Born in New York, educated at both Harvard and Yale, Sandy Maier was “posted to New Zealand” in 1986 as chief executive of Citibank. The bank then had small local operation but this was the time of Roger Douglas and Labour’s economic reformation and Citibank saw full banking licence on offer. Maier was, he concedes, “uninformed about New Zealand”, but it looked like an exciting professional opportunity for an ambitious young banker. The rest is history.
After four years heading Citibank it was time to leave for new assignment in Europe, the Middle East and Africa. Then he got call from Reserve Bank Governor Don Brash.
What did Don Brash want?
He asked if, despite my sometimes-vociferous opposition to statutory management would I accept the job as statutory manager of the collapsed Development Finance Corporation. He said they wanted to “do something different” and he was not happy with the way the statutory management, then about six months into the process, was going. At first I said no. Then I called him back and suggested we talk.
I decided it was both an intellectual and organisational challenge and besides, I had got to quite like New Zealand, so I took over as statutory manager of the DFC in 1990. The job lasted for two years. It was three-year assignment that we finished early.
Did the DFC exercise go well?
It went well in that we gained virtually 100 percent adherence to restructuring plan and met the schedule of terms and conditions. The collapse made quite dent in the national psyche at the time. The DFC had prominent [economic and funding] role. It had profile which politicians, particularly ministers, trumpeted loudly. It was virtually the first state entity to go down the privatisation route so its sudden failure was, in number of ways, shock to the system.
But DFC also had good committed team of people. Its executives had done good job on many fronts. There were entire sections of DFC that were problem free. It got into some very large lending, thanks in part to privatisation and the mood of the time, so we had some exposures – $100 million loans – where we never collected penny of principal or interest ever. An institution can’t stand many shocks like that against any normal capital base.
There were many individual loans and relationships that were quite productive and though they all had to be shut down, there was stable base of people and operations in the DFC on which these ‘humungus’ late ’80s problems were superimposed. And while it killed the institution, it was like cutting off gangrenous leg or arm or other major body part and the rest of the institution was sufficiently healthy to wind down over two years and come out kind of square.
The job turned out to be every bit as intellectually and professionally stimulating and interesting as I expected, particularly in the beginning.
Where did you go next?
After two years [at DFC] I needed break. The statutory manager is effectively CEO and board all rolled into one. I took six months or more off and went travelling with my kids. We ended up back in the US.
The break was great but I soon found that I wasn’t finished with work. I still loved New Zealand and had host of contacts here from my six-year sojourn and frequent returns for quarterly meetings of the creditors’ committee of the DFC advisory board.
People then talked about other turnaround work and so I started doing that. It became kind of “financial mission impossible” with range of tricky assignments. It was taxing and exciting because people would throw all sorts of challenges and demand that I be there “tomorrow”. But while it was exciting it was also bit “feast and faminish”. I didn’t really know how long each assignment would take or where I would end up.
Then, suddenly it was 1997 and, having gone back to the US to position my children for things in their life – they had got to be university age – I was in position to want to re-engage with New Zealand in more permanent way – not that I had ever been fully out of the market.
Why New Zealand?
I had profile here and store of work as result of DFC and Citibank. And I didn’t want to go to Madison Avenue and start banging on doors saying “guess who I am?” The answer of course was “nobody”. Here there were people I could talk to and things I could do.
The continual engagement in turnaround work brought offers to join boards. For while, when people asked, I said no. Just as I never imagined when I left the US that I would end up becoming corporate doctor in New Zealand, I had never envisaged being professional director either.
Directorships grew out of the role I had somehow created for myself. Eventually I assembled three or four directorships and every month I would get on plane, fly down to New Zealand and attend meetings and I was available for other stuff between those meetings.
Moving back to New Zealand was way of taking the unexpected, chaotic, feast or famine turnaround activities and converting them into something that was more stable. It was important to me because after few years the memory people have of projects like DFC, for instance, fades and the 20-somethings move up and they have never heard of most of these things. I realised that if I wanted to stay in the work world I was going to be either out of sight, out of mind in the US, or in the deal flow in New Zealand. Taking directorships helped solve my problem.
What about the transition from corporate doctor to dedicated director?
The transition was difficult but interesting. The role, respect and sheen around directorships was changing – at first subtly and then fairly dramatically. I had to get used to the change from doing things myself in quite intense, chaotic and charged situations to being more circumspect and consultative. There is quite step in distance between governance and management and that was something I had to learn and get feel for. And the professional director’s role was changing too.
I was being asked to be involved because of my skills set, personality and way of dealing with things and they didn’t want corporate doctor or turnaround specialist. It was different deal.
Most collapses centre around debt. My banking career had prepared me for that. When you get involved [with the business] equity becomes more meaningful. As director you need more balanced view. As banker, how much equity there is or isn’t is quite secondary because you are in first position and “those guys only have what’s left”. I had spent 20 years concerned with debt and repayment of debt. The DFC for instance, was just massive exercise in the repayment of debt. The equity holders were never going to be anything other than long-suffering people at the end of the chain. Approaching issues as director meant big change in focus for me.
My first directorship came as the government’s appointee to the board of the Bank of New Zealand and that happened because of my role at DFC. Then I was appointed managing director of Regal Salmon in about 1993 as part of the salvage operation. I also became managing director of Escalator Advertising. They were both turnarounds but they were just hired gun work. In both cases I was involved as MD and therefore as director.
But my first directorship that came with no turnaround work connection was Marlborough Lines. It is the electricity lines company based in Blenheim. I have been continually involved in the electricity sector since then, on the Mighty River board, the Rotorua Electricity Charitable Trust and New Plymouth Energy Advisors Board.
Why do you enjoy working in New Zealand?
I may have been born and raised in New York but big cities and life in the fast lane held no particular attraction or mysteries for me. I like the country. I’m into tramping the great outdoors. But the biggest difference is that working in the commercial community here has certain civility to it. If you work in the US
