Time for change at the AECT

In 2009 I naively stood as an independent in the Auckland Energy Consumer Trust election. I thought the election would be about electing the best possible candidates to be Trustees.  I presumed there would be media coverage of the election issues, discussion of candidate policies and a fair chance of success if my skills and experience stacked up against what the other candidates had to offer.

Unfortunately (or fortunately- because if I had known I would never have bothered) I  had absolutely no idea that there was no chance that I would be elected because everything was stacked against me. I wrote about my experience here.

The incumbent C&R trustees had a very simple strategy:

  • pay the dividend of $320 just before election day
  • send out a letter to a database of 50,000 and put up hoardings claiming credit for the dividend payment

Then sit back and rely on no media coverage of the election and low voter turnout (less than 17% in 2009) to return them once again to a role that pays between $63,000 and $90,000 in fees. So of course they have taken exactly the same strategy for the 2012 election.

However things aren’t quite working out as planned – the dodgy practices of the AECT election are finally being exposed. Matt McCarten summed it up today here in the Herald on Sunday.

I’m supporting the YOUR POWER TEAM candidates. They have a range of well thought through policies that includes paying the dividend. They will bring long overdue fresh thinking to the role of trustees.

I want to see change at the AECT. I don’t think it is healthy for democracy for the incumbents to go unchallenged any longer.

Energising Vector’s culture and strategy through smarter governance

The AECT election has been largely ignored by the media which means very few voters are aware of the issues facing the largest publicly owned trust in New Zealand and the governance of New Zealand’s leading energy infrastructure company.

Brian Rudman is the only commentator to provide anything thought provoking about the issues, making the suggestion in the NZ Herald that voter apathy (currently only 15.73% have voted with only one day left) justified the eventual owners of the Trust, the councils of Auckland, Manukau and Papakura making a serious bid to bring forward the eventual transfer. As he pointed out the community could do a lot more with the $98 million dividend than have it spread out in $320 lots to 273,000 plus households in the Trust area.

The 16 candidates have been unchallenged on their views on a range of other issues such as undergrounding, the strategic direction of Vector, the roles of the Trustees, trustee fees, the regulatory relationship, the sale of Vector, energy pricing, energy efficiency.  Perhaps if the Trust had done more to advertise the election and the role of the Trustees, eligible voters would have demanded more information to inform their vote.

As a consequence of the minimal election coverage the governance of Vector has also escaped scrutiny. The Trust as majority shareholder of Vector needs to be satisfied that the right governance structure is in place.  Only John Collinge and his ticket of Just Power – No Politics has highlighted concerns about the current governance.

One area that raises concerns about the current Trustees oversight of Vector, on behalf of energy consumers, is the lack of a clear company strategy that is understood by all employees and a negative management culture that has stifled performance and innovation.  The Trust needs to know that Vector is delivering on its core functions as an infrastructure company. This calls for a number of tough questions by the Trustees. How well is Vector performing in terms of what customers want – the delivery of reliable and safe energy? Is there a crisis loaming due to under investment and lack of maintenance in key areas? Is there a priority on doing the job right rather than increasing dividends (out of debt) at the risk of reliability and safety? Why is business as usual at Vector about handling a higher volume of power – has this has become the de facto strategy? What is the future direction that will maximise new initiatives and opportunities?

The company strategy should be clear and simple, providing the foundation for a healthy, productive and innovative business with highly engaged staff with a clear sense of purpose and healthy morale. Unfortunately there are indications that the culture at Vector has allowed a breakdown in the trust and respect at all levels of the organisation from the executive and Board down. The Trust needs to consider whether the positive flow of respect and strategic alignment at Vector has gone wrong and whether this means the company is not working as well as it could.  The Trust has the ability to influence the strategic direction of Vector and the management culture through the appointment of directors to the Board including two of the Trustees.

The current Vector management needs to stop hiding behind being a monopoly private sector company to acknowledge its place in the community providing an essential service. This will only happen once the Trustees are willing to step up into their role and demand much more from the governance of the company.