Professor Robert MacCulloch: Spark NZ's share price and performance

Is Lack of Diversity of its Leadership one Reason for Spark's Plummeting Share Price and Performance?

Telecom company, Spark NZ, is in trouble. It started this year with a share price of over $NZ 5. Its now around $NZ 2.80 - a decline of nearly 50%. Shareholders who've seen their wealth wiped are furious. A Main Stream Media journalist said its bosses had to field "hostile" & "misogynistic" questions at its General Meeting. Blaming gender is reprehensible. Let's instead take a look at the diversity of Spark's senior leadership. Many folks have tried linking less diversity on Boards to worse performance.

A former NZ Treasury Secretary said "Having greater diversity broadens the experiences & perspectives within organizations .. [it] enables better ideas, solutions & services. In today’s world that matters more than ever.” I've never understood this line - isn't it important to have the best people, regardless of background, gender and ethnicity? Shouldn't meritocracy be the deciding factor? But what do I know. Let's just go with the Treasury Secretary & compare the background of Spark Chairperson, Justine Smyth, with its CEO, Jolie Hodson. They're presented on LinkedIn (see below).

1. CEO Hodson is an Aucklander, having done a Bachelor of Commerce degree at the University of Auckland. Chairperson Smyth is an Aucklander, having done a Bachelor of Commerce degree at the University of Auckland.

2. CEO Hodson's BCom was in Accounting. She graduated in 1991. Board Chair Smyth's BCom was also in Accounting. She graduated in 1990. The two of them overlapped, in terms of doing the same degree, at the same University, in the same subject.

3. The CEO and Chair of Spark are almost the same age - in their early 50s - they finished their undergraduate degrees at similar times.

4. CEO Hodson worked at accounting firm, Deloitte's from 1992 to 2000. Chairperson Smyth, worked at Deloitte's from 1997 to 2000. They again appear to have overlapped.

5. CEO Hodson then worked at Lion, the brewery, in Sydney, Australia, from 2000 to 2003. Chairperson Smyth also worked at Lion - it also appears in Sydney - from 2000 to 2012. They again appear to have overlapped.

6. CEO Hodson became Spark's Chief Financial Officer around 2013. Chairperson Smyth became Spark's Chair in 2017. In 2019, Hodson was appointed the new CEO.

To work at the cutting edge of telecoms technology, could it be a tad important to have top bosses stacked with engineers? Or at least have a little bit of diversity in their backgrounds? Look at former French state-owned telecoms provider, Orange (Spark is former state-owned provider, Telecom NZ). Orange's CEO is Christel Heydemann. She's an engineer from top school, École Nationale des Ponts et Chaussées, and worked at Schneider Electric. Board Chair, Jacques Aschenbroich, is an engineer and graduate of another top French School.

But good luck to Spark - its like most other Kiwi public companies run by folks with BCom-LLB degrees - without backgrounds in the technology behind their industries. Go ask Kiwi Rail. Go ask Fletchers. Who needs an engineer in those outfits? After all, you can just put the ferry on autopilot. Maybe the NZ private sector should blame itself for NZ's low productivity. Maybe my mates - many of whom are mathematicians, engineers & computer scientists, left NZ since Corporate NZ put them down and threw them in the data & engine rooms, telling them they don't have leadership and comms skills. Funny how many of them now own their own companies or are CEOs of foreign corporations.

Sources: https://www.pressreader.com/new-zealand/the-press/20241102/282063397471749
https://www.linkedin.com/in/jolie-hodson-mnzm-8248a44a/?originalSubdomain=nz
https://www.linkedin.com/in/justine-smyth-cnzm-194a7122/details/experience/

Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.