A u rb la n d University Student Paper to make these points at all. He was In April and May of 197 2 the obviously sensitive about the fact short-lived Sunday Herald ran a that his articles conflicted with the series of four articles dealing with official fiction that ours is a classless the men who dominate New Zealand society, and was trying to salvage as commerce. The first article was much of the myth as possible. headed Elite Group has Reins on The formation of oligarchies Key Directorships, and it justified is a strong New Zealand characterist­ this title with the contention that ic - it doesn’t only happen in the “a large proportion of private assets business world. The situation could in New Zealand are under the almost be described as ‘Government control of a group which probably m M m by In-group’. This characteristic is numbers less than 300 people. more costy than sinister - not that Control of commerce in New it makes any difference. The effect Zealand seems to be exercised is more important than the motive, through large companies which have and the effect in this case is that the interlocking directorates. It is country is suffocating under the possible to construct a circular uninspired direction of a number of chain which leads from point A little in-groups. Practically every right through the economy back to institution and organisation in New point A.” W EALTH Zealand - whether it be a university The anonymous author selected administration or a students’ a company at random - New association, Federated Farmers or Zealand Breweries - and listed the the Federation of Labour - is run by connections that its directors had POWER with other companies. He then list­ a clique of some sort, and anyone with any ambitions is forced to seek ed the connections that these companies (through their directors) the approval of the appropriate in­ had with further companies, and so IN N Z group. on, until he eventually arrived back It isn’t a situation that is at NZ Breweries. In constructing likely to encourage drive and these circles of influence the author initiative. The business oligarchy, in mentioned a large number of particular, is positively doddering. important companies and touched Its members prefer to die in harness on virtually every area o f the rather than retire in their prime; and economy. And he proved his point: it is significant that the go-getters of -X the New Zealand economy is run by SOUTH BRITISH INSURANCE New Zealand business, like Brierly a tight little oligarchy. and Jeffs, have had to operate out­ side the oligarchy. Other Companies The In-Group Board Members In his discussion of this oligarchy South British & NZ Insurance J.C. Fletcher Dalgetys, GKN, NZ United Corp, South British the author pulled most of his Life, South British Guardian Trust, Alcan, It would be tempting to blame punches. Yet his articles were Guardian Trust, Lusteroid Paints, Pacific Steel, these oligarchies on the smallness of unusual for a Wilson and Horton Marac, BP (NZ), Travelodge, Tasman Pulp & the country; but it is safer to publication (and they haven’t print­ Paper, Fletcher Holdings, plus all the Fletcher distrust generalisations like this and ed anything like it since), because subsidiaries. to examine the actual oligarchies. In they contradicted the most import­ the case of the business oligarchy ant myths of New Zealand capital­ there is a strong regional bias, so 1 K.B. Myers Campbell & Ehrenfried, Fibremakers, ICI, ism. They showed that capitalism McCarthy Wines & Spirits, NZ Breweries, South will confine myself to a discussion in New Zealand isn’t an egalitarian, British Guardian Trust, South British Life. of the Auckland scene. A number of democratic affair with hundreds of key members of the Auckland thousands of small investors influ­ South British Guardian Trust, South British Life. oligarchy are associated with the encing the decisions of big business G. Lennox-King two locally-controlled insurance (not that anyone ever believed this, Guardian Trust, NZ Newspapers, Southern Cross companies, New Zealand Insurance but they always said they did). T.H. Leys Medical Soc. and South British Insurance (both Instead they showed that it is closed are old companies by New Zealand and exclusive with a ruling oligarchy South British Guardian Trust, South British Life, standards, and have always been that chooses its own members, and Sir Harcourt Caughey Fisher & Co. (AHI), Smith & Caughey. associated with the Auckland that it is impossible to gatecrash it. oligarchy). Look at the list of the If the director of a large company A big wheel in Australia. Runs Colonial Sugar members of the two boards of dies or retires, the other directors Sir John Dunlop directors, together with the other choose his replacement. Company and is on the boards of a lot of other companies. South British has an Australian share register, companies that they are directors meetings are run by the directors of. (I have been working from the which is why he is a director. (who have at their disposal the latest (1975) edition of The New proxy votes of the institutional Zealand Business Who's Who, which investors and other large J.B. Horrocks Andrew & Andrew, Champion Spark Plugs, Electric Construction, Marac, Pongrass, Southern is a sloppy book with some shareholders), and the smaller share­ appalling mistakes - like failing to holders have no say in the affairs of Cross, Andrew & Steven, Union Steam Ship, NZ Refining, South British Guardian Trust list major companies like Tasman the company they nominally Pulp & Paper and Travelodge - so I partly own. have probably duplicated some of Having proved all this, the these mistakes. Like listing dead Sunday Herald writer then went on people.) to apologise for this oligarchy as Hundreds of companies are much as he could; arguing that its connected with these two boards, members are mixed in their back­ which proves my point about the grounds, that the old-school tie existence of a buiness oligarchy. is more important than the motive There is no one on the boards of “ there is no suggestion that a both companies - because they are privileged group is using naked competitors, and that would be power to get its own way” , and that unethical. But there are a lot of such power as it does have is companies that have connections restricted and controlled by the with both boards. Fletchers, Marac, government. Most of this is just unsubstantiated assertion, but what is interesting is that he felt the need Continued on page 2 20 September 1976/Craccum/page 1 Continued from page 1 NEW ZEALAND INSURANCE Fletchers began). Of the NZI and South British directors, Steen, NZ Sugar, NZ Steel, are examples. Wilson, King, Ross and Horrocks Fletchers is the key company in D.H. Steen Abels, Autocrat, Burroughs Wellcome, Cooper belong to this group. this group - it is linked with all the (NZ), Davies (NZ), Hellabys, Hill and Stewart, Nevertheless the second group others. All that I have done here is Lusteroid Paints, NZI Finance, Penfolds, Roth­ isn’t completely subordinate to the list the immediate connections mans, Schofield Holdings, Thornton Electrical, first. Many lawyers and accountants between companies. If I listed the Thornton Engineering, Wellcome (NZ). Eire prominent because they repres­ indirect connections and took ent overseas compEmies, which puts shareholdings into account as well, A.G. Wilson Auckland Gas Co., Foodtown, Lichtenstein, them on a par with their weEilthier the effect would be bewildering. I Forest Products, Nissan, Plessey, Progressive colleagues. These professions are in will give just one example. Enterprises, Sutherland & Co., Upton & Co. the second layer of New Zealand’s Both New Zealand Insurance and upper class and have in-groups of South British are shareholders in F.R.A. Hellaby Hellabys, Hellaby Meats, Hellaby Peach, Hellaby their own, centred around long- Securitibank. Robert King is the Shrortland, NZ Steel, Peter Pan Icecream, established family firms (more NZI representative on the Hellaby Northland. especially law). Advancement in Securitibank companies. Among the these professions, as in business, other Securitibank shareholders are R.R. Trotter Challenge Corporation, Carba Industries, Electric depends very much on family Rothmans and Butland Industries Refrigeration, Fairbairn Wright, Land Projects, connections. (there is already a Rothmans MacEwans Machinery, Rockgas, Wrightcars, director on the NZI board), which Wrightson-NMA, Morrison, Goldingham & Beckett, A Classless Society ? brings into the orbit another dozen Haywrights, Wrightcars Toyota, Challenge Fin­ New ZeEtlanders kid themselves or two companies. Unilever has a ance, Challenge Securities. (These are all part of outrageously about class. large interest in Butlands, Butlands the Challenge Group). The fiction that New Zealand is has an interest in Rothmans, and a classless society is widely-believed Rothmans has diversified into all R. King Commercial Bills, Dominion Investment & and enduring, even if self-evidently sorts o f things, like liquor and Banking, Merbank, NZ Newspapers, Safe Custody absurd. New Zealand is a smug and transport. Through the board of Nominees, Securitibank, Short Term Deposits, conservative country (even if it is Securitibank you get another series Prin set Processes. the best little country in the world), of interconnections: Broadlands, and we invent little fictions about the Auckland Building Society, L.N. Ross Aluminium Co. of NZ, Amalgamated Theatres, ourselves out of a perverse sense of MLC, Avery, Boots, the Challenge Cambridge Clothing, Cargon System & Engineering, national pride. These fictions must group (again), IBM, to name only a Formica, Fram, Gasket Specialities, Goldberg serve some purpose, otherwise we few. Most of the other Securitibank Advertising, Hardie & Co, Johnstone & Co, Nathans, wouldn’t cling to them so fiercely. shareholders are insurance compan­ Forest Products, NZ Sugar, Onehunga Timber, The Sunday Herald writer showed ies: they are all represented on the Pine Milling Co, Revertex, Rex Consolidated, this with his efforts at explaining share-registers of public companies Riley Holdings, Riley Ltd, Transport Container away the facts he had uncovered.