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    Has the time to hold local councils accountable arrived??

    Governance Leadership Management Performance Societal Wellbeing
    I am on record as being a critic of the way local councils often go about their business. Councils were established to provide common/shared infrastructure to support the growth of towns and cities, and to set some rules (bylaws) around the operation of infrastructure. However, many councils have claimed a greater remit over the years, with attempts to drive economic development (what do councils know about business?), sister city programmes and so forth. Yet few of these schemes have delivered much to ratepayers except cost. I have a sense that local councils have lost sight of their "core business", and that the mayor and the council (ie. the chairman and the board) have lost sight of their role in many cases.

    However, things may be starting to change. The problems with the issuing of building permits and the maintenance of appropriate standards of construction provide a case in point. The Christchurch City Council lost the right to issue building permits because it was doing such a poor job. Now, the judicial system has ruled that affected parties can bring a case against Auckland City Council in respect of poor construction standards (the so-called leaky building problem). I applaud these decisions. Hopefully, they will cause Mayors and Councils to take their core roles more seriously, and hold their CEOs to account for performance more directly. That will be a good thing, for ratepayers and citizens alike.
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    Former directors cut a deal, without admitting liability

    Governance Leadership Management Performance Societal Wellbeing
    The former directors of failed finance company Strategic Finance have successfully negotiated a deal that sees them avoid civil or crown action against them, so long as they uphold some binding commitments made as part of the deal. The $22m settlement sees the directors avoid further court action in return for making a significant payment and promising not to act as a director, CEO, CFO or promoter of a public issuer for several years.

    The deal was made with the Financial Markets Authority and the Strategic Finance receiver, PwC. Interestingly, the fine print includes a line "without the regulator's approval", which suggests that any of the directors could, if they wish, mount a case to obtain permission to act in one of the roles for which they are now disqualified. 

    This is an interesting outcome. It enables the directors to avoid any form of conviction or detention. In effect, they are free to carry on their lives, albeit within the constraints of not performing certain roles. I doubt that would be too much of an inconvenience for the gentlemen concerned. However the investors lose 85–95 cents of every dollar they invested. The sounds like a deal in which there are a few winners (the directors) and many losers (the investors). I understand the deal has been done, but how fair is this type of outcome?
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    CEO salaries are supposedly out of control. So what?

    Governance Leadership Performance Societal Wellbeing
    A blog entry on the Reuters page today makes interesting reading. "Supersize" CEO salaries have caught the attention of legislators, in California at least, with proposals to apply a punitive tax regime. It seems some people have had enough, or is this a case of a legislature seeing a revenue gathering opportunity?

    CEO salaries have been steadily climbing ahead of inflation and most other economic measures for years, particularly so in the US in the last decade. Market forces seem to have been at work, whereby reputations are on the line, and boards have offered increasingly large deals, to attract new CEOs and to retain good ones. No doubt some high-performing CEOs have seen this and demanded big numbers as well. For example, Mark Adamson, CEO of Fletcher Building, seems to be demanding more. Not all CEOs have the same outlook however. In the same article, Mark Powell, CEO of The Warehouse, a very successful retailer in New Zealand, seems to be somewhat embarrassed by his salary package.

    The topic of supersize salaries is an easy target for journalists, mates having a drink, the unions, and others. However, when all is said and done, does it actually matter? If a company is socially responsible and the CEO is creating considerable shareholder value, then probably not. However, if the company is flagrantly abusing its staff, suppliers or customers, then it probably does matter. My preference is to let the invisible hand of market forces determine the outcome. If a gross imbalance or inequity occurs, a correction will follow, sooner or later. Hopefully it won't be so late that the society collapses though.
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    On ego, knowledge and effective governance

    Governance Leadership Management Performance Research Societal Wellbeing Strategy
    Do people that promote themselves heavily—by describing themselves in glowing terms; providing long introductions; and, embellishing their accomplishments—annoy you? People that behave like this are relatively easy to spot. They are often quite loud, and their large egos generally signal their presence.

    Interestingly, a recently published article has suggested an inverse relationship between ego and knowledge—which suggests that those with large egos have little to contribute. This is somewhat alarming, as many corporate disasters over the last forty years can be traced back to failures of governance, fuelled by hubris and overactive egos. Just how knowledgeable were the directors in these cases? The message in the article is relevant for everyone in the business community, particularly those directors that see themselves as being above the law and beyond any form of accountability. How long will it take, and how many more lives will be lost, before someone takes a stand?
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    Going above and beyond

    Societal Wellbeing
    I've just had one of those airline experiences that folk talk about at dinner parties: a story of a flight delay, a re-routed connection and some missing bags. Yesterday, I was en route from Fargo North Dakota to San Francisco via Denver, to meet an Air New Zealand flight home. However on arrival in Denver, news of a three hour delay on the DEN–SFO sector came through, meaning I would miss the SFO–AKL flight. 

    Not to worry (#1) though. I asked at the United Club counter for help. Even though my domestic US and international sectors were on completely different bookings, United Airlines and Air New Zealand worked together to re-route me through Los Angeles to meet an alternate flight home. The agents, Dimitros at United and Alison at Air New Zealand, were tremendous. They went above and beyond. After sorting me out, United entered instructions to divert my bags to follow me on the new route. I then discovered that my  DEN–LAX ticket had been upgraded to first class as compensation. Thank you Dimitros! The flight down to Los Angeles was very pleasant, as was the overnight flight LAX–AKL. However, on arrival in Auckland I discovered my bags hadn't been diverted as hoped—they were in San Francisco per the original schedule.

    Not to worry (#2) though. The baggage people in Auckland called me over and explained the situation. They told me my bags would be on the next flight and that they would be delivered by taxi to my home! The baggage problem was not of Air New Zealand's making, yet they stepped in to provide a solution, at no cost to me. Wow, that's what I call going above and beyond. Thank you Air New Zealand! 

    The bottom line(s)? Delays happen. Schedules get changed. Bags get lost from time to time. There is no point getting hot under the collar. Stuff happens. The response is what makes the difference. The description above is exactly the sort of experience that makes one loyal, in my case to both Air New Zealand and the Star Alliance network. Thank you to everyone concerned.