A businessman appointed to the board of the state-owned rail company KiwiRail was paid 44,630 dollars for less than seven months in the role, during which he was never present for a single full board meeting and was shut out of dozens of decisions because of conflicts of interest, documents released to RNZ under the Official Information Act show.
Scott O’Donnell, part of the Southland transport dynasty behind the HW Richardson Group, was appointed to the KiwiRail board by the Minister for Rail, Winston Peters, on a three-year term. He resigned in March this year, six months and 23 days into the job, to chase a new motorsport venture in Australia. The fee he collected has now reignited a long-running argument about how the government picks the people who sit on the boards of taxpayer-owned companies.
The figures, first reported by RNZ, paint a picture of a director who struggled to fully take part in the work he was paid to do. Across the six board meetings held while he was a director, O’Donnell was not present for any of them in their entirety. Of the 93 agenda items those meetings covered, he was excluded from 15 because of conflicts of interest and absent from a further 19 for other reasons, such as leaving early to travel. That adds up to 34 agenda items, more than a third of the total, that he played no part in.
The conflicts stemmed from O’Donnell’s extensive business interests. Treasury identified 10 companies he was connected to, some of which supply services to KiwiRail. Managing that web of interests required a substantial mitigation plan with seven separate measures, including vetting what information he could see and screening agenda items before meetings so he knew when to step out of the room.
The board chair, Suzanne Tindal, did not hide her frustration. In a December assessment she said the conflicts were affecting the capability and efficiency of the board. A governance specialist, Chris Eichbaum of Victoria University, put it more bluntly when describing the practical reality of a director who has to keep leaving the table, telling RNZ the person would be “in and out of the bloody meeting like a yo-yo”. The phrase has since become shorthand for the whole episode.
Peters, who made the appointment, has defended both his choice and O’Donnell’s record. He pointed out that O’Donnell participated in more than 83 percent of all agenda items once the conflict-related exclusions were set aside, and that the director followed standard conflict management procedures throughout. In other words, the minister argues the system worked as designed, with a capable appointee stepping out where required and the board carrying on without him on the handful of items where his interests clashed.
Both things can be true at once, and that is what makes the case awkward. O’Donnell is, by any measure, a serious figure in the freight and logistics world, exactly the kind of commercial experience a rail company might want around the board table. He holds an Officer of the New Zealand Order of Merit and his family business empire is one of the largest privately owned transport operations in the country. The trouble is that the very breadth of those interests is what made him a difficult fit for a board whose company he and his companies also do business with.
That tension sits at the heart of how New Zealand fills hundreds of governance roles on Crown entities and state-owned enterprises. Ministers hand out these appointments, and the pool of people with genuine sector expertise in a small country is shallow. The same names and the same firms circulate, which means conflicts of interest are common rather than rare. The question the O’Donnell case forces is how far a board can bend to accommodate a heavily conflicted director before the cost of managing the conflicts outweighs whatever expertise that person brings.
There is also a political dimension that critics have been quick to point out. O’Donnell has been linked through a family company directorship to a 20,000 dollar donation to New Zealand First, the party led by the minister who appointed him. Peters and his colleagues reject any suggestion that the donation and the appointment are connected, and there is no evidence the two were linked. But the optics of a donor-adjacent businessman being placed on a high-profile board by the relevant minister are the kind of thing that erodes public trust in the appointments process, fairly or not.
For KiwiRail, the episode is an unwelcome distraction at a time when the company is under intense scrutiny over the cost and direction of the rail network, the future of the Cook Strait ferries, and the wider question of how much the country should spend keeping trains running. A board seat left only partly filled for the better part of a year, then vacated two years early, does nothing to steady that conversation.
The broader lesson is less about one man than about a system that keeps producing these flashpoints. Until the way board members are chosen is more transparent, and until conflicts are weighed before an appointment is made rather than managed afterwards, cases like this will keep landing on ministers’ desks. Voters heading toward this year’s general election will have their own view on whether the current government has handled public appointments well, and how the parties differ on accountability and transparency is one of the things worth weighing up. You can compare where the parties stand on issues like this using our voting tool.
You can read RNZ’s full account of the saga in its in-depth report and its coverage of his resignation.
What do you think? Should heavily conflicted business figures be appointed to the boards of taxpayer-owned companies at all, or is the expertise worth the hassle of managing the conflicts? Have your say in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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