Page 575 - Week 02 - Tuesday, 10 February 2009
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Dr Foskey went on to say:
I would like to read from the conclusion because it really sums up our findings …
5.1 …The shareholders, while not directly responsible for the day to day failures and questionable behaviour at Rhodium, failed to establish and communicate its expectations to the company.
So we form the company, we are the two shareholders, but we do not tell you what we want you to do. And so the company languishes. It was not Ms Gallagher at the time. Dr Foskey went on to say:
I think this was borne out by Mr Stanhope's comment in the hearing when he said that the shareholders had "a disinclination to hasten" and his tendency and his very direct laying of blame at the feet of the chief executive officer of Rhodium. The chief executive officer herself pointed out that there had been a disagreement, she believed, between the shareholders, who at that time were Mr Quinlan, as the Deputy Chief Minister, and Mr Stanhope. You will be aware that Mr Stanhope remains a shareholder and that Mr Quinlan's role has been taken up by Ms Gallagher as the existing Deputy Chief Minister.
The problem for Rhodium right from the start was that nobody told them what they should be doing. Part of the dynamic duo at that time was saying, “Build up the business.” The other part of that dynamic duo was saying, “Hasten slowly because we do not know what we want you to do.” This is the problem. Territory shareholders have very, very special requirements on them and under this act they have very, very special requirements in the things that they have to do.
Dr Foskey went on to say:
It is of concern to the committee that the shareholders did not demand more of the board and, through the board, the chief executive officer.
Then she said:
We were really concerned that the Territory-owned Corporations Act did not seem to have been really taken on board by the shareholders. The shareholders are the representatives of the government in the direction of a territory-owned corporation, and as a government they are meant to be acting in the best interests of the territory.
In this case, they did not. They did not make decisions, they did not sign off on business plans and they did not comply with the very special requirements that the act placed upon the territory shareholders. I think it is important as we wind-up Rhodium that we know well and truly who was responsible for the failure of Rhodium.
Page 3 of the Auditor-General’s report says:
In Rhodium’s case, it seems evident that the lack of clear strategic direction from the Shareholders created uncertainty and made it difficult for Rhodium to provide and commit to appropriate long-term strategic planning to achieve its business objectives.
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