Testing time for CEO as contract runs out

Testing time for CEO as contract runs out
COMMENT
By David Harrison
AS Gilbert and Sullivan put it in The
Pirates of Penzance, the lot of a high-profile public official “is not a happy one”.
The lot of policemen in that delightful
comic opera is shared by chief executive
officers, both in business and in local
government.
Dr Michael Kennedy’s lot has largely
been a very happy one in his 15 or so
years as CEO of Mornington Peninsula
Shire. Councillors appointed him in 1999
and he has since been reappointed four
times – sometimes amid controversy.
Councillors – the “board of directors”
who employ the CEO – must decide by
mid-August whether to reappoint Dr
Kennedy once more or to throw open his
job by advertising it. Dr Kennedy could
apply for a further term and may well be
the best candidate.
At the age of 61, Dr Kennedy would
likely be happy to get one last term in the
$340,000 ($6500 a week) job, to enhance
a golden retirement.
But opponents are gathering to stop
that occurring. Many, including former
councillor and retired state MP Robin
Cooper, question Dr Kennedy’s recent
performance and that of his organisation
and say it is time to go to the market for
a new CEO, with a view to re-energising
the shire.
They point to a series of shire actions
and reactions that indicate new vigour is
needed.
Among the incidents raised are:
n Rapidly rising shire rates;
n Ever-rising shire debt;
n The hasty and ill-explained purchase
of Wannaeue Place land as a possible site
for the Rosebud pool complex;
n The shire’s accusation of bias against
the Victorian Electoral Commissioner
over introducing the shire’s multi-member ward structure;
n The abandonment of the shire’s waste
management policy after the Pioneer
quarry was rejected as a tip site.
It is being argued that the brutal world
of senior management requires the shire
to test the market for talent. The Jeff
Kennett-created local government structure is corporate, with councillors acting
as a board of directors to whom the CEO
is answerable.
Fifteen years is an extraordinarily
long stretch for a CEO, in either private
or public enterprise. The median CEO
tenure is less than five years, according
to a study by consulting firm Strategy&
(formerly Booz & Co).
“Boards may now be inclined to appoint new CEOs [who are] more likely
to bring fresh insights, different industry
experience or even prior experience as
a CEO to the role,” according to partner
Varya Davidson, commenting on the
2012 ‘Australian CEO Succession Study’.
While the study focused on private enterprise, its broad principles apply across
the corporate entity spectrum.
A 2013 Harvard Business Review article found that “when new executives are
getting up to speed, they seek information in diverse ways”, from both external
and internal sources. “This deepens their
relationships with customers [ratepayers]
and employees alike,” it said.
“But as CEOs accumulate knowledge
and become entrenched, they rely more
on their internal networks for information ... Their attachment to the status quo
makes them less responsive to vacillating
consumer [ratepayer] preferences.”
Boards – in the shire’s case, its council-
lors – “should be aware that long-tenured
CEOs may be skilled at employee relations but less adept at responding to the
marketplace; these leaders may be great
motivators but weak strategists, unifying
workers around a failing course of action,
for example.”
One of Dr Kennedy’s skills has been
to retain strong relations with a majority
of councillors – a slender but sufficient
number to maintain an efficient working strategy. This is a classic “divide and
conquer” or “divide and rule” tactic, practised by emperors and magnates since the
days of Philip of Macedon.
It is a powerful factor operating in Dr
Kennedy’s favour. He has generally had
support from six of the shire’s 11 councillors over his tenure. The six are led by
David Gibb and Anne Shaw, the shire’s
two veteran councillors.
But reliance on this support has drawbacks. In the period leading to a councillor decision on whether to reappoint or to
invite candidates for the CEO’s job, Dr
Kennedy becomes somewhat of a “lame
duck”, dependent on this group’s continuing support.
His recent sudden departure for a fortnight’s overseas holiday, now extended
by a week, was not formally discussed
with all councillors.
This may indicate that Dr Kennedy
will not seek another term as CEO or is
confident he has the numbers to be reappointed.
To advertise or reappoint? Cr Celi told
a questioner at a recent council meeting
that councillors had not yet decided what
course to take.
Until they do, councillors and the community, including opponents of reappointment – and perhaps Dr Kennedy himself
– await the their decision on the CEO.
Major milestone: Mayor Antonella Celi, Joseph Berton, Rosa Berton,
Sunrise Supported Living general manager Gina Waldon and Amelia
Berton celebrated Rosa’s 105th birthday at the Sunrise Supported
Living retirement village in Dromana.
105 reasons to smile
THE residents at Sunrise Supported Living in Dromana celebrated
the birthday of 105-year-old Rosa Berton (nee Valentina) last month.
Mornington Peninsula Shire mayor Antonella Celi visited Mrs
Berton and joined all of the village residents for morning birthday tea
to celebrate.
Letters from the Queen, Prime Minister, Premier, Governor of
Victoria and MPs Martin Dixon and Greg Hunt were read aloud to
those present.
Mrs Berton was born on 29 March 1909 in Italy. She worked at a
textile factory making materials and blankets before being married by
proxy to Gino Berton in August 1938. She arrived in Australia in January 1939 and she and her husband had four children over the years.
Ossie (deceased) was born in 1939, Joseph arrived in 1941, Amelia
was born in 1942 and Lillian completed their family in 1945.
Mrs Berton and her family lived in Mildura for 16 years and
worked as a dress maker from home where she could also look after
the couple’s children. The family eventually moved to Melbourne.
Sadly, Mr Berton passed away in 1994.
Mrs Berton has lived at the Sunrise Supported Living village for
the past ten years.
Southern Peninsula News 15 April 2014
PAGE 15

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