Clearing the decks at Mighty River

Instead of having to fight a rearguard action and defending its directors, boards appear to be moving pre-emptively to improve their attractiveness to investors.

As reported in Friday's "new-look" National Business Review, activist institutions wielding lists of blacklisted directors are prompting nervous companies to clear their decks before attempting capital raisings.

A flurry of board changes at Snakk Media, which plans to seek a compliance listing on the NZX alternative market, have all the hallmarks of this, as it cuts ties with directors and shareholders associated with controversial company SeaDragon, a major Snakk shareholder.

Maybe the resignation of Mighty River Power director Jon Hartley, who will step down later this month, is the start of a similar process at the state-owned enterprise, which is first on the block for partial sale in the government's stuttering mixed ownership model.

Mr Hartley is a former chief executive of Brierley Investments, who left in 1999 after the rationalisation of the group's New Zealand's assets. He jumped ship to loss-making state-owned enterprise Solid Energy and left shortly after, following a strategic review.

He went on to chair Sky City Entertainment Group, now SkyCity, and joined Pacific Road Corporate Finance as a director.

He is currently a director of ASB Bank, Chorus and Sovereign Assurance Company.

High regard

There's no suggestion Mr Hartley is on any directors' blacklist.

He says he has commitments with World Vision International and its micro-finance subsidiary, VisionFund International, of which he is vice-chairman.

Mighty River chairwoman Joan Withers says Mr Hartley is held in high regard by the board and the company, and has gained from his experience and contribution over his three years at the board table.

Yet you can't help wondering about the timing – just a few months before an expected IPO.

As mentioned in the NBR print edition, Mighty River directors Ms Withers and Trevor Janes once sat on the boards of failed carpet-maker Feltex and finance company Capital + Merchant, respectively.

One wonders if they might be checking their busy schedules over the coming months.

One veteran Auckland businessman tells NBR ONLINE Ms Withers and Mr Janes are both "very solid" but Mighty River will be moving before any IPO to deal with any perceived board weakness.

Some years ago, Chris Swasbrook, a member of the NZX's prospectus watchdog committee, called for directors who served on the boards of collapsed finance companies to be banned from the boards of listed companies.

NBR ONLINE attempted to contact Mr Hartley but he is travelling in Myanmar.

dwilliams@nbr.co.nz