Departing Ports of Auckland chief executive Tony Gibson. Photo / NZME
Departing Ports of Auckland chief executive Tony Gibson. Photo / NZME
OPINION:
June 30 will be a red letter day in the New Zealand port sector with the exits of the chief executives of two economic cornerstones: the Port of Tauranga and the Ports of Auckland.
The style of their departures could not be more different.
Auckland's Tony Gibson leaves inanger, blaming others for the public image his port presents of a dysfunctional, secretive and under-performing organisation that goes its own way, in its own time, and answers to no-one, least of all Auckland ratepayers.
Tauranga's Mark Cairns leaves buoyed by the warmth and goodwill of stakeholders, his farewell an event to which dozens of people are apparently prepared to travel to acknowledge a textbook example of leadership and value creation.
Gibson's farewell in comparison could be small beer judging by the icy public response of Auckland Mayor Phil Goff to his resignation. The mayor's statement on behalf of port owner Auckland Council barely mentioned Gibson, but noted "POAL plays a critical role in Auckland and New Zealand economy's supply chain and economy".
Both chief executives are long-serving. Gibson 10 years and Cairns coming up to 16. Their exit announcements were never going to be a complete surprise.
Unions have been calling for Gibson's head over the Auckland port's independently documented systemic health and safety failings.
Even the passive, hands-off Auckland Council shareholder had lost patience with a tsunami of bad news. Three people have died in port-related accidents, labour relations appear dismal, dividends to the city have shrunk, and a five-year project to automate the container terminal is still unfinished as shipping congestion continues to choke NZ Inc. Now a further delay has been revealed - by the Herald, not the port.
Notice of Gibson's exit was dropped into media newsrooms in the middle of a hugely busy Budget afternoon. It was a move in keeping with Gibson's willingness to leave talking about important port matters to a communications manager, now known in the sector as the port's "de facto CEO".
The port's chair Bill Osborne is also a shy one.
When business people talk about New Zealand's main import port - as they've been doing a lot lately - they inevitably zero in on this failure of its leaders to front up publicly.
For leaders of other major sector companies like Port of Tauranga and Mainfreight, fronting up is never optional - especially in difficult times.
They're listed on the stock exchange, so transparency with shareholders is the bottom line.
Not so with Ports of Auckland. Gibson is taking one for the team but it could be argued he is a symptom of the problems not the cause, and it's time the port's ownership structure changed to let in more sunlight.
Port of Tauranga chief executive Mark Cairns will leave at the end of June buoyed by the warmth and goodwill of stakeholders. Photo / NZME
As a wholly council-owned entity, there seems to have been minimal oversight on Ports of Auckland. It's taken a damning independent health and safety report and the automation debacle to highlight that. The port won't reveal the cost of the automation project. Sector insiders believe it could top $400m.
While the council maintains it can't interfere in operational matters because of the Port Companies Act, there's little evidence of robust questioning of its low return on equity, falling productivity and profitability, capital expenditure largesse and shrinking dividends to ratepayers.
Senior councillor Chris Darby has put it bluntly: "The council has been a lazy shareholder."
He's called for the Government to be given a stake. Other options could be a return to a full listing or for a mixed local authority-sharemarket listed ownership model like Tauranga's.
Meanwhile there's speculation the council - or more accurately Auckland ratepayers - could have to pay for the council's late awakening to the port's issues and subsequent drive to recruit a new board to fix them.
Gibson in his resignation announcement claimed the "difficult decision" had been prompted by "persistent and sometimes personal attacks" on him as chief executive. He felt this focus on him was damaging the company and his team, he said, and getting in the way of what they were trying to achieve, which was change.
There's speculation within the council and the sector that Gibson may make a bid for sizeable compensation.
