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Salient. Victoria University Student Newspaper. Volume 37, Number 5. 3rd April 1974

The big boys are scared

The big boys are scared

Alarm was sounded at the recent conference of company directors held in Wellington. The days of directors having a powerful hold over the national economy and complete licence in decision-making are coming to an end, the conference was told. Private enterprise overseas was learning to accept "the shackles" (what an emotive term!) being imposed on it. Now it was New Zealand's turn to face public control of big business. And this the directors feared.

As private enterprise was under widespread attack it was up to the company directors to answer. Sir Clifford Plimmer, New Zealand's company director extraordinaire, speaking at the conference of the New Zealand Institute of Directors told local branches of the Institute to get "gingered up" to play a more active role in publicising and defending private enterprise.

That capitalism did have an unacceptable face was admitted by Sir Walter Scott of the Australian Institute of Directors. "Private enterprise must retrace its steps and recognise present social realities if it is going to play its proper role," he said. His suggestions as to how this was to be done are enlightening:

"We should be prepared to work with Governments or even with unions if need be." It's nice that they imply that they won't work against the government any more, but how condescending about unions!

The head of Victoria's University business administration department, Professor Fogelberg, was at the conference and had some advice (which was reprinted in Salient last week) for company directors. First directors should get a higher fee for each appointment they get to a board. Second, the function of a board of directors was no longer one of just serving the shareholders and making maximum profits. But will the second piece of advice get through to the consciences of men deeply engrained by the practice of getting the most out of the unprotected consumer? It's not likely.

As for worker representation on boards Professor Fogelberg said he did not believe that men off the floor could make a valid contribution in the board room. He favoured worker councils composed of directors, management and workers, which would let the directors still have final decision making power.

In Germany and Sweden, the conference was told, the law insisted that workers be represented on the boards of larger companies. A similar proposal was being put to all member countries of the Eastern Economic Community. This move for workers to have a say in decision-making had met with a mixed reception in Sweden, but in Germany unions were certain the move had benefited them.

Judging from the statements of alarm and calls to go on the offensive that issued from the conference we are likely to see an extensive publicity campaign get underway. Especially when the Government soon introduces its Anti-Monopoly Bill will the marvels worked by private enterprise be exposed and impressed upon the public. No doubt the campaign will have a large measure of success, too. It's not said without reason that company directors are powerful people with many opportunities to exert powerful influence in the right places.

—Brendan Smith

Mr D.H. Steen, Chairman of the Board of Directors of the New Zealand Insurance Company.

Mr D.H. Steen, Chairman of the Board of Directors of the New Zealand Insurance Company.