A former long-serving Pharmac board member involved in the appointment of chief executive Sarah Fitt has slammed the way the drug agency has handled the Rachel Smalley email saga, saying board members need to consider their own futures in the wake of how a toxic culture has developed.
Professor JensMueller, who served for more than nine years on the Pharmac board, told the Herald this morning he was saddened by events and suggested board members had lost sight of a culture that has built firewalls against stakeholders.
He says there has been “an enormous breach of trust”, which cannot be erased by “marginalising the past and [committing] to a better future”.
Professor Jens Mueller, former Pharmac board member and governance expert.
“They need to decide if they are competent directors,” said Mueller, a highly qualified governance expert and director of Massey Executive Development at Massey University.
“I am not sure a board member can say ‘we let this happen for years, we are the right person for the job’. If you have been this tone-deaf in the past, what makes you less tone-deaf in the future?”
He believes the public response this week from Pharmac chair Steve Maharey – in which Maharey said he had met senior Pharmac leaders to ensure there would be no repeat of derogatory emails – has been a “political” move rather than good governance.
One of her communications team told Fitt in an email that Smalley was an activist not a journalist, to which Fitt responded: “Yep agree, the good thing is that she has a terrible time slot [on Today FM] and not much of a following”.
Another senior staff member described a “nauseating” Smalley interview on her radio show, while another said she’s “gunna be out of a job” with the closure of Today FM. A third Pharmac staff member said Smalley would be “mega shitty” about not getting an interview with their CEO, while a fourth worker wrote a limerick about the broadcaster.
Rachel Smalley was the subject of a number of derogatory emails sent between Pharmac staff.
Mueller said Fitt had been appointed after a vigorous process in early 2018 and there was no question at the time she was a “good operator”.
He said Pharmac had a difficult role, riding a fine line “between drama and satisfaction” when it came to drug-funding decisions.
But with that came the requirement of careful governance including in the way it treated and communicated with stakeholders. It was a lot different from, for example, the transport agency making a decision on a stop sign.
Pharmac chair Steve Maharey, left, and CEO Sarah Fitt.
On Linkedin, Mueller said he was saddened by the situation.
“Not because this is about one person, it never is, but because this is about a process of how we make sure that toxic cultures are identified and then dealt with.
“A ‘soft touch’ approach of having a chat about what can be done to avoid this in the future – I believe is a ‘political’ answer, rather than good governance.
“You cannot make this enormous breach of trust go away by marginalising the past and [committing] to a better future.
“Talk is cheap, and we are well beyond the phase where a chat is decisive action here. We always look at the board of an organisation to see why they allowed such a culture to exist.
“It is never the resignation of one executive that creates impactful change, but it is the board that looks at itself and reviews whether it is fit for purpose.”
Pharmac was sent a list of specific questions after Mueller’s comments, but it refused to comment.
Pharmac chair Steve Maharey on Monday afternoon said he had met “face to face with the senior leadership team today and instructed them to identify actions that can be taken to prevent a situation like this from happening again”.
Maharey said he expected these actions to be presented at the next board meeting this month. “The full board will consider if the actions suitably address the matter.”
It is unclear whether Fitt was at the meeting virtually - an out-of-office email reveals she is on leave until October 24.
Mueller said a board could make decisions when it needed to. “If a board has to make a decision, they make a decision. No one waits for someone’s travel schedule.”
Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.
