SkyCity chairman Rob Campbell has provided a master-class in responding to the world of Covid-19. Photo / Supplied
COMMENT:
Prime Minister Jacinda Ardern and senior business figures need to wise up fast to the "front page test" when it comes to managing the optics around the Covid-19 crisis.
Week two into the lockdown, public tolerance is evaporating when it comes to cavalier "rule" breaches such as the one by Health Minister David Clark, who drove in his car to a mountain-biking trail using the weak excuse that he wanted to exercise in daylight between Zoom meetings.
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The first question should be, "how does Clark have time to go off exercising when he should be monitoring the Government's response to this health crisis?"
The Health Minister offered up an apology to Ardern.
But he hasn't apologised yet for his more egregious ministerial failure, which is his botched assurance that the ministry would provide personal protective equipment (masks, gloves and gowns) in time for frontline medical staffers to protect themselves as they dealt with the coronavirus threat.
Admittedly, Clark was relying on assurances from the Director-General of Health, Dr Ashley Bloomfield.
But it should not take letters and media appearances by medical staffers to alert the Government to the distributional failure. A Cabinet Minister on top of his game would be kicking the tyres on this.
Nor should it have taken an appearance by Dr David Skegg at the epidemic parliamentary select committee to ram home the critical importance of nailing the border down and actually quarantining and testing all incoming travellers, to stamp the virus out fast so we can all get back to work sooner.
Nor should outgoing Police Commissioner Mike Bush be let off the hook for the police failure to ensure that incoming travellers who had pledged to self-isolate were actually doing that.
Ardern flannelled when questioned on these issues. The questioning has become much more acute as more stories emerged — including on the plight of caregivers, who were finally allowed access to protective equipment after media pressure.
The Prime Minister has no need to over-reach.
She has brilliant communication skills. But the longer this crisis endures, the more she will be tested on the substance of the Government's response, and rightly so.
It is also important for business confidence that Ardern, her retinue of Cabinet ministers and the officials fronting the crisis step up their game.
It is obvious — to all but the wilfully blind — that she has placed too much confidence in official advice in three particular areas.
First, assurances that the Ministry of Health had sufficient supplies of personal protective equipment (PPE) — that is masks, gowns, eye protection — not just for frontline staff but also for New Zealanders returning to the workforce once the alert level 4 lockdown is over.
That is not the case. But fortuitously, New Zealand entrepreneurs have stepped up and sourced more from China.
Second, the porous nature of the border protection and the lack of insistent contact tracing. It makes no economic sense at all to effectively grind the NZ economy to a near-halt, at a multibillion-dollar cost, yet not match that with an upfront multimillion-dollar investment in stamping out the virus.
Third, the level of testing.
Ardern turned on National Leader Simon Bridges in Parliament when he earlier urged her to "test, test, test". This week she adopted the mantra.
Several weeks ago I wrote that Ardern should appoint someone like former Brigadier-General Martyn Dunne to take charge of an operational taskforce. Dunne is also a former chief executive of the Ministry of Primary Industries, where he dealt with the Mycoplasma bovis outbreak, and is former chief executive of the Customs Service.
Why Dunne? Because he would treat the pandemic as an invasive threat and apply defensive measures.
The front page test also applies to the business community.
Directors should be mindful that if they slash their companies' workforces and pay rates without taking a significant haircut to their fees, they break trust with their employees.
This week SkyCity Entertainment chairman Rob Campbell and CEO Graeme Stephens offered up a master-class in the right way to approach wage cuts and layoffs in this environment.
In a note to the NZX, Stephens said he and his leadership team had volunteered to take significant reductions in salary for the remainder of the 2020 financial year.
An employee hardship fund of around $1 million would be set up to initially assist those departing NZ employees who find themselves in financial difficulties that couldn't be fully addressed by their redundancy payments.
The executive cuts range from 20 per cent to 40 per cent of salary.
Importantly, Stephens, his chief financial officer and chief operating officer will take a salary cut of 40 per cent for the remainder of the financial year.
Campbell and his board — Sue Suckling, Murray Jordan, Jennifer Owen and Bruce Carter — will drop their own fees by 50 per cent for a similar period.
Yesterday, I tuned into a webinar which the Trans-Tasman Business Circle hosted with Palo Alto Networks chief executive Nikesh Arora and Sir John Key, who sits on Palo Alto's board.
Key was asked: "What is your view of the Fletcher Building position of the executive only taking a 15 per cent cut and up to 70 per cent for their employees?"
Key's response: he didn't know the ins and outs of Fletcher's position. (It is still evolving).
But one thing directors should take note of is that "front page test".