Row erupts as board backs candidates for Southern Cross

Jane Arnott says she wants a fair go from the board.

An election row has broken out at health insurer Southern Cross over the board endorsing three of the four candidates.

Three of the seven board seats at Southern Cross Medical Care Society, the group's health insurance arm, are up for election at the society's annual meeting on November 26.

Southern Cross is New Zealand's largest health insurer, with 840,000 members. Around 640,000 are old enough to vote at the meeting or appoint a proxy to vote on their behalf.

The society's directors are also appointed to the trust that oversees the other arm of Southern Cross - its hospitals and its travel insurer.

On the voting and proxy papers posted to members, the board has expressed its support for three existing directors - but not for Jane Arnott, who is making her third attempt to join the board. The papers list her under the heading "other candidates".

Ms Arnott, of Christchurch, is the New Zealand country manager of a British audit and assessment company.

She acknowledges that the board's action reflects the approach of large corporations, but said this was out of line for the health insurer, a not-for-profit friendly society.

"It's irregular. The membership should be allowed to make up their own mind."

She was happy for the board to express its support for selected candidates, but said this should not extend to the voting and proxy form, which "should be clean".

Ms Arnott, who stood unsuccessfully for the board in 2005 and 2006, said she had received many emails from society members who were surprised or horrified by the board's actions. A growing number were "finding fault with what they see as bias in the voting papers".

"In summary, I'd like a fair go," she said.

Board chairman Graeme Hawkins said it had acted in line with director elections at other large businesses including Telecom, ANZ and Fisher & Paykel. Commercial elections were different from political elections, a distinction Ms Arnott seemed not to have drawn.

Between the society's annual meetings, the board controls any appointments of directors, who are then put forward for election by all voting members at the next annual meeting.

Two directors must retire at each annual meeting, but they can choose to stand for re-election.

Mr Hawkins said the three board-endorsed candidates for this month's annual meeting, Dr Douglas Baird, Carole Durbin and Liz Hickey, were originally appointed following a rigorous selection process.

"They are known to have skills and experience that the board believes will complement those of other board members, enabling them to make significant contributions to the governance of the society."

Mr Hawkins said Ms Arnott might be well qualified for a Southern Cross directorship, but she had not been tested by the board's recruitment process.

"It is not that the board opposes Ms Arnott's candidacy, but rather that the board is not in a position to support it."

Another factor was that many members typically made the chairman their proxy and left him to decide which candidates to support.

The board wanted to make it clear to members how these "undirected proxies" would be used.