Sir Ron takes leave from board

Press, 25 August 1988, Page 1

Sir Ron takes leave from board

By

BRENDON BURNS,

political reporter

Sir Ron Brierley has taken leave as chairman and a board member of the Bank of New Zealand.

He is not pleased at having been required to do so by a Government directive. He told “The Press” from Syndey last evening that he saw no conflict of interest between his chairmanship and the possible purchase of the bank by Brierley Investments,. Ltd. The Minister of Finance, Mr Douglas, and the Minister for State-Owned Enterprises, Mr Prebble, sent on Tuesday a directive to all S.O.E. chairmen. It said that to avoid any conflict of interest all S.O.E. directors associated with companies who may be “actual or potential” buyers of the S.O.E. must resign or take leave from the board. Sir Ron said the Bank of New Zealand board met yesterday in Wellington and discussed the directive. He was informed in Sydney of the discussions. The issue of resigning or taking leave from the board was a personal decision for each director. Whether the requirement was fair was a difficult question, said Sir Ron. “I can understand the reasons for the request. “I think in the New Zealand context it has probably some undesirable consequences in practice.” He did not believe S.O.E. directors should be required to stand down when companies they were involved with were

potential buyers. “It is not the bank or the directors selling shares; it is the Government as shareholder.” Private consultants and the Treasury were assessing bids to buy BNZ, not the board.

“To that extent it has nothing to do with the bank.” The issue of directors remaining on the board might change once a successful bid was announced, said Sir Ron.

“At this stage, I don’t think that the board of the Bank of New Zealand has a very strong role to play.” Sir Ron said he could understand the public’s perception of him as having a conflict of interest by being chairman of BNZ and chairman of Brierley Investments, Ltd, which might

bid for bank shares. "I don’t personally see a conflict.” Asked whether he had access to more information about BNZ than other bidders, Sir Ron said, “That presumes that I am improperly disclosing that information.” He said he would not disclose such information to his company. "They would have to proceed on the basis of making their own independent decision on that.”; His own knowledge of BNZ would be surpassed by “diligent” analysis by BIL. “Writing cheques for a $1 billion plus requires more information than I have.” Sir Ron said it had not been necessary for him to be involved in his company’s consideration of whether to bid for the bank.

“It is really a decision which is being made at managerial level by Paul Collins.” (BlL’s chief executive in Wellington.) The question of conflicts of interest had been around since he joined the board, said Sir Ron. He became chairman last year after appointment to the board by the Labour Government in 1984.

The Opposition has repeatedly criticised the Government for lack of any mechanism to control potential conflicts of interest, until Tuesday’s directive. “I must say I have not been terribly impressed by the contribution from that source on the whole question of the S.O.E. process,” said Sir Ron. The Opposition spokesman on S.O.E.S, Mr lan McLean, claimed yesterday that the directive was a victory for himself and his colleagues.