Editorial: Board games

OPINION: By raising questions about city councillors who are augmenting their council pay with fees from directorships on city corporate entities, the mayoral aspirant Jim Anderton was undoubtedly seeking to exploit the politics of envy to embarrass his political opponents.

In Christchurch, where the average income is in the low $30,000s, and with councillors able to earn up to $52,000 from such positions on top of their regular council salaries of about $84,000, that is not hard to do.

A couple of councillors aligned with Anderton, who until now have presumably been happy enough to take their fees, have suddenly declared they can do without them, but the rest wish to keep them. In publicising the matter at this time  because it is hardly a new situation  Anderton plainly hopes he can put political pressure on the latter group to give the fees up. Some no doubt feel that Anderton, who is a relatively rich man and has entitlements as a member of Parliament that leave theirs in the shade, is hardly one to be preaching on the subject. But beyond the cheap political point-scoring, the question raises serious issues that bear examination.

There was a time, not many decades ago, when being a councillor, and indeed mayor, was a part-time job and was paid accordingly. But the mayor and councillors are now assumed to be working on council business virtually fulltime and the pay they receive is meant to reflect that. As the councillors see it, the directorships on council companies that they undertake is in addition to their work on the council and is paid extra accordingly.

The council undoubtedly needs good directors on the entities it controls. One of them, Christchurch City Holdings Ltd, for instance, is a $2.2 billion company, which contributes large dividends to the council. CCHL is the investment arm of the council, holding shares in seven trading companies that run some of the key infrastructure of the city, including electricity delivery, the port of Lyttelton, the Christchurch International Airport, and one of the city's bus lines.

Companies of this importance must have sound and competent governance, with directors who have the appropriate skills. The selection process the council uses seems to ensure that any councillors asked to be directors meet those requirements. However, the question needs to be asked whether councillors need to be on boards of council-owned companies at all  or whether there are other suitably qualified candidates, whose selection might avoid the perception that some councillors are simply doing well out of a council perk.

The job carries serious responsibilities and needs time and diligence to be done properly. If councillors are to do it in addition to their other council duties then it is appropriate that they be paid for it. If, on the other hand, directorships are to be made part of councillors' regular duties then presumably those who do it will not be available for council work. Given the size of the council nowadays  more or less a minimum to get its work done  that would hardly be an ideal solution.

- © Fairfax NZ News

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