SOEs told 'think like a business'

SOEs told ‘think like a business’State-owned enterprises should act as if they face part-privatisation in two to five years, Stock Exchange boss Mark Weldon says, prompting suggestions he is acting as a stalking horse for the Government. [Stuff Politics]

Mallard is doing a massive beat-up in his role as de facto Leader of labour over Mark”Speedo” Weldon’s comments to SOE heads about how they should act.

Speaking to SOE heads at a meeting at the Treasury, Mr Weldon said that as part of sharpening their performance they should “form a strategy based on the prospect of a partial listing in two to five years”.

“Whether or not such an event comes to pass is immaterial. It is the right question because, were such an event to occur, you would want to ensure the maximum return to your current shareholder from the sale of any stock.”

A clear plan to increase shareholder value in a defined period, and a clear mechanism for measuring that, such as a stock exchange listing “or analog” would be a catalyst for a good strategy from the board and its crisp execution by management. That would include identifying now “the story you would want to be able to tell, were you to be inviting direct investment by New Zealanders in two to five years”.

Those comments are as they should be. There seems little point in having SOE’s and the SOE model unless they act in that way. Otherwise they as may as well just be bloated government departments. I think Trevor is using this to further raise is profile before toppling the pro tem Leader of the Opposition Phil Goff.