Seeking the New Grady #Delta

(try to ignore that sick feeling)

https://www.seek.co.nz/job/32939468

delta-ceo-seek-co-nz-job-32939468

Advt also at Otago Daily Times, Saturday, 4 Feb 2017
(Employment, page 51)

Posted by Elizabeth Kerr

This post is offered in the public interest.

Advertisements

36 Comments

Filed under Aurora Energy, Business, DCC, DCHL, DCTL, Delta, Dunedin, Economics, Electricity, Finance, Geography, Health, Infrastructure, New Zealand, People, Pet projects, Politics, Project management, Property, Public interest, Resource management, Travesty, What stadium

36 responses to “Seeking the New Grady #Delta

  1. Gurglars

    Politically astute leader.

    A pseudonym for required is a forgetter extraordinaire because we don’t want to expose previous stupidities and mismanagement particularly from S McLachlan, Cull de Mayor, Graeme “we’re alright” Crombie, Grady Cameron, and a host of others.

  2. Calvin Oaten

    Who writes this stuff? “A person initially comfortable in dealing with a “fluid environment”. Sheesh! Why not be honest and say “It’s broke, there is no money and the infrastructures are poked. Also, the fact of the great rush to the exits by trained staff is not mentioned. Wonder why? That of course is only Delta’s side of the equation. When we get to Aurora then the language will be unworldly. It will require the wisdom of Solomon just to write the job brief. Notice also that there is no mention of being “screwed” by the Directors, a bunch of playboy accountants and lawyers. If Sheffield can separate the wide boys from the genuine talent (assuming any of that category bother to apply) then they will deserve a mention in the greater good section of whatever goes for that sort of thingy nowadays. I for one am not optimistic on this search at all.

  3. Hype O'Thermia

    Calvin: “A person initially comfortable in dealing with a “fluid environment” is another way of saying, This organisation has woken up to the fact it’s up the creek without a paddle, you OK with that?

  4. Elizabeth

    Given the expected separation of the two companies Aurora and Delta along with their boards, it was slightly weird to read the reference to “sister company Aurora” – surely whoever wrote this advt doesn’t expect Delta to win all or any new maintenance contracts from the estranged, super-damaged ‘brother’ lines company (!!) going forward….

    Have to hope market competition stops the current Aurora/Delta contract stranglehold and enables good Delta staff some other employment options, overseen with fair and reasonable executive management – allowing some confidence to build, together with retraining in best practice safety management.

    Is it even possible to rebuild Delta with a new CEO ?

    • Nick

      The only way to rebuild Aurora and Delta is to sell Delta.
      We are pretending nothing if we believe that a ‘separate’ tier of directors and management will achieve anything, while both Aurora and Delta are part of DCHL.

      It’s a cosy club of ‘can do no wrong’. And unfortunately, they can’t do much that’s right either.

      Aurora must have access to genuinely separate and independent lines network contractors who will provide services and materials that have been competitively tendered for. These contractors are already out there. Network Electrical Services based out of Invercargill are a brilliant company to employ, and their skills are sought by other lines networks all over NZ.
      Grady Cameron has already used them as a subcontractor to Delta.

  5. Rob Hamlin

    This from Investopedia:

    “What is the difference between a subsidiary and a sister company?

    A subsidiary functions as a separate legal entity rather than as a division of the parent company. A subsidiary company is sometimes referred to as a daughter company. A subsidiary company is also capable of having controlling interest in its own set of subsidiary companies.

    Advantages for companies in having operational control over a subsidiary company include the right of the parent company to file a consolidated tax return. This type of corporate tax return offers more simplified filing for both the parent company and its subsidiaries, and it also offers tax benefits not otherwise available to the parent company. Consolidated tax filing offers the parent company the ability to offset gains and losses between different subsidiaries to lower the company’s overall taxable revenue.

    Sister companies are subsidiary companies that are related by virtue of being owned by the same parent company. Each sister company is independent of the other sister companies, and the only relationship between them may be their common relationship to the parent company. Sister companies may produce a range of products that are quite different from each other or from those of the parent company. Sister companies may even be competitors, in some instances. However, there are sometimes arrangements between sister companies for information sharing or special pricing. In instances where sister companies have a common target market, the companies can reap the benefits of reduced costs from sharing marketing and advertising materials.”

    http://www.investopedia.com/ask/answers/031915/what-difference-between-subsidiary-and-sister-company.asp

    There you have it. No requirement to buy and sell goods and services between sisters. So yes, it appears to be a strange expectation that the Aurora contracts will continue.

    Given Aurora’s position, any CEO of Aurora would be wise to require, as a written pre-condition of employment, the liberty, without Board interference, to form maintenance and other contracts with whoever delivers the best job and the best value for Aurora, and the chances are this won’t be Delta. Or the CEO may choose (shock horror) to take key processes ‘in house’.

    Similarly no sane CEO would take either job on (but particularly Aurora) without a written undertaking that neither dividends nor subvention payments, nor any clever ‘equivalent contractual arrangements’ that have the effect of extracting money from Aurora would be requested by the Board(s) before the CEO formally declared themselves satisfied in the relevant annual report that the existing electricity distribution infrastructure was in proper order, and that all potential liabilities were identified, quantified, controllable and clearly declared on the balance sheet or its notes.

    They might also be wise to include the agreed expectation based on the current state of the balance sheet and the network that achieving this would take at least a decade of 100% cash flow reinvestment – and possibly longer.

    Ditto they need to acquire, in writing and before taking the position on, the specific right to veto without prejudice Board requests to ‘grow the company’ into new areas and new business relationships (eg Queenstown, Christchurch and Wanaka speculative property development funding ‘opportunities’) that in the CEO’s view do not offer reliably positive outcomes for the company, or are clearly not a fit with its skills and asset base and surplus capacity (of which last of course there is none – both now and for a long while to come).

    These are unusual demands, which would give the incoming CEO commissioner-like powers and that would effectively emasculate the Boards, but this is an unusual situation. If either of these companies were mainstream stand-alone commercial entities, the chances are that they would already be out of their Boards’ hands and in those of the Receiver, or more likely the Liquidator.

    In the case of Aurora this remarkable feat has been achieved by its Board over a long time period and in the face of rising and highly predictable revenues, and an equally predictable and smaller maintenance and growth investment obligation. They cannot blame DCC and DCHL ‘pressures’ for this extraordinary outcome. As Company Boards they have the rights to resist such pressures that I am recommending that the CEO demands for themselves. It is these powers that form one of the key justifications for having these assets held by stand-alone companies rather than by directly by Council. They have, for some reason, apparently chosen not to exercise the very powers that justify their existence.

    The comments above really only apply to Aurora, and any person applying for that CEO’s job. I cannot for the life of me see why anybody who was interested in doing a good job of running a viable company would want the Delta position under absolutely any terms or conditions, including those above. It’s a job that’s more suited to the skills, mindset and board-busting powers of a receiver/liquidator.

  6. Calvin Oaten

    Hurrah!! Rob Hamlin for the Aurora CEO position. If appointed, with the above caveats, the citizens might just be saved, over a decade or three. Question, why on earth would he apply whilst there was a hint of the Directorship being within the powers of the same men? Answer. The last I heard Rob was on his way to the other side of the planet.

    • Elizabeth

      C’mon Calvin, no one would wish that job on a colleague in a month of Sundays who wasn’t already vastly experienced in lines industry engineering and project management. That is the whole point and which Richard Healey and Jarrod Stewart have been at pains to point out publicly in the last months. And remember that Delta is able to work efficiently and profitably well for other lines companies (and does) which have good governance and executive management in place, unlike the incestuous ‘brother’* company Aurora.

      *Not an accounting term as used here; a reference to the ‘good old boys’ – why taint the sisters !! Although there are brother-sister corporations by definition, a matter of ownership.

      [Brother-Sister Corporations. A brother-sister controlled group may exist if two or more corporations are owned by five or fewer persons (individuals, estates, or trusts). Brother-sister status will apply if such a shareholder group meets a 50 percent total ownership test and a 50 percent identical (common) ownership test. Link]

  7. JimmyJones

    Rob Hamlin wrote: They cannot blame DCC and DCHL ‘pressures’ for this extraordinary outcome. As Company Boards they have the rights to resist such pressures that I am recommending that the CEO demands for themselves. I agree – and so does the Deloitte Review Report. It says (page 5): The board has communicated their concerns to DCHL over a number of years, in respect of the aged network, the need to invest in a renewal programme and the implications this is likely to have on short term shareholder returns. However, we do not believe this was done in a robust enough manner~.

    From this (and other comments), these directors appear fully aware of what was happening, but felt completely powerless to make the proper choices. Not only did they (and the CEO) have the right to resist shareholder demands for a destructive level of dividends, they had the duty and OBLIGATION to do so. They were also required to comply with the health and safety legislation, but seem to have not done so.

    The Question is: why are these people still here, pretending to make decisions? The other question is, how have things become so fucked-up that the wishes of the DCC are given top priority over all other considerations – such as the safety of their workers, the safety of the citizens, the financial survival of Aurora, their obligations to the Commerce Commission and Worksafe as well as various legal requirements. Blind obedience to their shareholder is a trait to be avoided for any company director. I think that this dysfunctional behaviour is the result of a seriously dysfunctional chain of command involving the DCC, DCHL and the subsidiary companies. The current structure was deliberately created to be this way.

  8. JimmyJones

    The odd thing about DCHL is that it doesn’t exist in any practical sense. The subsidiary companies exist, but the holding company is little more than a legal entity. It has no CEO and no employees. Its finances are completely administered by the DCC. All it is, are the directors who sometimes have meetings and the chairman who is displayed as the public face of DCHL. Normally we would expect the DCHL board to make decisions, but there is no sign of any decision-making which is independent of the DCC management.

    The fundamental structural problem is that there is no CEO. The effect of this is that the DCC Group Chief Financial Officer (GCFO) has unmoderated influence on the subsidiaries because he can give instructions to either the boards of the subsidiaries or directly to the CEOs. This amounts to Direct Rule from the DCC management. When we hear that DCHL did this, or did that, it was actually the DCC in the guise of DCHL. This arrangement is only possible because the DCHL chairman and directors choose to accept all decisions from the DCC and thereby ignore their obligations to their company.

    The worst aspect of this Direct Rule structure is that the DCC is very bad at making decisions for DCHL. The decision for the DCC to spend all of the money needed for Aurora’s poles and equipment renewals is one example. DCHL needs a CEO and a new board prepared to work for the best interests of DCHL (not the DCC). The GCFO position was the method of implementing this dysfunctional structure and it needs to go, as does the attitude of the DCC management that created this problem.

    • Elizabeth

      Interested readers might like to refer to the pitiful official information supplied by DCC (belatedly) on 28.2.17 – the subject of a complaint to be lodged with the Ombudsman shortly, copied at https://dunedinstadium.wordpress.com/2017/02/26/no-news-appointment-of-group-cfo/#comment-80183

    • Nick

      I think Jimmy that you will find that the DCHL certainly does ‘exist’.
      With the exit of McLauchlan, the old network connections in the city have been quietly renewed.
      Keith Cooper (ex Silver Fern Farms CEO) is an ‘appointed director’ (perhaps ‘annointed’ might be more apt) of DCHL and a director of DCC Treasury Ltd .And just for good measure, he also is chairman of Otago Rugby Football Union.
      The old links are all still well and truly fixed between ratepayers and rugby, with a few thousand rotten power poles holding up the wires that we know are the cash conduit to the Stadium.

      • Elizabeth

        I agree Nick. And senior DCC will tell you that DCHL’s Crombie (now with Cooper) is actually in control of DCC. This has been the case for quite some time. The role of the GCFO was interesting in light of this. But remember how DCC was pushed by Crombie & Co to sign over a multimillion-dollar ‘loan’ to Delta on 1 August 2016…. which was actually a joint venture investment in Yaldhurst. The Council rolled over dead without any due diligence.
        Behind scenes we also have RT’s friends Graham Crombie, Kathy Grant and the so-called ‘independent’ chair of DCC Audit and Risk Subcommittee Susie Johnstone exerting influence over DCC. Nothing is quite as it seems.

        • JimmyJones

          Elizabeth: I think Crombie is a puppet. “Nothing is quite as it seems” – and this applies to your senior DCC informant. The motivation of our informants is the same as what motivates them to evade, delay, obstruct and mislead when it comes to responding to Official Information Requests.

          Was the DCC pushed by Crombie & Co to sign over a multimillion-dollar ‘loan’ to Delta, or was it the Council being manipulated by DCC management with the support of the DCHL representative? I think you underestimate the influence of the DCC management. Remember that DCHL has no resources, no lawyers, no accountants, no planning staff, no staff at all and no office. Everything is done by the DCC.

        • Elizabeth

          There is not just one informant. Crombie is not acting solely for DCHL is how I will phrase it here.

          Perhaps who you refer to as DCC management needs examination on or off line.

          Perhaps we are talking at cross purposes.

      • JimmyJones

        Nick: DCHL certainly does exist in the company register, but the question is whether it is capable of decision-making that is independent of their shareholder. You mention the network, the old and new connections: this seems to explain the dependable obedience of the DCHL board.

  9. Hype O'Thermia

    Reading this / listening to radio on upcoming general election, the hopes that Jacinda Ardern will bring “younger” voters to involvement [in the charade, is my “thinks” bubble] I wonder how long how many of us will keep on trying.
    I used to write and personally present submissions. A few councillors, presumably rostered on for the Let The People Participate occupational therapy sessions, sat through the day’s presentation, some even asked a question relevant – they had managed to stay awake. End result though? You know. Bev and Elizabeth have the patience and persistence to put a big dog up’em with official requests that cannot be ignored indefinitely. Otherwise the show goes on as usual, clown(s) to distract attention while Hercules the strong man changes into Bearded Lady outfit and the juggler-magician who makes audience’s money disappear reappears in spangles as Delicia the Tightrope Temptress.
    Voters/ratepayers benefit from this. Thanks to the trickle-down effect, some of them secure a couple of days’ pay and all the elephant dung they can eat.

    • Elizabeth

      The red lipsticked Adern is another MacTavish. Enough said. Labour has lost it altogether.

      • Homme in the street

        It’s just that any party wanting to attract the utterly disenchanted youth vote can’t afford to rely on the time honoured practice of putting up old white men. Ardern is a Socialist. It’s a start.

        • Elizabeth

          Who says we want the youth vote anyway. Or the socialist vote. Then too, considerations towards lowering the voting age to 16 are totally abhorrent. Given the immaturity and uneducated barely out of nappies state of most NZ youth (don’t mention the dreadful school curriculum) – another fatal mistake in the offing for any hope of achieving responsible government in this country.

  10. Hype O'Thermia

    At 16 people are deemed adult enough to reproduce.
    Two years earlier, at 14, they were deemed mature enough to be left at home without an adult.
    Voting at 16? Another sudden jump in maturity from not being fit to leave at home while parent(s) go to R18 movie.

  11. Interested bystander

    What astonishes me is why they are recruiting and presumably appointing a new CEO ahead of the split of boards, surely a newly minted board would appreciate a say; there is nothing worse as a new director than inheriting a CEO who isn’t in line with the board’s approach, this creates a real risk of subsequently resignation and readvertising.

  12. Rob Hamlin

    My inquiries suggest that there is absolutely no chance of a newly minted board arriving at any of these companies anytime soon. Instead the base alloy that currently exists will be melted down, rearranged, divided into two parts and further base alloy (acquired from the same local base alloy mine) added to bring the two ‘new’ parts up to a legally acceptable size before they are resolidified. These two parts will then be overstruck with the words ‘newly minted board’, arranged around an imperial profile of Dave Cull’s fizzog.. They will then both be highly polished with a PR buffer before presentation to the plebs..

  13. Rob Hamlin

    Further to this. This LGOIMA was sent in on the official DCC form today. I will publish the response to it (if any) here, when/if it arrives.

    Dear Sir,

    REQUEST FOR INFORMATION CONCERNING DIRECTORS POSITIONS AT AURORA AND DELTA

    The current situation at Delta and Aurora raises the possibility of new directors being required for both companies. Can you tell me if any recorded or formal process/policy for appointing such directors exists within DCHL?

    If no records of any such process exists, can you confirm this fact. If it does exist, can you send me either the full description/documentation or the details below:

    1) Directorial terms of reference/numbers of directors/initiation of
    appointment process
    2) Advertising, search and recruitment of candidate pool
    3) Shortlisting/selection authorities and procedures?
    4) Code of conduct and related procedures/sanctions

    Detailed Information for both the subsidiary companies above and the DCHL board itself would be most welcome.

    I would be most surprised if no formal recorded directorial appointment process/policy exists for these large entities that control massive publicly owned assets. Ditto terms of reference and code of conduct. After all, given the scale and importance of the assets that these companies control, it makes sense to have a process that allows the widest possible pool of directorial talent to be accessed and reviewed in its entirety in a logical and unbiased manner by those who are formally empowered to make such critical governance appointments. The Institute of Directors provides quite precise recommendations for this with regard to companies, and you would need a good reason to depart from these sensible suggestions.

    If, astonishingly, this was not the case within DCHL, one might expect to end up with an over representation of self-appointing, well-connected but self-interested Dunedin based lawyers, accountants and similar ‘business worthies’ with the odd ‘generic’ but connected director from further afield – wouldn’t one? That would be terrible if it happened, as there might be a possibility that these public assets would not be managed to the benefit of their true owners – which would be absolutely dreadful!

    I would be particularly sceptical of any refusal to supply this information under the LGOIMA that is based on prejudicing either company’s commercial position, or their capacity to carry on business or any privacy issues. I am not asking for personal information, and I am not asking for any commercially sensitive material.

    Yours faithfully,

    Dr. Robert Hamlin

    • Elizabeth

      God speed with that. No urgency is likely to apply under the current LGOIMA response system employed by DCC and its ‘acolytes’. After all, what is 20 working days or even three months between esteemed salaried friends and Mr Crombie who has no staff. No delay is too long.
      [Hi SG, if you’re reading this.]

  14. Nick

    Delta is diseased.

    Its corporate culture is rotten.

    Its reputational damage from inept property ‘investments’ is shameful..

    Its ability to maintain and operate a Lines network, with the dearth of experienced key staff now left on its payroll, is severely compromised.

    It is the object of major concern by the Commerce Commission who are charged with regulating these ‘natural monopolies’. Network Reliabilty is the core issue, and has been for years.

    It has operated for too long in an insulated bubble, without the checks and scrutiny that other public companies need to ensure healthy best practice is not just another buzzword.

    It is now a hugely expensive liability to the city, with dysfunctional management oversight, and little effective industry capability.

    Delta is stuffed.

    To attempt patching this pretence of useful company up by adding more directors and managers to run it is woefully misguided. No one in NZ who is competent and serious about moving their careers to the next level will apply.

    The word is out.

    Delta is now Dead duck.

    Do the right thing DCC/DCHL. Salvage what little is left of it for sale to other commercially competent network contractors. Put Aurora’s work out to tender process.
    Show some sadly missing initiative, and sort this dreadful mess.

  15. Lyndon Weggery

    Nick – DCC Councillors have a chance to fix DCHL at its forthcoming Finance and CCO Committee meeting next Monday (13 March) when they consider the Draft Statement of Intent. But don’t hold your breath. They had a secret briefing yesterday but no details have emerged to date.

  16. russandbev

    Just who was it that promised complete transparency if (clue) he got elected? Just who was it that promised that the previous cabals of interest groups would no longer be able to exert their secretive influence? Hmmm. A hard one?

    DCHL will not be “fixed” as the process of carrying on as normal has already been completed well before any secret briefing or the charade that gets carried out in public. Nick is right. Delta is stuffed and Aurora only continues to exist because it can extract line charges from the hinterland of Otago.

  17. Elizabeth

    The current city councillors have no business or governance skills to mention – their ability to work together to shape up a holding company and subsidiaries is Zero. God forbid they would put the financial welfare of Ratepayers and Residents of Dunedin and Otago ahead of their individual stipend-earning ability with regular bonus payments as council panellists and hearing commissioners.

    Bring on a central government-appointed commissioner to administer DCC (hopefully attended by a significant number of DCC management staff being made to fall on their swords) ASAP.

    The Ratepayers are to blame for this not happening already. Also to blame are the lame duck local MPS who have served Dunedin so incredibly badly for too many years.

    Read the Local Government Act to view criteria and process for appointing a commissioner and other options for administration that can be exercised by the Government to remove the ‘governance’ of a (there are stronger words) ‘failed’ local authority.

  18. Rob Hamlin

    Any government appointed commissioner would undoubtedly be drawn from the same small group of individuals who sit on all the public asset boards round here already. Just look at the appointed commissioner replacements of the Health Board. Do you really want to give any one or more of these folk absolute power – Including the power to appoint who they like to what they like and to tell all askers of awkward questions to piss off?

    As to management staff falling on their swords in such a situation – Oh certainly yes – It would just be all the wrong ones. Once the new regime was in place some managers with really deep knowledge/insight of what was going on, but who could not bring themselves to resign could even get so depressed that they might choose to end it all.

    • Elizabeth

      For no reason at all Rob, I’m feeling (insanely) more positive than that wrt potential selection of a commissioner(s) replacing DCC.

      • Hype O'Thermia

        Not insane, it’s hard to imagine anything being worse. But I can easily imagine democracy picked off by sniper action, one right at a time.

    • Hype O'Thermia

      Rob Hamlin: “Any government appointed commissioner…….. Just look at the appointed commissioner replacements of the Health Board….”
      My thoughts too. :-(((
      And look how hard it is to dislodge commissioners and emergency boards/individuals after the presenting snafus and fubars have been sorted out. Will Brownlee ever relinquish his grip on Chch or is he there till death do part him from the extra pay? There are other examples. These people never see themselves as temporary, never see the democratic system as being ready to put back in place. It’s like housework, there is always something more that can be done, perfection is never reached, so they can “rightly” claim they need more time to complete the job.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s