Andrea Fox: Auckland port needs new directors but who's willing to take the plunge?

The relationship between Auckland's port and the council remains strained. Photo / Michael Craig

OPINION:

The search is on for two new directors for the embattled Ports of Auckland - and by all accounts it's proving tough to find people to say yes.

With its productivity and shipping congestion issues, a prolonged, secretive but undoubtedly costly container terminal automation project yet to fire, disappointing financial results and dividends to Auckland ratepayers, the job carries little appeal, say sources familiar with the search.

There's also the fact the port company is wholly-owned by the Auckland Council, a business model not always admired in the commercial community.

Further, the relationship between the company and the council is strained. This is due to the port's performance and serious accidents, including two workplace deaths.

Auckland Mayor Phil Goff and councillors have called on the port to provide an independent review of the automation project once fully implemented, and Goff in December refused to express confidence in the leadership and senior management.

Another sign of strain is seen to be Goff's office heading the search for the two directors - possibly an uncomfortable situation for new port chairman Bill Osborne.

The memorandum of understanding between the council and the port says its the job of the board to commission a professional search for new director candidates.

It says the appointment process is to be between the board chair, mayor and council chief executive. When a vacancy occurs, the chair and mayor are to agree on the skills, knowledge and experience required for the appointment, with the board recommending its nomination to the mayor and council chief executive.

Three port company directors retired in the first six months of the 2021 financial year, including chair and long time director Liz Coutts. Bill Osborne, a director since 2017, was named acting chair, then chair this year.

The other two directors who stepped down were Jon Mayson, a former chief executive of the Port of Tauranga, and Karl Smith. They were replaced by Peter Chrisp, chief executive of NZ Trade and Enterprise, and lawyer Hazel Armstrong, a partner in a firm which specialises in health and safety issues.

Deputy chair Rodger Fisher, appointed in 2013, is retiring this month.

The result is now two board seats need to be filled.

With the port's issues so much in the public eye, and the debate over its future on prime Auckland CBD land igniting again, there are plenty of opinions on the necessary calibre of the new appointments.

Auckland Business Chamber chief executive Michael Barnett: "This is an opportunity for the council to make appointments that don't look like they are politically inspired but reflect the performance needs of the port and its customers.

"The port is a critical element of the supply chain for many businesses in New Zealand and needs to have people who understand the steps that need to be taken to give those businesses confidence that the port can support their activity as the economy recovers."

The freight forwarders sector, along with importers, exporters and retailers, has felt the brunt of the supply chain freight log jam and associated higher costs of the past six months, largely blamed on the Ports of Auckland's unpreparedness to handle a Covid-driven global upsurge in container shipping freight.

Rosemarie Dawson, executive director of the Customs Brokers and Freight Forwarders Federation of NZ, said the port board must ensure its directors have a strong logistics or supply chain background.

The board needed to undertake "a robust board skill matrix analysis and match that against the strategic plan to determine the skills required", she said.

Don Braid, managing director of New Zealand-based global logistics and transport company Mainfreight was blunt.

"(They need to be) business people vs the knitting club."

Mainfreight managing director Don Braid says the Ports of Auckland board needs business people. Photo / File

Experienced and respected company governors asked by the Herald to identify essential skills for a director of a large business like Ports of Auckland said solid governance experience and commercial experience were must-haves.

Candidates should have proven executive leadership and operating experience in a large and complex business, and financial capability.

Sector experience and a deep understanding of global import and export dynamics and customer management were needed to be able to challenge management on strategic initiatives. Experience in large capital project investment and an understanding of the risk involved were essential.

The ability to identify risk and question what happened if a project went wrong was an important attribute - in addition to the normal risk management skills directors were expected to have.

Going by the Ports of Auckland website profile, the current board looks light on sector experience.

• New chair Bill Osborne is a professional director with a strong rugby and sports pedigree and is on the board of Transpower. He held top executive positions at NZ Post and Quotable Value NZ and was the first chair of 2 Degrees Mobile and chair of CoreLogic NZ.

• Outgoing director Fisher had sector credentials as a former managing director of transport group Owens, former director of the Lyttelton Port, and former chairman of WEL Networks and Ultrafast Fibre and the Civil Aviation Authority.

• Andrew Bonner, on the board since 2009, is a former executive with Foster's Group, running the import arm of the business in Australia and was managing director of Foster's Group NZ and managing director and chairman of Foster's Group Pacific in Fiji. He's a professional director and a vineyard company specialist.

• Patrick Snedden, a director for nine years, is chair of the Auckland District Health Board and deputy chair of the Counties Manukau District Health Board. A former Treaty of Waitangi negotiator, he is a former chair of Housing NZ and a director of Auckland's Watercare.

• Sarah Haydon is an accountant who joined the port board in 2016 and chairs The Cooperative Bank and is deputy chair of the Institute of Geological and Nuclear Sciences. She previously chaired Cavalier Corporation and was a director of AsureQuality. She had executive roles with British Petroleum.