage at this stage – that business is expected to come later along with applications and services extending Mega’s scope into areas such as legitimate music distribution. Three and a half million users means a lot of bandwidth. Ortmann says the service peaks at over 100Gbps (gigabits per second). To put this in perspective, he says the whole of New Zealand currently uses about 100Gbps of international traffic. He says: “Traffic is growing fast so we may soon exceed New Zealand’s total traffic utilisation.” He says this shows if Mega located its main server cluster in New Zealand it would run up against bottlenecks. All this explains why Mega has talked to people behind the Pacific Fibre project about reviving plans for an additional submarine cable. Despite these problems, Ortmann and van der Kolk are keen to base the core of the business in New Zealand. That means development and it means creating jobs. Ortmann says he is about to start hiring and is looking predominately to New Zealand for talent. He says the level of education in the country means it’ll be possible to hire very capable software engineers. He also plans to recruit global talent saying New Zealand is an attractive place, which will help. Strangely given their history, the pair see New Zealand as being business-friendly. 44 | | AUGUST/SEPTEMBER 2013

REBOOT In July Mega introduced an Android app so smartphone users can browse, download or upload files while on the move. An iOS version for iPhones and iPads along with a synchronisation client for Microsoft Windows are in the pipeline. There aren’t many business precedents for Mega to follow. As Ortmann says: “The earlier business was levelled. We were wiped out.” Yet being able to reboot gives the new business significant competitive advantages. Even so, coming back from that event requires a certain doggedness and the kind of entrepreneurial spirit New Zealand needs. Our politicos, academics, economists and trade ambassadors have long

In an online poll on run following Management’s first article on Mega, Mega trouble or mega opportunity, in the April 2013 issue, business readers were asked: Should NZ embrace the Mega team and leverage the opportunity they potentially offer or should we encourage them to take their business elsewhere? Respondents voted 161 to 7 in favour of embracing the Mega team.

exhorted New Zealand businesses and entrepreneurs to develop clean, ‘knowledge economy’ products and services that can scale without huge resource issues. Potentially – despite its treatment by government – Mega could be the king-hit that perfectly fits that bill and puts the nation on the global technology map. M

Setting big projects up for


With most companies experiencing major project failures each year, the wasted time and resources is substantial. Here, Tony Street CA, advocates for ‘Better Business Cases’. Street is a leading strategist and consultant on capital expenditure management, experienced in large scale, high level corporate capex management.


ost companies have at least one major project failure a year, according to a 2010 KPMG report. Making good decisions about which projects to support with finite resources depends on robust business case preparation. Limited resources must go to Tony Street. projects with the best chance of success, so it makes sense to give projects that best chance by utilising robust business case infrastructures.

Senior executives do not effectively utilise advice – according to a 2010 US study by See, Morrison, Rothman and Soll – yet incorporating input from others can enhance decision-making. The study explored the detrimental effects of power on confidence, advice taking, and accuracy. Results from a series of experiments found that although higher power participants had greater confidence in their final judgements, they had significantly less accurate final judgements and took less advice than those with lower power. This suggests that a management culture which promotes team input into business cases will gain from more informed decision making. Robust business case infrastructures AUGUST/SEPTEMBER 2013 | 45




normally require a formal process of preparation, research and decision making that requires involvement of the right team members and management, in the correct sequence. The NZ Treasury has published a series of guidelines for preparing Better Business Cases (BBC) for larger scale projects based on a five stage process. The aim is to improve the quality of analysis and decision making around capital expenditure. This framework can evaluate the business case across strategic, economic, commercial, financial and management considerations. Clearly there is a need. A 2010 survey by KPMG found that 70 percent of companies experienced at least one major project failure during that year. It also found that only one-third of companies always prepared a business case – a plan drafted before the beginning of a project, setting out what benefits needed to be achieved, at what cost. The survey also found that 60 percent of organisations did not have a formal system in place to measure a project’s benefits. Key aims of business cases should be to promote informed decision making, innovative thinking, proper risk analysis, better value, and benefits trajectory monitoring. In terms of benefits trajectory, the focus of project management so often ceases at the project commissioning stage of the traditional ‘S’ curve, whereas the crucial benefits realisation phase is overlooked. Business cases provide the essential link between strategic plans and the organisation’s underpinning operating budgets and targets. This process also forms an important sub-set of an organisation’s capital management infrastructure which, amongst other objectives, will identify the entity’s cost of capital and communicate return on capital objectives. American quality control champion, Edward Deming, believed that poor capital allocation occurs when a business lacks a well-designed capital allocation system disciplining management to optimise shareholder value. It is no surprise that the consistent leading performer on the NZX for the past Authorisation and Delegation Management Option 1 Option 2

Selection Criteria Strategic Financial Risk

Informed Decisions

Selected Option

Option 3

Colloborative Work Flow and Reporting


Value Delivery

decade – Port of Tauranga, has for the last 12 years used capex software to increase confidence levels in relation to their capital expenditure programmes. Good business cases have a number of characteristics in common. For example, they always present rules for deciding which data belongs in the case and which do not. A logical structure comprises: • Introduction & Overview/Subject Statement; • Assumptions & Methods; • Business Results; • Sensitivity & Risk Analysis; • Conclusions & Recommendations. INTRODUCTION & OVERVIEW/SUBJECT STATEMENT The business case subject statement describes what the case is about. The proposed actions are described, and the business objectives they address are presented. The subject statement also identifies the different scenarios that will be compared. The author of the business case effectively proves that one scenario represents the better business decision by comparing projected results from two or more action scenarios, and where appropriate, one of these will be a ‘business as usual’ scenario. Only tangible costs and benefits belong in the business case, because if an outcome is truly intangible, then there is nothing to measure, and no evidence that it has occurred. Once the author of the business case names the business objectives addressed by a proposed action, and shows tangible measures for them, targets can be identified for each objective. Targets ultimately play a key role in establishing the value of both non financial and financial benefits. When a target is set, the author can ask what the value is in reaching the target, and what the value of the benefit is that contributes to reaching the target. ASSUMPTIONS & METHODS The role of assumptions play a crucially important role in the business case. A good case will include an ‘Assumptions’ section within the’Methods’ component. The business case needs to stand on its key assumptions primarily because it predicts the future, which is fundamentally uncertain. Assumptions also play a key role in explaining business case results, and in measuring and reducing uncertainty for projections. BUSINESS RESULTS The business results section of the business case provides answers to several important questions, including, “What happens if we implement each scenario, and which scenario represents the recommended course of action?” Business



results are addressed in business terms – being the financial and non-financial outcomes. SENSITIVITY & RISK ANALYSIS The next essential element of a business case requires sensitivity and risk analysis to be addressed. Decision makers need to know the likelihood that results will be close to the predicted values and the likelihood that they could be quite different. They also need to know which risk factors need to be examined carefully – particularly those risks that would have a big impact on predictions. Risk analysis is usually undertaken using Monte Carlo risk simulations (a broad class of computational algorithms that rely on repeated random sampling to obtain numerical results; ie by running simulations many times over). This technique requires that key assumptions are assigned probability profiles. The output forecast is recorded after all input assumptions are allowed to change at once – repeated thousands of times. CONCLUSIONS & RECOMMENDATIONS The final section of the business case is conclusions and recommendations, which will outline the reasons for selecting the preferred option. It is suggested that reference is made to a benefits realisation register to monitor value delivery. Proprietary low risk software applications are now available

to enable business cases to be prepared on a basis that scales the required content and presentation format based on the size and type of project. For example, a $70K health & safety proposal could be presented on just a two page capex request template, perhaps integrating a graphical user interface (GUI) tool so that team members can quickly assess key drivers such as accident probability; frequency of risk exposure; possible consequences, and risk reduction targeted. The objective is preparing better business cases – in a fraction of the time. In other examples, the economic business case, workflow, collaboration and reporting process in many organisations can be automated, with obvious productivity benefits. The diagram illustrates the key elements of such a system. The old approach saw team members develop spreadsheets ‘on the fly’ which were inconsistent, time-wasting and error prone. Capex proposals and business cases were submitted using the internal ‘snail-mail’ system and approval tracking proved a substantial drain on administrative resources. To summarise, business cases provide an essential management tool to ensure that resources are allocated to best effect, requiring robust appraisal of alternatives and best practice risk assessment. Following Treasury’s lead, many boards and CEOs have now made it a priority to upgrade their capex and business case infrastructures. M AUGUST/SEPTEMBER 2013 | 47



New Zealand’s leading payments provider, Paymark, has appointed Vanessa Stoddart as an independent board director. She has 25 years experience in the legal, manufacturing, packaging, airline and engineering industries, previously holding senior executive positions with a business transformation focus. She currently divides her time between a number of boards and advisory groups including the Otago University Business School Advisory Board, Better Public Services Advisory Group to Government, Global Women and The New Zealand Refining Company.

and finance and the not for profit sector. Caisley also holds a governance role with the New Zealand Fire Service as a Commission Member. Carl Devereux has been appointed as Christchurch manager for engineering company Aurecon. He has more than 17 years experience of structural and civil projects, with a focus on building structures and seismic engineering. Devereux was heavily involved in the emergency response and recovery following the Canterbury earthquakes and continues to provide technical advice to the Government and building owners on all aspects of earthquake damaged and earthquake risk buildings. He worked as part of USAR immediately after the earthquakes and was subsequently seconded to CERA as lead engineer for the Significant Buildings Unit.

DLA Phillips Fox has announced the appointment of two new partners – Adam Holloway and Terence Ng. Holloway is part of the litigation team in Wellington and has been with the firm since 2003. Ng is a member the banking & finance team in Auckland. His fluency in Cantonese and Mandarin and indepth knowledge of Asian markets are instrumental in the growth of the Asian practice team.

3D visual solutions and integration company Nextspace has appointed Ian Black as a director and Robert Simon as business development manager. Black was CEO of various SAP subsidiaries in New Zealand and Asia, before being COO for SAP’s ANZ region. Most recently he was SAP (ANZ) VP of strategic industries and accounts. He is currently CEO of Triplejump Group. Simon has

Southern Cross Health Society has appointed Vicki Caisley as head of people & development. She joins Southern Cross from accounting and business consultancy Grant Thornton, where she was national director, people and ulture. She previously worked for the Auckland District Health Board as well as banking

joined Nextspace as BDM to focus on SAP Visual Enterprise solutions for local and Australian clients. Simon was previously GM at CIBER and has held SAP Practice Lead roles at Hewlett-Packard and Cap Gemini NZ. National health insurer UniMed has appointed two new directors to its board; Jane Huria, of Christchurch and Tim McGuinness from Wellington. Huria has lengthy experience as a director in the public and private sectors, commercial and not for profit. She is deputy chair of the Electoral Commission. McGuinness has been closely involved with several substantial New Zealand investment and superannuation funds in a governance role. He currently chairs the boards of trustees of the Dairy Industry Superannuation Scheme and Fonterra Superannuation Scheme. The Financial Markets Authority (FMA) announced recently that CEO Sean Hughes will not seek re-appointment for a second term. He will continue in his role until the end of the year. FMA chair Simon Allen said Hughes had done an outstanding job leading FMA, from its establishment three years ago, to building credibility and confidence in the new regulator and financial markets.

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| | 49

Executive Reward

The new normal for senior executives by John McGill


here are a number of ways of looking at the linkages between work, life and diversity as it relates to our executive workforce. To view this from a historical perspective is useful as it highlights the difference in today’s workplace. What’s different about executive jobs today as distinct from 35 years ago (when I started in the workforce) shows a picture of steady change, driven, I believe, by the rise of new social norms. To take a number of the more obvious changes as compared to earlier times I would note: • Private offices while not rare, are very much less widespread than previously; • Working hours have become more flexible – although for executives I suggest this has not made any difference at all to how they work; • Dress generally has become more casual, ties are certainly seen much less often; • A less unionised workforce, more exposure to overseas pay systems and processes, and a more mobile workforce (for example, flying to London is a similar price in dollar terms today to what it was in 1975), have challenged and changed our remuneration structures as noted below; • We have become more aware of the different groups in our society and how to interact with these diverse groups to drive higher productivity and engagement; ethnic groups are better integrated, religious tolerance is higher, the disadvantaged are better understood (for example, finding a disabled toilet in 1975 New Zealand would be near impossible), and so on; • The positive and successful moves, particularly from the broader public sector, to increase the number of women in senior management and governance positions is changing the profile of many organisations and boards. Slow, in many instances, but positive nevertheless. What does this all add up to? The workforce generally is certainly

more open, less structured and more inclusive. We would see three key areas of impact. On pay, it is fair to say that executive remuneration is much higher, relatively speaking, than in previous times and that this gap is likely to continue to increase. This trend is not a New Zealand one and we are affected by what happens offshore and we may just be returning to some long term trends if we choose to look over the past 100 year or more perspectives. Any international recruitment or search assignment will test local pay structures particularly around short and long term incentive pay. Secondly, we see the increased accountability of senior roles, sometimes brought about by legislation, changing organisation structures (remember the executive delayering of the early 90s), rapidly changing social norms (executives are expected to be more visible both internally and externally) and increased demands from stakeholders. Lastly, technology has made a difference in the use and application of information by increasing the breadth of data whilst developing the means of analysing data in a faster, more efficient manner. Faster would seem a massive understatement given that our ability to process data is incredible compared to earlier times (the recent metadata debate concerning intelligence services is but one glimpse of the processing sophistication that is being developed). Much is being written on the diversity subject and there are many other changes that can be debated and factored in, such as the much discussed generational differences and the manner in which the different demographics use social media. Our world is busy and constantly evolving, with many of the changes positive by any criteria. Some issues, such as the increasing pay differentials, are not so pretty and our methods by which we process and deal with these issues will need to become much more astute. John McGill is CEO of remuneration and performance management consultancy Strategic Pay.

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Judith Collins Diversity delivers dividends at the board table


am often asked whether the Government has any plans to follow other countries and make quotas on boards for women and ethnic minorities compulsory. Before entering parliament, I ran my own legal practice and was both a public company director and chair. I had also owned and managed two restaurants. As a business woman, having an ear to the ground and an understanding of the market drove my business decisions. Now, as a Minister, one of the best parts of my job is meeting Kiwis from all walks of life and business backgrounds. More than one third of the people living in Auckland were born overseas. More than 200,000 Aucklanders are of Asian ethnicity and 18,000 are of African, Middle Eastern or Latin American descent. Women make up around half our total population. New Zealand’s diverse population offers valuable insight into the needs and expectations of New Zealand’s market.

52 |


Currently, this diversity isn’t reflected in the governance of organisations. This mismatch is a lost opportunity to put diversity at the very centre of decision-making. Whether a business provides goods or services or both, increasingly diverse markets present challenges and opportunities both domestically and abroad. But dealing with diversity needs to be more than a token gesture or a clip-on to business. Diversity must resonate from the heart of any successful organisation. All Kiwis have an interest in organisational governance and representation being the very best it can be. We must ensure that we are making the most of all the skills, talent and expertise available to us. As Minister of Justice, I appreciate that individual board appointments reflect a range of factors – including a person’s governance experience, technical competence and the ability to work well with the other members of the board. A board must also be able to challenge its own processes and decisions.

Judith Collins, Minister of Justice, Ethnic Affairs and ACC, implores businesses to look beyond the ‘safe’ options for board appointments, promoting diversity as a tool for introducing fresh thinking and better connection to markets.

Appointing a person who has no previous governance experience to the role may carry risk. On the other hand, putting too much value on pre-existing governance experience of candidates may lead the board or shareholders to appoint people who are seen as ‘safe options’ but in turn may starve the board of fresh thinking. Drawing candidates from a narrow pool may become self-perpetuating. It still surprises me to hear CEOs, directors and senior managers admit that they really have no clue how to approach diversity, let alone how to use it as a strategic tool. Diversity can bring dynamism to the board table and it can solve this problem of connectedness at its source. I’m personally thankful that, in New Zealand, we do not have quotas forcing the hand in the board appointment process. I believe targets are a better way to achieve diversity without sacrificing quality. As a Minister, I make regular appointments to a range of boards. In each case I’m com-

Ethnic Affairs Minister Judith Collins with Zehra Akbari, Pakistani High Commissioner (left) and Rosmidah binti Zahid, Malaysian High Commissioner, (right).

mitted to identifying and appointing the best person for the role. I consider the needs and balance of the existing board to which I am making appointments. I find that there are ample suitable candidates who happen to be women or from ethnically diverse backgrounds. It is the appointees themselves who then demonstrate the value of having the benefit of their diverse experience and knowledge. Each year the Office of Ethnic Affairs holds the EthnicA conferences in Auckland, Wellington and Christchurch linking businesses, networks and talent. This year’s conference had a special focus on leadership – specifically how the ethnic sector can show leadership and how leaders in our ethnic communities can be developed and supported. I encouraged conference participants to be a strong voice not only in their own communities, but a strong voice in the decisionmaking processes of New Zealand. I want to see all New Zealanders given a fair go and I want our ethnic leaders to suc-

ceed, regardless of their ethnicity or cultural background. As part of our wider government programme, the Office of Ethnic Affairs is delivering a range of workshops and initiatives designed to give all ethnicities the tools they need to participate in all aspects of life in New Zealand and take on leadership roles. I’d like to see greater participation from all our ethnic communities in leadership positions especially more ethnic women in leadership positions. Ethnic women are often natural leaders in their own communities, bringing creativity to problem solving, but few branch out and use their leadership skills in the wider community. They are largely absent on company boards. To support ethnic women leaders in New Zealand, the Office of Ethnic Affairs runs the Ethnic Women’s Leadership Programme. The programme helps women develop leadership skills and equips them with the tools they need to be agents for change both in their own communities and wider New Zealand society. The Office of Ethnic Affairs’ Nominations

Service also provides a database of ethnic New Zealanders who are suitably qualified for appointment to boards, committees and advisory groups. The Nominations Service is a platform for ethnic leaders to register their interest and availability to take up board appointments. The Office of Ethnic Affairs works to identify and remove possible personal and social barriers, to make sure all ethnic Kiwis participate in all aspects of life In New Zealand. I’m committed to making sure all ethnic Kiwis are given a fair go. As businesses you may share this goal. You have the additional incentive that, by increasing the status of diversity within your business you’re improving your ability to understand your clients and customers both locally and on the global market. Our nation is home to over four million New Zealanders and it’s important we make the best use of everyone’s talents. Valuing the contribution of all our citizens is not only the right thing to do, it’s the smart thing to do. SEPTEMBER 2013 | THE DIRECTOR | 53


NZ’s dangerous

blind spot New Zealand’s relative freedom from corrupt practices may be shielding directors from facing up to bribery and corruption in other jurisdictions. In the second of her two articles on ethical governance in Asia, Ruth Le Pla examines what steps directors can take as they engage more closely with at-risk countries.


eca Group, Asia, MD Paul White reckons the Jakarta Post is becoming a good read these days. Pointing to the rack of newspapers in a Jakarta hotel he says every issue carries front-page news on local corruption involving government, business or police. Such articles are helping remove some of the previous taboos around discussing practices everyone knew were rife but few felt free to name in public. “It’s healthy that these stories are out there now,” he says. White says Beca’s longstanding connections and reputation in Indonesia safeguard it from any expectations the company will smooth the path of commerce in ways considered unacceptable in New Zealand. Ironically, for the New Zealand-based directors of many Kiwi companies, our country’s strong reputation and top international transparency ratings could be a problem. Deloitte New Zealand’s Lorinda Kelly believes many of our directors can’t quite join the dots between their increased exposure to organisations in at-risk countries and their own reputation and business bottom line. An associate director and part of Deloitte’s team of forensics specialists, Kelly says many New Zealand directors still see bribery and corruption as something that happens to other people somewhere else. “Their views are still quite domestic,” she

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says. “They don’t see bribery and corruption happening here so it’s very hard for them to appreciate it happening to their organisation overseas.” New Zealand regularly hovers at the top of Transparency International’s Corruption Perceptions Index which is widely acknowledged as one of the most robust measures of public sector practice in 176 countries around the world. Even so, Transparency International NZ chair Suzanne Snively says anyone who believes New Zealand is a corruption-free zone is mistaken and warns there’s no place for complacency. Three percent of New Zealanders surveyed In Transparency International’s 2013 Global Corruption Barometer reported paying a bribe. Thirty five percent of them said it was the only way to obtain a service; 29 percent said they did it to get a cheaper service; 21 percent paid a bribe to speed things up; and 15 percent saw it as a gift or “gratitude”. Making matters worse, 65 percent of those surveyed thought the level of corruption in New Zealand has increased over the past two years. Snively says she is not surprised by the research but acknowledges many people will be. She warns that as we seek to strengthen our business and trade opportunities with

countries that commonly rank poorly on anti-corruption indices, our exposure to illegal activity such as bribery is increasing. Such findings and messages align with recent Deloitte research. In its first ever survey of bribery and corruption in New Zealand and Australia, “A storm on the horizon?” 34 percent of respondent organisations had operations in high-risk jurisdictions. Of these organisations, 21 percent have experienced a bribery and corruption incident in the past five years, and 61 percent of these occurred in the last 12 months. Just over a fifth of respondents say their organisation does not discuss corruption risk at board or management level. Making matters worse, Kelly says New Zealand is an international laggard on the legislative front. Surprisingly, we’re one of the few countries where it’s still legal to grease palms through what are politely called facilitation payments: handing over some extra dosh to get a routine task done faster or to your satisfaction. Our anti-money laundering legislation could do with an overhaul. The Secret Commissions Act, which covers bribery and corruption in the private sector, is over 100 years old and carries a maximum fine for corporations of just $2000. And, while we’re at it, the Crimes Act, which covers public sector misdemeanours, could do with some updating too.

Then there’s our “embarrassing” status with the United Nations Convention against Corruption which we’ve signed up to but never ratified. Kelly says the UK Bribery Act has galvanised the directors of many British firms but New Zealand directors seem oblivious to how it can shift the rules for them too. “I don’t think there are that many directors who appreciate that if their company has a presence in the UK they are captured for everything they do around the world.” The same could reasonably be said about America’s Foreign Corrupt Practices Act which covers international companies working outside the US. Within their own organisations, Kelly says directors need to bed in anti-bribery and corruption ethics and practices throughout their culture. “That’s where it becomes a big challenge,” she says. Many New Zealand organisations don’t have a bribery and corruption policy. And of those that do, many are not communicating it to their employees. “If you’ve got a zero tolerance policy your people at least need to be aware of it,” says Kelly. She advises organisations to train their employees on their bribery and corruption policies, and raise awareness of what people could be exposed to and what they should do in those situations. Employees also need to know who they should tell about any incidents. Kelly says it’s not just about legal duties but also helping staff understand their moral obligations as well.

Lorinda Kelly.

Suzanne Snively.

“If bribery and corruption is never talked about within an organisation, corrupt behaviour can become normal and accepted.” Even armed with such policies, many Kiwi business leaders talk of having to walk a very fine line in at-risk countries. They must learn how to adapt their world view and practices to overseas norms while at the same time remaining true to their own legal and, some would say, moral obligations. For the past 21 years, the ASB’s parent company Commonwealth Bank of Australia has been operating in Indonesia through its local subsidiary PT Bank Commonwealth Bank Indonesia. Talking in Jakarta the ASB’s GM, global transaction banking, David Bell says many companies soon learn that what works in New Zealand is very unlikely to work in its entirety offshore. “And until you learn what the local way of doing business is you are likely to be unsuccessful”. He says Kiwi organisations need to

Kim Campbell.

understand and be comfortable with any new business environment before injecting capital into it. Bell tells the story of an Australasian property investment company that moved in to an Asian country where extra payments were just part of doing business. “That didn’t fit their Australian/New Zealand ideas of ethical governance and they hadn’t really appreciated the scale to which such payments occurred and were deemed normal,” he says. “Their board couldn’t gain comfort with it and they pulled out of the market. It just wasn’t a great experience for them.” EMA chief executive Kim Campbell says directors “can’t just sit in an ivory tower in New Zealand and write policies”. He urges them to understand what happens at an operational level. “You can’t just say you didn’t know what was going on. That’s not good enough. “You need to actually go there, walk



around, pick up invoices and spend some time understanding what the transactions are.” He says under-invoicing was, and is, quite a common practice in many overseas countries and warns New Zealand companies to steer clear of it as it will “inevitably” catch up with them. Nor, he says, can Kiwi companies expect a local distributor or agent to handle such practices on their behalf: “that just doesn’t work”. “You need to put structures in place to protect yourself and make sure your people aren’t getting involved in any corrupt practices.” Deloitte’s Kelly warns that organisations can be prosecuted for what their agency does on their behalf. “Working through an agency doesn’t remove the risk of perception that your organisation is involved in bribery or corruption either. So their actions can damage your reputation too.” What can directors look out for? Deloitte’s “A Storm on the Horizon?” report

lists a number of possible indicators including large petty cash movements, unusual payments, inadequate or missing documents, backdated invoices and requests for unusually high commissions. It warns that activities such as paying for the schooling of foreign officials’ children, and purchasing or renting properties from foreign officials or their relatives may also raise red flags. So too can shelling out for gifts, hospitality, travel and entertainment for these officials. As Kelly says, directors know there are risks and they should be doing something to manage bribery and corruption. “But

CRISIS MANAGEMENT, RISK GOVERNANCE AND THE STRATEGIC ROLE OF THE BOARD AUT Business School presents a half-day governance master class for company directors facilitated by Jeremy Bendall and Craig Stobo Engage with other corporate board members Hear from leading experts in crisis management, risk governance, strategy development and execution Debate governance issues that are critically relevant in today’s business climate Develop strategies and best practice to ensure your board maintains a strategic focus and management work within the risk appetite and tolerance set by the board When: Venue: Cost: Register:

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2nd October 2013, 3-9pm Northern Club, 19 Princess Street, Auckland $850 plus GST - includes working dinner phone 09 921 9999 x 5771 for more information


it’s not seen as urgent or a high priority for them. It doesn’t quite make it to the top of their to-do list.” Ruth Le Pla accompanied a recent New Zealand trade mission to Indonesia with funding from the Asia New Zealand Foundation. The mission was organised by Export NZ, the EMA and the ASEAN NZ Business Council.

This is the second of two articles on ethical governance in at-risk countries. The first, “Fingers in the till”, was published in The Director, Management magazine, July, 2013.

Chairing highperforming Synlait By Iain McCormick Graeme Milne, chair of recently listed Synlait Milk tells Iain McCormick about the company’s successful growth strategy and the lead up to its listing. Milne is also a director of FMG (Farmers Mutual Group). His impressive credentials in the development of private sector companies extend also to health sector leadership.


raeme Milne, chair of the recently listed Canterbury dairy company Synlait Milk Limited (SML), is a passionate believer in New Zealand Inc. He argues that the way to build a better and healthier society is to focus on growing a profitable high-value private

sector, thereby enabling the spending of more public money on vital infrastructure, in particular health and education. Milne, the former CEO of Bay Milk Products, became CEO of the New Zealand Dair y Group prior to the formation of Fonterra. He then became CEO of Richmond, during the hostile takeover by PPCS (now Silver Fern Farms) and subsequently CEO of Bonlac in Australia. The name ‘Synlait’ is derived from ‘synergy’ and ‘milk’. The company’s roots date from 2000 when the founders purchased the Robindale farm and grew it into a 3000 cow unit. By 2006 the company owned eight farms and a substantial enough milk supply to kick start its own manufacturing site. It now has an impressive international customer base and considerable capability in spray drying and milk powder technology.

Synlait’s strategy is to move beyond ingredients to become a global supplier of infant nutritional and other high value products. Synlait debuted on the NZX on 23 July this year at a price of $2.20 and shortly after jumped to $2.80. The Initial Public Offering (IPO) raised $75m, which will fund growth in infant formula and nutritional exports. The success of the IPO will boost confidence in the local capital markets. Milne commented that without the IPO, Synlait would have generated good cash flows that could have funded expansions, but this growth rate would have been suboptimal. The company did not want to increase debt but wished to maintain a strong balance sheet. “So the decision was – shall we grow slowly and watch others move forward or shall we list and move faster. SEPTEMBER 2013 | THE DIRECTOR | 57

In the end it was an easy decision,” said Milne. “The IPO also gave an external valuation and liquidity to our shareholders,” he maintained. “It attracted support from institutions in New Zealand, Australia, Singapore and Hong Kong, plus retail investors and the company’s employees and suppliers.” The IPO had some interesting issues. In 2010 the Chinese firm, Bright Dairy, had become a significant shareholder in the company. The IPO saw its stake in Synlait reduce from 50.1 percent to approximately 39 percent. This represented an issue for Bright as with less than a 50 percent holding, it was potentially no longer able to consolidate the Synlait revenue into its own accounts. So as part of the IPO preparation, Milne and CEO John Penno talked to Bright’s Chinese auditors and the NZX. An agreement was reached that half the directors, four in total of which one must be a New Zealander, would represent Bright in order to maintain the required degree of control to enable Bright to continue to consolidate the Synlait revenue into their accounts. “The bookbuild we used to set the share price was an exciting process,” Milne said. “It is a delicate balancing act between price, quantity and getting the right investors. We were very pleased to get a new strategic shareholder in the form of Dutch dairy giant Royal Friesland Campina.” This company is one of the largest dairy co-operatives in the world and also an existing customer of Synlait. So after the IPO, Royal Friesland Campina holds approximately 7.5 percent, Bright Dairy approximately 39 percent, and Mitsui & Co approximately 8.4 percent. All t h i s m ay s eem li ke a m ajor achievement until you discover Milne is also among other things, the Chairman of the Waikato District Health Board. The board covers almost eight percent of New Zealand, from northern Coromandel to Mt Ruapehu and from Raglan to Waihi. In 2012/13 the DHB population was 371,540 and it employs more than 6000 people. Milne explained that whilst there are many similarities at a governance level between private and public organisations

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there are also significant differences. The Health Board is a crown entity with some board members elected from the local communities and some appointed by government while, for Synlait, it is the shareholders who appoint the initial group of directors post-IPO. This means that District Health Boards often have to rely on the appointed directors for finance and governance oversight. When

Milne started on the District Health Board he was initially the only one available to chair the audit committee, for an organisation with a total annual revenue of over one billion dollars! Dr Iain McCormick PhD is a governance and leadership advisor who heads and

Synlait – Aiming to be world’s best In 2012, Synlait was the first ever corporate farming operation to win Lincoln University Foundation’s South Island Farmer of the Year title. The theme of the award was excellence, leadership and innovation in farming. While a lot bigger than the average family farm, Synlait Farms operates 14 farms on nearly 4000ha on the same principles. The key components of successful family farms – values, rules and behaviour that all members agree to abide by – apply. In recent years Synlait Farms changed its focus from just getting the basics right to using good data and monitoring systems to ensure excellence in everything it does. More emphasis was placed on innovation. To be really innovative systems had to be repeatable, robust and deliver great results. Award chief judge Bob Simpson said Synlait Farms’ blend of family-based traditional farming practices with the best of modern corporate innovation and management systems stood out. “Synlait Farms’ approach to its people, its stock and its land can be held up as an example of what can be achieved when good leadership and good people go hand in hand.” Chief executive Juliet Maclean said Synlait Farms was good at collecting data, but concentrated on worthwhile data and ensuring the data was used. Being nimble and minimising bureaucracy was also essential, especially in a multi-farm business. Synlait Farms received a $15,000 travel award which enabled staff to study farming practices overseas and the hosting of a field day on a company property. Straight Furrow reported in April of this year that Synlait aimed to be the best multifarm dairy business in the world.


ISSN 1177-5815



Judging begins for Young Executive of the Year Award N

ZIM and Eagle Technology have found New Zealand’s three most outstanding young executives of 2013. They are the winners of this year’s NZIM/ Eagle Technology Young Executive of the Year Award three regional judging events. Picking the best of this bunch of extraordinary talent begins this month. The winner, New Zealand’s Young Executive of the Year, will be named at the 24th annual Deloitte/Management magazine Top 200 Awards in Auckland in late November. NZIM has been identifying the nation’s most talented young executives for 18 years. Most have become high achievers and leaders across the spectrum of the New Zealand economy, private and public sectors. Candidates are 35 years or younger. This year’s southern region finalist is Kate Scott, Managing Director of BTW South, from Cromwell. The central region finalist is Wellington-based Landcorp Farming’s senior business manager – dairy, Mark Julian and James McGlinn, chief executive of Eventfinda, based in Parnell, Auckland, is the northern region finalist. “As always, it’s a diverse group,” says NZIM Inc’s Membership Manager Liz Fernyhough who organises the judging of the national award. “And as always, they have already notched up outstanding career successes. It will be a tough call for the judges.” Events to name regional winners and the national finalists were held in Auckland, Wellington and Christchurch in July. “We noticed an increase in the number of candidates coming from technology, particularly web-based, companies in Auckland this year,” says Fernyhough. “I suspect that might become more common in future. The candidates and finalists from other parts of the country still generally reflect their particular regional activities and business strengths.” The Young Executive of the Year Award programme was established by NZIM and Management magazine to recognise and applaud the accomplishments and potential of stand-out individuals who are New Zealand’s next generation of top level

managers and leaders. Eagle Technology joined NZIM as the Award’s supporting sponsor in 2005. New Zealand enterprise needs competent and committed young leaders, says NZIM Chief Executive Kevin Gaunt. “Award finalists are identified by searching for young managers who are prepared to go beyond perceived limitations and who strive for personal and organisational excellence. We have spotlighted some exceptional individuals, both as finalists and as winners, over the years. Most of them have gone on to prove the importance of this programme, to themselves, to the organisations they work for and to New Zealand in general.” NZIM and Eagle Technology subscribe to the view that New Zealand needs an award programme that encourages, promotes and role models young managers and leaders. The country is struggling with a talent shortage in management ranks, just as it is in other levels of the organisation, says Gaunt. Recent research by global consultancy Deloitte shows more than 80 percent of local businesses are experiencing talent shortages and those shortages impact organisational performance. People make the difference to an organisation, Gaunt says. “We see the future potential each year when we interview the award finalists. What we need is for more organisations to see their people as strategic assets and invest in them. Talented and motivated young people always, and

2012 winner: Glenys Talivai (née Powell).

will increasingly, define the measure of an organisation’s success.” This year’s award judging panel will again be chaired by Jo Brosnahan, former chief executive of Auckland Regional Council and now a professional director and chair of Leadership New Zealand. The other judges are Reg Birchfield, a writer on management, leadership and governance and former publisher of Management magazine; Glenys Talivai, last year’s Young Executive of the Year and general manager of sales and marketing at the Medical Assurance Society; and Mervin Singham, Director of the Office of Ethnic Affairs at the Department of Internal Affairs. Previous Young Executive of the Year Award winners include: 2012: Glenys Talivai (née Powell) 2011: Hamish McBeath 2010: Claire Szabo 2009: David Larsen 2008: Jono Brent 2007: Mason Pratt 2006: Brett Gamble 2005: Grant Watson 2004: Anushiya Ayingaran 2003: Mike Sang 2002: Andrea McLeod 2001: Dr Richard Templer 2000: Joseph Thomas How the winners were chosen – see following page.

2011 winner: Hamish McBeath.

2010 winner: Claire Szabo.

Focus on Management

NZIM How the winners were chosen in Auckland and Wellington T here was stiff competition in the regional finals of the NZIM & Eagle Technology Young Executive of the Year Awards for 2013. The events were attended by a range of business professionals, past and present winners, esteemed judges and, of course, finalists. Mark Julian, Senior Business Manager – Dairy from Landcorp Farming took out the regional title in Wellington. Mark had stiff competition from other finalists, NZIM Wellington says, including Guy Spence from Opus International Consultants, Rebecca Ingram from NZICA and Shivan Reddy from Accuro Health Insurance. Mark was able to convey his business acumen, political savvy and leadership style through application of research, good practice disciplines and operational experience, combined with a high level of emotional and empathetic skills. While all the nominees interviewed demonstrated strengths and were excellent young executives in their field, the judges felt that Mark presented that “X factor” edge and would be an outstanding competitor for the nationals representing Wellington. In Auckland, the decision went the way of an inspiring young manager and entrepreneur,

James McGlinn, the Co-Founder and CEO of Eventfinda Limited. The judging panel was impressed that James has developed a business culture of excellence at Eventfinda in his time at the helm. Being aware that, as a developer at heart, communication wasn’t one of his strengths, he worked to improve his skills to the point where he is now a very good communicator with a proven ability to take his stakeholders with him even in difficult times. He is an excellent, people-orientated leader who leads by example and believes in empowering and supporting his team to success. James was selected among great company. Other finalists were Shawn Hamman from Yellow and Euan Armstrong from Guardian Group, contributing to a very competitive pool of young executives.

Ken McFarland – NZIM Emeritus Fellow.

Euan Armstrong, James McGlinn & Shawn Hamman.

Kevin Gaunt & James McGlinn.

Jan Alley, Sean Weekes & Robyn Walshe.

Euan Armstrong & Family.

STAFF NEWS Announcing NZIM’s General Manager, Capability Development


ZIM has appointed a new General Manager for Capability Development across NZIM Auckland and Wellington regions. Tait Grindley, previously General Manager, Business Development in Auckland, has been appointed in this highly visible role, accountable for driving sales and delivery of NZIM’s range of services, professional short courses and qualifications throughout New Zealand. As the primary leader of the capability development teams and a wide range of commercially-experienced facilitators, Tait will focus on achieving NZIM’s strategic goals in each region with an emphasis on business development, marketing and increased alignment of process improvement and structure. Tait has built his skills as a successful project manager with a number of large national projects during his four years within NZIM, and will continue these themes into 2014. Before joining NZIM in early 2009, Tait’s

Focus on Management

background was in senior business development and consulting roles within the executive recruitment, training and professional services industries in New Zealand and Australia. As a dynamic trainer and multi-functional HR professional, Tait has worked with leading international agencies in a variety of roles including the design and delivery of engaging and strategic training initiatives, working with market-leading diagnostic tools, technology implementation and social media strategy.

With his new NZIM role, Tait will be sharing his time across both NZIM offices and is available to discuss your strategic development goals. He has a passion for networking, dealing with a variety of people and is driven to deliver quality professional development training solutions, building relationships and ultimately increasing diversity, leadership and management capability in New Zealand. Contact Tait at NZIM on 0800 800 694 or

A new addition to NZIM Auckland


ZIM is pleased to announce the appointment of Gareth Bayliss, who joined the Auckland team in June in the role of Capability Development Consultant. Gareth has moved in to cover Justine Harvie’s position. She has left for 12 months to have her first baby. Gareth’s primary role is to identify new business opportunities, provide expert key account management and manage a number of NZIM’s successful extended programmes. Born in the UK, Gareth has come from an

established background as a qualified teacher but has also spent many years as a working actor, teaching a range of performing arts as well as course and curriculum management. His interest and expertise as an account manager and consultant comes from his ability to demonstrate exceptional communication skills, leadership, time management and administrative structure. He will fit in naturally as a results-orientated and hard-working employee and is looking forward to spending the next year working with the many organisations and individuals NZIM engages with. Contact Gareth at NZIM Auckland on 09 303 9102 or


of who owns what and where the lines are drawn. This programme is Ramon Booth. designed and delivered by NZIM’s Ramon Booth, who has been a learning and development trainer and consultant for more than five years. He has sound and practical experience in his areas of expertise, which include people skills development, coaching, facilitation, blended learning and e-learning design and development. As well as utilising traditional methodologies, he has a proven track record incorporating mobile technology and social media (Facebook, Yammer and YouTube) to bring formal and informal training to life to create relevant and applicable blended learning solutions. You can attend this programme at either NZIM Auckland or Wellington. Details of the next programme are at, or Ramon can be contacted directly at ramon.



ocial media has become the norm for communicating with friends, family and work colleagues. Some businesses have brought themselves online to adapt to how the world communicates – and bring their businesses to the world. However, with these new developments come new challenges in dealing with social media within the workplace. NZIM has identified these challenges within the public and private business sectors and developed an innovative new short course that focuses on answering the burning questions on the minds of policy-makers, internal managers and HR professionals. With NZIM’s Management in Social Media, participants gain a better understanding of the different social mediums, and the role social media will play in the personal and professional lives of employees. The key to the programme is to understand how social media can complement the goals of the organisation and provide clear expectations

NZIM Team Leader Series – National Certificate in Business Level 4 ZIM is proud to present New Zealand’s first blended and nationally-recognised management qualification. The National Certificate in Business Level 4, also known as the team leader series, is made up of three short and achievable courses, titled: Team Leader – Essentials: This course is designed to provide the skills required to lead a team that is on the front-line of an organisation. It will help you to understand the role and responsibility of the front-line team leader and manager in today’s workplace. You will also explore how to employ core communication skills, including listening and giving feedback, implement time management techniques and train and coach team members. Team Leader – Building Effective Teams: Designed to provide information and skills for those who want to lead really effective teams, this course is for those who don’t want to settle for being a “good” team leader. It will help you to understand performance management principles, establish key performance indicators for a team and individuals, understand the process of team formation and guide the development of a team. Team Leader – Operational Management: A short course designed to provide information and skills to develop and lead effective, results-orientated teams. This will help you develop skills to negotiate win-win outcomes,

use different leadership styles to impact team performance, and initiate and manage change within a team. This qualification is blended and includes three blocks of two days training over several months, with an assignment after each block. We support your learning by providing pre – and post-learning materials to help identify the specific challenges you face as an individual, and transfer what you have learned in the classroom to your workplace to really embed that learning. For more information see

NZIM announces strategic partnership with AAPNZ N



ZIM has signed a formal agreement with the Association of Administrative Professionals New Zealand (AAPNZ) to acknowledge their mutually beneficial working relationship and to work together on more strategic initiatives. The purpose is to collaborate on information and professional development projects and provide invitations to each organisation’s membership bases in a bid to work more closely together. This will include the opportunity for NZIM to deliver qualifications relating to business administration and other courses. Focus on Management

Guest speaker Tom Thomson.

Operational excellence for managers N

Kate Scott Sth Region winner 2013 & Gary Langford, Eagle Tech sponsor.

Finalists: Mark Rogers & Emma Cridge and below; Stephen Lowe & Michael Woodward.

Young Executive of the Year K

ate Scott, managing director of BTW South Ltd, has been named as the Southern Region winner of the NZIM & Eagle Technology Young Executive of the Year Awards for 2013. Kate founded BTW South in 2007 with business partners. The firm has become recognised as industry leaders in the provision of planning and surveying services to the lower South Island. Initially employed in the day-to-day running of the company, Scott became responsible for its on-going expansion. As the managing director, her role includes multimillion-dollar specialist project work for large corporate clients, and she is sustaining her focus on the company´s continued business growth, as well as improving financial performance and providing a return to shareholders. She is committed to inspiring by action and building a learning culture in her organisation, providing leadership and mentoring to a growing number of employees.

Focus on Management

ZIM Southern has recently reviewed and refreshed the Operational Excellence for Managers programme to bring it in line with the time constraints of the modern workplace and demands for growth and improvement. Joseph Thomas, CEO of NZIM Southern, says: “Stakeholder feedback is very clear, managers are time-poor but have a greater need than ever to access tools and techniques to grow the business and ensure their organisation’s bench strength in challenging times.” Research shows that the successful manager is acutely aware of the value of work/life balance. That led NZIM Southern to review the programme, reduce the timeframe to minimise the need to be out of the workplace and away from family and at the same time increase the intensity and focus within the content. The Operational Excellence for Managers programme now consists of four-and-a-half days of intensive professional development aimed at enhancing organisational strategy and achieving operational excellence. Key components of the programme include strategic thinking and planning, building alignment within work practices, tools

and techniques for continuous improvement, efficient task performance and work team development. Content is aligned to international trends and research to provide participants with a balanced range of skills. As many as 90 percent of businesses fail to implement their organisational strategy, which is an alarmingly high figure. In part this is because of the failure to operationalise the strategy, align different parts of the business, ask critical questions and learn from the insights. The Operational Excellence for Managers programme focuses on all of these aspects in the context of New Zealand business. Participants are invited to bring and work with real examples, problem-solve and critique in syndicates and clearly demonstrate “joined-up thinking” for their management role in the workplace. This programme actively reclaims the value of management. Enrol now to secure your place on the programme starting October 14, and contribute to your organisation’s growth. Residential and non-residential options are available. Contact Amanda McClelland 029 770 9669 email amanda@nzimsouthern. or Roger Gabites 029 770 9670 email


ZIM Southern is collaborating with young movers and shakers. Sustainable enterprise was the topic of hot debate at a buzzing event, co-hosted by the New Zealand Institute of Management Southern Inc and Canterbury Young Professionals on May 28, at the iconic Epic Innovation centre, in Christchurch. Attendees covered the entire spectrum of ages as participants debated how to harness the flexibility, enthusiasm and creativity of youth and at the same time gather the experience and wisdom of an older generation of leaders and managers. Guest presenters included Coralie Winn, (Founder and Director of Gap Filler), Jason Pemberton, (General Manager, Volunteer Army Foundation) and Raf Manji, ex-investment banker, angel investor, social entrepreneur and founder of the Susteno Speaker Raf Manji. Institute online think tank).

Speaker Jason Pemberton.

Speaker Coralie Winn.





For more information phone 0800 800 NZIM (0800 800 694) or visit

1-2 Conflict Resolution 4-17 NZIM Diploma in Health & Safety Management 5-8 NZIM Diploma in Management (Advanced) 6-7 Leadership 8-9 Coaching and Mentoring Skills (for Managers) 8 Coaching and Mentoring Skills (Foundation) 8-9 Business Communication 12-13 Assertiveness Skills 12-13 Think On Your Feet 15 S tart NZIM Diploma in Project Management 16 Lean 6 Sigma – Yellow Belt 19-20 Health and Safety Management 19 Operations Management 20 Ensure Team Effectiveness 21 Facilitate and Capitalise on Change and Innovation (DFM) 22-23 Recruitment and Selection 26 S tart Diploma in Competitive Manufacturing Management 29-30 Team Leader – Operational Management


2-3 Change Management 9-10 Developing Influencing & Motivation Skills 9-10 Leadership in Action 11-13 Four Quadrant Leadership 16-17 Finance for Non-Financial Managers 18 Managing People & Performance 23 Effective Time Management 23-24 Workplace Assessment 25 Manage an Operational Plan (DFM) 25-27 Project Management Fundamentals 30 Courageous Conversations


2-3 Team Leader – Essentials 3-4 Applied Management 3-4 Advanced Facilitation 7-8 Needs Analysis & Programme Design 10-11 Sales Management 14-15 Interpersonal Communication Skills 15 S tart NZIM Diploma in Supply Chain Management 16 Implementing Human Resource Strategies 17&18 Train the Trainer (Part One) 21 Introduction to Management (Blended) 22 Managing Quality Customer Service (DFM) 23 Ensure a Safe Workplace (DFM) 24-25 Train the Trainer (Part Two) 30-31 Problem Solving & Decision Making

For more information phone 0800 800 NZIM (0800 800 694) or visit

1 5-6 7-8 7-8

7/8-31 12-14 12 13-27 13&20 19-20 21-22 22-23 26-27 29-30

Effective Time Management Courageous Conversations Team Leader – Essentials Organisational Culture and Performance National Certificate in Business (FLM) – Level 4 Project Management Fundamentals Implementing Human Resource Strategies Introduction to Management (Blended) National Certificate in Business (FLM) – Level 3 Interpersonal Communication Skills Developing a High Performing Team Operations Management (DIM Modular) Facilitation Skills Introduction to Supply Chain Management


2 Effective Business Writing 4 Ensure a Safe Workplace (DFM Modular) 5-6 Project Management Advanced 9-10 Project Risk Management 11-12 Human Resource Management (DMA & DIM) 13 Internal Consulting Skills 16 S tart Diploma in Project Management 19-20 &26-27 Train the Trainer (NCAET Paper) 23-24 Team Leader – Building Effective Teams 26-27 Presentation Skills 30-1 Oct Negotiation Skills 30-1 Oct Business Finance (DMA)


2-3 Think on Your Feet (R) 7-8 Assertiveness Techniques (prev Assertiveness Skills) 8 Start NZIM Diploma in Management (Advanced) – Level 6 8-9 Leadership 9 Manage People Performance (DFM Modular) 10-11 Project Risk Management 14-15 Health & Safety Management 16 Manage Quality Customer Service (DFM Modular) 17-18 Strategic Thinking Tools 21 Coaching and Mentoring Skills (Foundation) 21-22 Coaching & Mentoring Skills for Managers 30-31 Team Leader – Operational Management


For more information phone 03 379 2302 (Christchurch C), 03 455 5165 (Dunedin D) or 03 218 7451 (Invercargill I & Queenstown Q) or visit


12-13 Accounting for Non-Accountants 1 D 12-14 Four Quadrant Leadership Stage 2 with Wilf Jarvis C 14 Courageous Conversations I 19-21 Team Leader – Understanding NZ Employment Law C 21 Emotional Intelligence I 22 Managing Stress I 22 Problem Solving & Decision Making C 26-27 Assertive Behaviour Strategies C 29-30 NZIM Diploma in Project Management C

SEPTEMBER 2 2-3 3 5-6 5-6

Audit Training D Recruitment and Selection C Communication Skills I Essential Sales Skills C Team Leader – Building Effective Teams I 9 Effective Training for On-The-Job Learning C 9-10 How to Manage & Lead Successfully D 10-12 Four Quadrant Leadership C 12-13 Accounting for Non-Accountants Stage 2 I 16 Effective Delegation C 18-19 Strategic Management (NZIM Dip Mgt Advanced) L6 I 19 Governance Best Practice I 19-20 Creating Collaborative Relationships at Work Stage 1 C 21-28 ESCO – Personal and Professional Discovery C 23 Time & Self-Management D 23-24 Negotiation Skills C 24 Courageous Conversations D 26-27 Strategic Thinking and Planning C 30-2 Oct Team Leader – Building Effective Teams C 30-1 Oct Presentation Skills C


2-3 HR for Non-HR Managers C 4 Maximise Your Workflow Productively C 7-8 Marketing for Non-Marketing Managers C 7-8 Operations Management D 8-9 Negotiation Skills D 10-11 Coaching for Performance Excellence C 10-11 Building Relationship Versatility I 10-11 Team Leader – Operational Management I 14-18 Operational Excellence for Managers I

Focus on Management

INSPIRING MANAGERS Our aim is to build management capability through membership, development and research. OUR FOCUS IS TO: • Research leading management trends and practice and promote a constantly developing model of best management capability for New Zealand.

• To identify leading management role models and provide awards that recognise the career and educational achievements of managers. NZIM Inc CEO: Kevin Gaunt FNZIM, FAIM Email GM: Tait Grindley ANZIM Auckland Office PO Box 6600, Wellesley St, Auckland 1141 Ph 0-9-303 9100, 0800 800 NZIM Email Website Wellington Office PO Box 67, Wellington 6140 Ph 0-4-495 8300, 0800 800 NZIM Email Website NZIM Southern Regional Director: Michael Weusten FNZIM CEO: Joseph Thomas AFNZIM PO Box 13044, Christchurch 8141 Ph 0-3-379 2302, Fax 0-3-357 8003 Email Website

Jolyon Manning, A strong interest in sustainable development – of both people and places – drives Jolyon Manning. Whether it’s his own property that he is working on for the enjoyment of the wider public, or demographic shifts he warns the country needs to understand to fully maximise their potential, he strives to support his region as it changes for the better.


t is now several decades since I was personally nominated as an Associate Fellow, a gesture I very much appreciated. It is a couple of decades since I left the paid workforce yet my interest in the topic remains high on my personal agenda. My professional lifetime, including two decades as chief executive of the former Otago Council, has been centred upon the goal of better employment opportunities and sustainable regional development. In the past 20 years, there has been a spectacular change in our demographics in Otago and Southland. Residential population growth and employment for the two adjoining provinces has been concentrated in the Queenstown Lakes and Central Otago districts. A number of socioeconomic indicators provide substance for this claim. Queenstown itself is now certain to become the South Island’s first inland city, Wanaka is the fastest growing rural township in New Zealand, and Queenstown International Airport is the fastest growing terminal in Australasia. Adventure tourism and more recently specialist wine-growing and a growing array of leading cycle trails have all contributed to widespread topline advertising of the region’s undoubted popular natural scenery – sparkling blue glacial lakes and seasonally snow-capped distant mountains. This has led to it being the most concentrated region of highly-favoured “lifestyle settlements” in New Zealand. While the recent short-term recession resulted in a dramatic drop in new dwelling permits, there are once again many indicators of renewed rapid growth. It now seems very likely that the trend of transTasman migration will be reversed within the next decade. Returning settlers and other migrants from further abroad are going to be queuing up for a place in these southern parts – probably boosted by climate warming. The management gurus all have messages that are relevant to these contemporary trends. London Business School’s Lynda Gratton has made reference to a renaissance in craftsmanship. We already see this happening in these parts – the new contingent of settlers enjoy better health and are comfortably wealthy and independent. Many have fewer dependent family members. Most have at least some family members living permanently abroad but can enjoy regular contact with the aid of internet services such as Skype, as Peter Drucker predicted when he drew a parallel


Jolyon Manning, who has been a member of NZIM Southern for 33 years, and Enny Manning.

between the age of the internet and the spread of railway communication in five continents 150 years ago. Management is confronted with a remarkable range of new issues never envisaged but a few years ago. But some things remain the same. In the South Island we have access to an astonishing array of natural landscapes and a growing community of conservation-minded people determined to provide environmental safeguards that will only further enhance those seeking a life of quality. Jolendale Park Jolyon and Enny Manning have created Jolendale Park, near Alexandra. It is open to the public. Jolendale Park is located on a rather typical Otago schist rock landscape at the top end of Bridge Hill – about 100 metres above the Alexandra township. Manning had a lifetime interest in climate trends and possible climate change. Its more dramatic seasonal impacts are more clearly apparent in the semi-arid climate within this, the driest ecological district in New Zealand. Its thin soils had in earlier times been grossly devastated by fire and subsequent over-grazing by sheep and rabbits, and thus presented a very big challenge as an experimental tree-planting exercise in the long cycle of recovery which will take generations of careful stewardship. This was a treeless landscape interrupted by patches of very prickly briar rose, scabweed and thyme all adding up to a distinctive seasonal hue and fresh scent. Over the past five decades it has been transformed into a rather beautiful landscape with a wide variety of trees and their colourful foliage, irises and persistent lichen-coated rocks, mosses and toadstools. In the mid-70s, the Manning family offered to vest the park asset as a longer-term recreational amenity to the former Borough of Alexandra. It was not keen to take on permanent care and the property was accepted on similar terms by the Minister of Lands, with transfer in 25 years. The covenant has now been transferred to the Department of Conservation. In 2004 Jolendale Park was registered under permanent protection covenant to the QEII National Trust for Open Space as the sole registered “semi-arid woodland reserve” in New Zealand. Two years ago the park was gifted to a special purpose charitable trust for permanent administration and care.

Photo: Martin Wilkie

• Enable managers and aspiring managers to participate in learning programmes, mentoring, and events that provide the information and experience they need to develop their capability.


NN Management Aug/Sept 2013  

New ideas in management, leadership, incorporating Focus on Management & The Director on governance

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