Connell Brian: Public Finance (State Sector Management) Bill — In Committee 
Connell Brian: Public Finance (State Sector Management) Bill — In Committee 
[Volume:622;Page:17924] 
BRIAN CONNELL (National—Rakaia) 
: 
 I will start by making a point of clarification. In a previous speech I spoke about the Southland Building Society and on reflection I regret having made some statements about it. I want the record to reflect that I have every confidence in that organisation. It is a very well-run organisation with a very fine balance sheet and I want the record to reflect that. Under this part I will talk about clause 222. I raise this issue now that we have Mr Cullen back in the chair because it is an area that needs some clarification I think. It concerns me. I am not sure that what is written here can really be the Minister’s intention. 
At the moment the heading of clause 222 states: “Existing members exempt from qualification requirements”. That is the issue that my colleague Pansy Wong raised and I think it needs to be re-canvassed. If I am reading the legislation correctly the new qualification requirements state that no one who has had a 2-year prison conviction or is an undischarged bankrupt can be a member of a board. My interpretation of clause 222 is that current board members who have that type of history can continue. If that is what the Minister intends then I seek for him to take a call and clarify that because I think it is a confidence issue. It worries me and I am sure that others who read this clause and give it close scrutiny will also be concerned about it. We are really saying in essence that some board members at the moment who have had prison convictions of 2 years or more or who are undischarged bankrupts can be board members of Crown entities. I do not for a moment believe that that is the Minister’s intention but if it is I would like that to be clarified. 
The next point I will raise is about clause 227 “Continuation of existing employment”. I have criticised this bill throughout the course of this debate for putting into legislation things that seem to be repetitious and unnecessary. I think this clause is another example of that. It states: “A person who is at the commencement of this section an employee of a statutory entity does not cease to be an employee because of the coming into force of this Act.” Surely current employment law provides those protections now and this is just more unnecessary drivel and repetition. 
The next clause I will talk to is clause 230 “Existing insurance cover”. Mr Key also raised that clause as being an issue of some importance. I am in two minds on this issue. Yes I think on the one hand that board members should be indemnified. On the other hand they have a fiduciary responsibility to conduct the business with which they are charged in an appropriate manner. If they do that according to the charter of their entity then indemnity insurance is fair. But I am reluctant to advocate that they should be indemnified if they make poor decisions or decisions that are quite clearly contrary to the charter of the entity. Why should we provide indemnity for board members who do things that are illegal for example? That relates back to the first point I raised about clause 222 concerning people with criminal convictions. Let us be clear that a criminal conviction of 2 years’ imprisonment is a very significant conviction. Someone on a board at the moment could under clause 230 potentially be indemnified for conducting an illegal act while serving as a member. When I go on to clause 230(3) I am a little confused with regard to what is intended. Subclause (2) provides that existing insurance cover for members applies but then subclause (3) provides: “However if the insurance cover expires or the member office holder or employee is reappointed or re-employed …” the measure does not apply. That also needs to be clarified.